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

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.