Class Action Lawsuit Claiming Wolfgang’s Steakhouse Violated State, U.S. Labor Laws Certified

The U.S. District Court for the Second District of New York has certified a class action lawsuit brought by tipped employees of Wolfgang’s Steakhouse in New York City. The lawsuit claims Wolfgang’s Steakhouse Tribeca and Wolfgang’s Steakhouse Park Avenue violated New York State and federal labor laws by, among other things, failing to pay servers and other tipped employees overtime.

The lawsuit, which was filed in February 2009, claimed that servers working a lunch shift at Wolfgang’s Tribeca were typically paid for three and-a-half hours of work, and servers working a dinner shift were paid for five hours of work, irrespective of the number of hours an individual actually worked. Wolfgang’s Park used the same system with slightly different shift length projections. In reality however, the lawsuit claimed servers worked in excess of those hours, and thus their pay fell below the legal hourly minimum wage.

Plaintiffs also alleged that they often worked beyond 40 hours per week, but were not paid overtime. They also claimed they were denied an additional hours pay when they worked more than ten hours per day, as is required under New York’s “Spread of Hours” law.

The Wolfgang’s Steakhouse lawsuit further alleged that employees were not reimbursed for uniforms they had to purchase, as is required by New York law. Finally, the Plaintiffs claim the restaurant pooled tips and allowed part-owners and head waiters with management authority to participate in the tip pool, also in violation of New York law.

The overtime and minimum wage claims were brought under both the federal Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The spread of hours, employee attire, and unlawful deductions claims were brought under NYLL. Each FLSA and NYLL claim was brought on behalf of “all non exempt persons employed by Defendants at any New York location in any tipped position,” including bartenders, servers, and barbacks, except the unlawful deduction claim, which was brought on behalf of servers only.

The FLSA collective action was conditionally certified last February, and Plaintiffs were permitted to send notice to class members.

The Plaintiffs sought to have the Second District of New York hear both the state and federal claims under a principle known as supplemental jurisdiction. Supplemental jurisdiction allows federal courts to hear state law claims that are so related to a federal claim before the court that they form part of the same case or controversy. However, a court may decline to exercise supplemental jurisdiction over a claim if, among other things, “the claim raises a novel or complex issue of State law,” or “the claim substantially predominates over the claim or claims over which the district court has original jurisdiction.”

In certifying the Wolfgang’s Steakhouse federal class action, the Second District of New York denied a motion by the Defendants that it decline to exercise supplemental jurisdiction over NYLL claims on the grounds that the state claims predominate the FLSA because they would involve substantially more plaintiffs. In its decision, the Second District found that predominance for the purposes of supplemental jurisdiction “refers to the type of claim, not the number of claimant.”

The Court also denied the Defendants’ contention that supplemental jurisdiction should be denied because the tip distribution claim is a novel and complex issue of state law. The Second District pointed out that several courts have addressed the circumstances under which such persons can and cannot participate in a tip pool, and said the Defendants had not pointed to any reason why the Second Circuit could not do so as well.


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