CHICAGO — A federal judge in Illinois granted preliminary approval of a $2.7 million settlement offer in a wage and tip lawsuit against Applebee’s International Inc. and its now bankrupt franchisee, AppleIllinois LLC. Former Applebee’s employees brought their claim against the Applebee’s franchisee for failure to pay tipped workers minimum wage for the non-tipped work they completed and failure to include earned vacation pay in final pay. The settlement proposes to resolve two related lawsuits at once. The final approval conference is scheduled for October 30th.
The Workers’ Claims
In October 2006, former Applebee’s tipped employees filed their wage claim. Their claims were brought under both the Fair Labor Standards Act (FLSA) and Illinois state labor law. The employees claimed the franchisee used pooled tip money to cover cash register shortage; required tipped workers to perform non-tipped work without paying minimum wage for the work; failed to give proper tip-credit notification, as required by the FLSA; and used an excessive amount of the employees’ tip pool to cover their wages. Between 2006 and the date the settlement was submitted, the former employees narrowed their complaint to focus solely on the tipped workers performing non-tipped work without proper wages.
Another group of former employees filed a separate lawsuit against the franchisee over improper deduction of earned vacation pay when employees were terminated. This claim was brought under the state’s wage payment laws. Since the franchisee is in bankruptcy, the court allowed the plaintiffs in the non-tipped wage lawsuit to add this vacation claim. Around 18,000 individuals in the two class actions could benefit from this settlement. The franchisee will provide $2.7 million and some additional funds from their bankruptcy.
Wage Violations
As the two Applebee’s claims illustrate, employers must comply with a vast number of wage and hours laws. Often, if an employer violates one of the laws’ requirements, other violations are likely. For instance, the FLSA and state laws require employers post informational posters, in locations where employees frequent, about employee rights regarding wages, hours, and other labor issues. Not posting the information is a violation and, if employees are unaware of their rights, then an employer may improperly use tips or deduct vacation pay.
Most employers try to comply with wage and hours laws. But, if you believe your employer is not compensating you for all of the hours you have worked and owes you overtime, our top-rated team of overtime pay lawyers can help. Contact us today at (855) 754-2795 to discuss your situation or complete the Free Unpaid Overtime Case Review form and our experienced legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.