Tipped IHOP servers argued for full minimum wage.

Byline: Michigan Lawyers Weekly Staff

Plaintiffs worked as tipped servers at 14 IHOP restaurants throughout Michigan, commonly owned by the defendant franchisee, Trinity Restaurant Group LLC.

Under the federal Fair Labor Standards Act, employers may claim a statutory tip credit, which permits them to pay tipped employees a reduced minimum wage while allowing those employees to retain all the tips they receive from customers. However, when tipped employees perform non-tip producing work for more than 20% of their time (e.g., deep cleaning, rolling silverware, and preparing food), the regulations required the employer to pay those employees the full minimum wage. Additionally, tip-pooling arrangements are appropriate among employees who customarily and regularly receive tips from customers.

Mercedes Whitfield, on behalf of herself and all similarly situated employees, brought a collective action under the Fair Labor Standards Act against defendant Trinity Restaurant Group, an International House of Pancakes restaurant franchisee that operated 14 IHOPs in Michigan. Whitfield alleged that Trinity violated the FLSA by failing to pay her and other servers the full minimum wage due to excessive non-tip producing work and tip-pooling arrangements that improperly included food expeditors.

Trinity argued that plaintiffs did not work excessive hours performing non-tip producing work, that any tip-outs to the expos were voluntary or otherwise proper, and that their restaurant pay practices otherwise complied with state and federal labor laws.

The U.S. District Court for the Eastern District of Michigan granted conditional certification and authorized notice to Trinity's 1,705 servers. After substantial discovery, the parties were able to reach a global settlement through a mediation session with...