Darden accused of sex, race bias for relying on tips to meet minimum wage obligations
4/15/21 REUTERS LEGAL 21:35:53
Copyright (c) 2021 Thomson Reuters
Daniel Wiessner
REUTERS LEGAL
April 15, 2021
The sign outside the Olive Garden restaurant is seen in Westminster, Colorado March 19, 2015. Darden Restaurants Inc, the parent of Olive Garden will report earnings on March 20. REUTERS/Rick Wilking
(Reuters) - Darden Restaurants Inc, the world's largest full-service restaurant operator, was hit with a lawsuit on Thursday claiming its policy of paying servers the lowest hourly wages allowed by law has a disparate impact on women and non-white workers.
One Fair Wage (OFW), a nonprofit that advocates for the elimination of lower minimum wages for tipped workers, filed a complaint in Oakland federal court accusing Darden of violating federal anti-discrimination law by doing "nothing to mitigate customers' tip choices."
OFW, represented by Gerstein Harrow and the National Legal Advocacy Network, said studies have shown that tipped workers are more likely than others to face sexual harassment from customers and managers, and workers of color are tipped less than their white coworkers.
Despite that, Darden allows its customers to essentially set the wage levels for tens of thousands of employees who are paid as little as $2.13 an hour, which is the federal tipped minimum wage, by the company, OFW said.
"When a company adopts wage policies or practices like these that result in disparate, negative impacts on the basis of sex and race, and there is no business necessity for doing so, it engages in illegal employment discrimination under federal law," the group's lawyers wrote.
Florida-based Darden, which operates eight restaurant chains including The Olive Garden, LongHorn Steakhouse, and the Capital Grille, did not immediately respond to a request for comment.
The lower minimum wage owed to tipped workers has been the focus of intense scrutiny in recent years. Groups including OFW and the union-backed Restaurant Opportunities Center have successfully pushed several states to eliminate the tipped minimum.
But the federal Fair Labor Standards Act only requires employers to pay tipped workers $2.13 an hour and to make up the difference when their wages including tips are less than $7.25 an hour, which is the normal minimum wage. Some states have a higher tipped minimum wage.
In Thursday's complaint, OFW said that regardless of where tipped workers are located, they are consistently exposed to pervasive sexual harassment and race discrimination.
The group said that Darden has a policy requiring that tipped workers be paid the lowest hourly wage allowed by law, and does not allow managers to exercise discretion over wages. That, in turn, means managers have an incentive to ignore and even encourage sexual harassment and race-based disparities in tipping, OFW said.
Darden could take steps to mitigate those effects, such as pooling tips or charging customers a standard service fee, but does not, OFW said.
The group accused Darden of sex and race discrimination in violation of Title VII of the Civil Rights Act of 1964.
OFW said it has standing to sue Darden because it has had to divert resources to assist Darden employees who allege sexual harassment or race bias as a result of the company's pay policies.
The case is One Fair Wage Inc v. Darden Restaurants Inc, U.S. District Court for the Northern District of California, No. 4:21-cv-2695.
For One Fair Wage: Jason Harrow of Gerstein Harrow
For Darden: Not available
End of Document© 2024 Thomson Reuters. No claim to original U.S. Government Works.