SMITH & WOLLENSKY DECISION- 2nd CIRCUIT

On September 26, 2011, the Second Circuit Court of Appeals issued a landmark decision in a unpaid wages lawsuit against restaurants owned by Smith & Wollensky, a well-known brand of steakhouses. The Court ruled that Plaintiffs are able to bring a simultaneous Collective Action under the Fair Labor Standards Act (FLSA) and class action pursuant to the New York Labor Law (NYLL) in the same case. The Court ruled that under Federal Law and New York law, the violations are similar and facts overlap. Also, just because someone does not affirmatively opt-in to the FLSA case, does not mean that same person cannot share in the opt-out portion of the case. The Court noted that many employees do not opt-in because they are afraid of retaliation. The facts of the case involved non-tip eligible employees, such as managers, silver polishers and coffee preparers being included in the tip-pool. These violations are common in restaurants in New York City.

In New York, waiters cannot be forced to share tips with any member of management, or anyone who is not a busboy or similar employee. This includes kitchen workers, dishwashers and expediters. Unfortunately, many restaurants include these non-tip eligible employees in tip pools, in order to avoid paying them less wages. The unpaid wage lawyers of Fitapelli & Schaffer can assist employees who believe they have been subjected to similar illegal pay practices.