Michael Schwartz, one of Miami's most revered restaurateurs and James Beard-winning chef, has been named in a lawsuit by a former employee who claims their place of employment withheld wages, practiced illegal tip sharing, and didn't pay overtime.
In a 16-page complaint filed in United States District Court in October 2014, Former Michael's Genuine Food & Drink server Andres Duque claims that during his tenure at the Design District restaurant, he and "those similarly situated were required to share their tips with non-tipped employees such as kitchen employees and managers in an illegal tip-sharing scheme."
The complaint also alleges that Duque was "required to pay for impermissible business expenses such as uniforms and inventory" and were "paid less than the statutory minimum for tipped employees."
The complaint names Michael Schwartz, Michael's Genuine Food & Drink (MGFD) parent company Michaels Genuine Hospitality LLC, and MGFD general manager Charles Bell as defendants in the initial filing. 130 NE 40th St. LLC and the Genuine Hospitality Group LLC were added at later dates.
According to U.S. Code § 216 under the Fair Labor Standards Act (FLSA), restaurateurs must pay their employees at least Florida's current minimum wage. If the employee works for tips, the employer may apply a portion of those tips (known as a "tip credit") up to a maximum of $3.02 per hour towards its obligation to pay minimum wage. In order to utilize this tip credit, the employer must allow its tipped employees to retain all the tips they receive, except when there is a valid arrangement for "pooling of tips among employees who customarily and regularly receive tips."
If servers at Michael's Genuine were required to share their tips with non-tipped employees such as kitchen staff and managers or they were required to pay for uniforms, the restaurant would be in violation of the FLSA and must pay the plaintiff, as well as other servers, the tip credit claimed for each regular and overtime hour worked as repayment for the tip credit improperly credited to their wages, as well as repay the employees for all tips taken in the illegal tip-sharing scheme.
The complaint is also seeking collective action status, which could potentially see dozens of current and former employees of the restaurant joining the lawsuit. The plaintiff list is growing, with Roberto Abrue added on December 23, 2014; Richard J. Singleton added on December 30, 2014; and Christopher Caballero added on January 21, 2015.
A District Court decides whether the case can achieve collective action status, based on whether there is a minimal showing of servers also employed at Michael's Genuine who performed the same or similar job as the plaintiffs:
All persons who worked for Defendants as servers during the three (3) years preceding this lawsuit and who, as a result of Defendants’ policy of requiring servers to share their tips with employees who do not customarily and regularly receive tips and/or to pay for impermissible business expenses and/or were paid less than the statutory minimum overtime wage for tipped employees, earned less than the applicable minimum regular and/or overtime wage for one or more weeks during the Relevant Time Period.
A collective action lawsuit is different than a class action lawsuit. According to Lawyers.com, in a class action lawsuit, employees are presumed to be part of the class and any employee who doesn't want to participate in the lawsuit must opt out. In a collective action, the opposite is true — employees must opt in with a signed document to be part of the lawsuit. Class action lawsuits cannot be used in wage and hour claims brought under the FLSA, but employees may bring an “opt-in” or “collective action” under FLSA Section 216(b).
Duque and the other plaintiffs are seeking payment of all regular hours worked at the full applicable minimum wage; repayment of the tips taken and shared in the "illegal tip-sharing scheme", liquidated damages equal to the payment of all regular hours due them, and attorneys fees.
Though there is a request for a jury trial, a report of mediation was filed on August 11, 2015 with the U.S. District Court that states a mediation conference was held on August 4, 2015, with all parties in attendance. The matter was adjourned for further discussions.
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Michael Schwartz's attorney, Russell Marc Landy, would not comment on the case, saying, "It's the restaurant's policy not to comment on pending litigation." A spokesperson for the Genuine Hospitality Group issued the same statement.
The plaintiff's attorney, Robert W. Brock, could not be reached for comment. We will update this story with any further information.