Applebee’s tip credit case to go to trial
A lawsuit challenging Applebee’s tip credit policies for servers and bartenders will go to trial later this year after the U.S. Supreme Court on Tuesday declined to hear an attempt to stop the case.
The Supreme Court’s move leaves intact a lower court’s ruling that will allow the Applebee’s tip-credit case to proceed to trial in September.
The wage-and-hour lawsuit was originally filed in 2006, and alleged that Applebee’s was underpaying servers and bartenders by applying a tip credit even for hours when employees did not perform tip-producing work, such as cleaning, taking inventory and setting tables.
In a statement, Applebee’s said, “We respect the Supreme Court’s decision today not to intervene at this time in this case and many others. While we do not comment on pending litigation, we will further defend our case in the lower court.”
The plaintiffs argued that employees should be paid the full minimum wage for time spent on non-tip-producing duties. They cited a Department of Labor interpretation of the U.S. Fair Labor Standards Act, which contends that employees who spend more than 20 percent of their time on non-tipped work are not entitled to a tip credit.
A federal court in Missouri had allowed the case to proceed to trial, but Applebee’s attempted to have the lower court’s decision overturned, arguing that non-tip-producing duties are a necessary part of a service job, and that the tip credit is allowed in certain states as long as combined pay reaches the federal minimum wage.
Labor attorney Anthony Zaller of Van Vleck Turner & Zaller in Los Angeles, who is unaffiliated with the Applebee’s case, said the Supreme Court’s decision not to hear the case does not necessarily reflect the merits of the argument either way.
“It could have been they were too busy,” he said.
The outcome of the Applebee’s case will also not impact employers in states were a tip credit is not allowed, including California.
Based in Kansas City, Mo., Applebee’s operates or franchises more than 2,000 restaurants globally. The casual-dining chain is a subsidiary of Glendale, Calif.-based DineEquity Inc.