Open kitchen
A Connecticut judge has ruled against Chip’s Family Restaurant chain, ordering a hefty judgment of over $1.3 million in a class action lawsuit. The lawsuit, brought forward by servers, alleged that the popular diner-style restaurants failed to pay them the legally required minimum wage.
Judge Cesar Noble delivered the judgment on Wednesday, which includes approximately $1 million in unpaid back wages. An additional $323,000 in interest has been added due to the protracted nature of the class action lawsuit, which was initially filed in 2017.
The core of the legal dispute revolved around the claim that Chip’s Family Restaurant did not compensate its serving staff at the full minimum wage for time spent on mandatory non-serving tasks, often referred to as “side work.” These duties include essential but non-tip-generating activities such as preparing silverware, general cleaning, and restocking items like condiments.
Connecticut, like many US states, operates under a “tip credit” system, allowing restaurants to pay tipped employees a reduced minimum wage. In Connecticut, this “sub-minimum wage” for tipped workers is $6.38 per hour, significantly less than the standard minimum wage of $15 per hour.
Under Connecticut law, restaurants are obligated to compensate employees for any shortfall if their tips do not bring their earnings up to the full minimum wage. Furthermore, prior to a policy change in 2020, state law mandated that restaurants must pay the full minimum wage for all hours spent on side work.
The class action lawsuit, spearheaded by lead plaintiff Jacqueline Rodriguez and representing servers across five Chip’s Family Restaurant locations operating between 2015 and 2017, argued that the restaurant chain did not differentiate between time spent serving customers (tip-eligible) and time spent on side work.
According to court documents, attorney Richard Hayber, representing the servers, stated, “Instead, when Plaintiff performed these ‘non-service’ duties, Defendants’ took a ‘Tip Credit’ against her earnings and failed to compensate her at the required full minimum wage.” This practice, the lawsuit contended, violated state labor laws.
Chip’s Family Restaurant, once a larger chain in Connecticut, has significantly reduced its footprint since the lawsuit commenced. While locations in Fairfield and Orange continue to operate, branches in Southington and Wethersfield were closed last year. These closures followed the passing of George Chatzopoulos, the original owner of Chip’s Family Restaurant, who succumbed to brain cancer.
Attempts to reach the current owner of Chip’s Family Restaurant for comment at the Orange location on Friday were unsuccessful.
Attorney Richard Hayber, known for pursuing similar wage violation cases against Connecticut restaurants, highlighted the significance of this ruling. He stated that this case marks the first successful class action lawsuit brought by servers under the previous tip credit regulations in Connecticut. Hayber believes this victory sets a precedent for future cases concerning inadequate employee compensation under minimum wage laws within the restaurant industry.
Hayber further suggested that these legal challenges influenced recent legislative changes that appear to favor restaurant owners.
“These restaurants owe the money and rather than pay these workers what they are owed, they have gone to the legislature to try to retroactively change the rules of the game after the fact,” Hayber asserted, expressing his disapproval of such actions.
Scott Dolch, President and CEO of the CT Restaurant Association, did not immediately respond to requests for comment on Friday afternoon.
During the recent legislative session, Connecticut lawmakers considered a “One Fair Wage” bill. This proposed legislation aimed to eliminate the tip credit system altogether, aligning Connecticut with a small number of states that require employers to pay tipped workers the full minimum wage.
Although the bill advanced from the Labor and Public Employees Committee, it faced opposition, particularly from restaurant operators who defended the existing tip credit system. Ultimately, the proposal did not proceed to a vote in either legislative chamber before the session concluded last month.
