Hard Rock Cafe Must Face Tipped Workers Lawsuit

Atlanta, GAA Georgia federal judge has ruled that a class action lawsuit against Hard Rock Cafe can proceed. The restaurant chain’s servers claim they spent so much time working without tips that they weren’t paid minimum wages.

Plaintiff Terry Carpenter filed the original 26-page class action in October 2022, arguing that tipped employees must be paid minimum wage when performing non-tipped duties. Under the Fair Labor Standards Act (FLSA), when an employer uses a “tip credit,” it must ensure that the employee’s total wage (tips + hourly wage) equals or exceeds the federal minimum wage. Further, the employer cannot apply the tip credit to time spent on work that is unrelated to the tipped occupation. Carpenter claimed that Hard Rock paid their tipped employees – servers and bartenders– below the minimum wage rate by taking advantage of the tip-credit provisions.

The FLSA stipulates that tip-credit provisions allow—under certain circumstances– an employer of tipped employees to pay those employees less than the minimum wage rate by taking a “tip credit” against the employer’s minimum wage obligation from the tips received from customers.

Further, an employer must pay the minimum statutory hourly rate ($2.13 per hour under the FLSA). And an employer cannot pay below the minimum wage to tipped employees and require those tipped employees to perform non-tipped work that is unrelated to their tipped occupation.

The class action lawsuit argues that Hard Rock Café violated federal labor laws because the servers were required to spend more than 20 percent of their time and/or more than 30 consecutive minutes during their shift performing non-tip producing work, such as:

• Cleaning and setting up tables, such as rolling silverware
• Refilling condiments and setting up fountain machines
• Restocking, including ice, paper products
• Cleaning and stocking the serving line

As well, servers claimed they performed work unrelated to tipped occupation. Accrording to court documents, plaintiffs were required to:

• Sweep and mop floors
• Clean bathrooms and walls
• Take out the trash
• Cut fruit and make drink mixes
• Wash the dishes

This lawsuit is like another repeat performance for Hard Rock. For instance:

2011: Servers and bartenders in Florida alleged that they were paid less than minimum wage because Hard Rock improperly pooled tips (including sharing with “expediters” who were not customarily tipped) and thereby denied them full tip retention

2011: Two employees argued that tip pooling practices and tip credits were being improperly applied, leading to underpayment.

2010 and Prior: Wage and hour violations are recorded in public databases (e.g. for failure to pay overtime, off-the-clock work) against Hard Rock or related entities.

Hard Rock Cafe International’s motion to dismiss  this current class action was denied in September by Senior U.S. District Judge Amy Totenberg. As reported by Law360, she ruled that, although the Fifth Circuit nixed a tip credit rule in 2024, the servers’ lawsuit can still proceed because the Eleventh Circuit’s 2021 decision in Rafferty v. Denny’s Inc. and its interpretations of the dual jobs regulation remain good law. Judge Totenberg’s decision to allow the case to continue as a class action means other similarly situated Hard Rock Cafe employees may be able to join the lawsuit.