Houlihan's Franchise Owners Sued For, God, Just So Many Different Illegal Things

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Tip theft lawsuits occur fairly frequently. It’s rare, however, to see a lawsuit with this many different accusations of impropriety—and where a few of the accusations are wholly unique.


A.C.E. Restaurant Group, a major franchiser of Houlihan’s that was apparently attempting to set the land-speed record for massive dickery to their employees, are being sued in Federal court for stealing over $40,000 from 1,430 employees at 17 restaurant locations across New Jersey and New York. Among the numerous accusations are fairly standard charges of not paying overtime and not paying staff for hours worked—both of which are pretty common (the former is almost universal within the industry).* They’re also accused, however, of deducting money from employees’ paychecks to cover meals while also still charging employees for the food directly. That’s a new one to me. Jesus, and I thought Landry’s trying to charge us $19/month to be eligible for our employee discount was some petty bullshit.**

Other accusations (of course there are other accusations) are just as unusual. Some of these are somewhat confusing, as the situation at the Houlihan’s restaurants is one I’m not familiar with—at least not with the nomenclature they’re using to describe it. They apparently required all servers to turn over a percentage of their tips to a “pool” (ordinarily, this would be called a “tip out,” which is part of what’s confusing here) that would then be split among kitchen staff and custodians, and management would take a slice for themselves. Obviously, managers taking tips from employees anywhere there’s a tipped minimum wage is some serious bullshit, and is wildly illegal, as it well should be. What’s also illegal, though, is forcing tipped employees to tip out to non-tipped employees at all, unless the restaurant is in a state where servers make the regular minimum wage. Tip outs are legal if they go to bussers or bartenders, because they, too, are tipped employees that make below minimum wage—but not when it comes to anyone making a standard legal hourly. I’ve heard of it occurring with kitchen staff before regardless, but I can honestly say I’ve never, ever heard of a tip out to custodial staff.

We can debate whether it should be legal, and a lot of people will make the same arguments about kitchen staff working hard and deserving a share of tips. And where servers are paid a standard hourly, I see no problem whatsoever with tip pools in which both front of house and back of house partake; in fact, this should be the standard in such cases. Employees guaranteed only $2.13/hour, though, should not have to give some of their tips to employees who make a standard hourly wage. Legally, they currently cannot be required to, although many restaurants do not seem to have gotten the memo on this particular point.

A.C.E. has not thus far not publicly responded to the suit. Only time will tell if they are guilty of the charges (haha, of course they are) and if the employees recoup anything like what was stolen from them (haha, of course they won’t).

* For those wondering why more employees don’t try to fight this clearly illegal practice in court: oh, you sweet summer children.

** I mean, it was petty. Fuck Landry’s for now and always. This is still worse.

Image via Houlihan’s Robinson/Facebook.

Contact the author at WilyUbertrout@gmail.com.



But we don’t need unions or collective bargaining or wage laws because each individual server can just use the vast power and leverage they hold to stop the managers from doing this sort of thing. Also I have a magic unicorn rabbit that shits skittles.