Lawsuit Against Charleston Grill by Belmond Details Slew of Alleged Wage and Hour Violations [UPDATE]

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[UPDATE - The parties involved in the lawsuit covered on this page agreed to settle the dispute through private mediation for a sum of $50,000. U.S. District Court Judge Patrick Michael Duffy approved the settlement on May 23, 2018.]

A proposed collective action has been filed against the operators of South Carolina’s Charleston Grill by Belmond in which the plaintiff alleges the up-scale Southern cuisine restaurant failed to pay proper wages. The plaintiff, who’s worked for defendants Charleston Place LLC and Charleston Place Holdings Inc. since October 2012, alleges Charleston Place by Belmond violated the Fair Labor Standards Act’s (FLSA) tip credit notice requirement by failing to inform servers of the restaurant’s intent to treat tips toward satisfying their minimum wage obligation. Further, the plaintiff says the defendants also failed to inform servers of the stipulations of the restaurant’s tip policy and the amount of the tip credit to be applied to their wages.

The case later explains individuals involved in the defendants’ mandatory tip pool include front servers, back servers, server assistants, hostesses, bartenders and food runners. According to the lawsuit, individuals working as server assistants are paid less than minimum wage and “sometimes work shifts without being paid any hourly wage.” The defendants’ allegedly below-board compensation practices are not limited to just tipped workers, the plaintiff claims:

“The defendants have a labor practice referred to as ‘staging’ for cooks and server assistants. Staging is when a cook or server assistant works for free, with the objective that the defendant will eventually hire them for a paid position. They are not paid an hourly wage, nor are they included in the tip pool.”

Speaking to the defendants’ alleged tip pooling practices, the plaintiff claims tipped servers are required to tip out food runners who not only are not “customarily and regularly” the recipients of tips, but do not interact directly with customers. A wrinkle to this, the case says, is the defendants often hire food runners from staffing agencies. These employees are paid an hourly wage of $7.25 and are not included in the tip pool, the plaintiff says, noting only food runners hired by the defendants are remitted tips.