A suburban Chicago chain of pancake houses has stacked
another win in its ongoing legal fight with former servers who claimed they
weren’t paid enough for work they did in addition to waiting tables at the
A three-judge panel of the U.S. Seventh District Court of
Appeals ruled July 15 that Lincolnshire-based Walker Bros. Enterprises,
which operates a chain of seven Original Pancake House restaurants in Chicago’s
north and west suburbs, did not violate federal and state minimum wage laws by
requiring servers to perform some additional work, while still paying the
servers at the so-called “tip-credit rate.”
“It is not helpful to ask … whether cooks or busboys or
janitors do one or another task at other restaurants,” the judges wrote. “The
right question is whether the tasks are ‘related’ or ‘incidental’ to tipped
duties under the regulation.”
The opinion was authored by Seventh Circuit Judge Frank H. Easterbrook,
with justices Diane P. Wood and William J. Bauer concurring.
The opinion backed up the ruling of U.S. District Judge
Charles R. Norgle, who had similarly decided in the restaurants’ favor in
The case had first landed in Chicago federal court in October
2010, when plaintiff Robert Schaefer, a server who had waited tables at four of
the Walker Bros. restaurants in Wilmette, Glenview, Highland Park and Arlington
Heights, filed a collective action complaint, alleging the restaurants had
broken federal and state wage laws by, in effect, requiring servers to perform
two jobs, while paying them only as a server.
Under the law, this arrangement, known as the tip credit, would
allow the restaurants to pay them a wage 60 percent less than the legal
minimum, with the understanding the employer would make up the difference
should the wage plus tips not bring their compensation to the minimum standard.
According to the lawsuit, the Walker Bros. management
required servers to, among other duties, slice and chop strawberries, mushrooms
and lemons; mix jams, jellies, compote, applesauce and salsas; stock bread
bins; brew tea and coffee; replenish other beverages and condiments; fill ice
buckets; and perform some cleaning duties, including dusting and wiping down of
Court documents said the tasks would be rotated among the
servers, accounting for about 10-45 minutes of the servers’ workday, depending
on factors including “which tasks were assigned on a given day and the server’s
experience and aptitude with them.”
The plaintiffs alleged
this arrangement caused them to perform “dual jobs,” in violation of the law,
arguing that at other restaurants, such duties are performed by non-tipped
employees, including bussers and cooks.
The judges, however, sided with the restaurant owners, who
argued the additional tasks were “related” to the job of waiting tables at
their restaurants, as defined by the U.S. Department of Labor’s Field
Operations Handbook, and thus were permitted by law.
Easterbrook and the other appellate judges said the
plaintiffs’ position in this case was “untenable.”
“The restaurants’ servers engaged in making coffee, cleaning
tables, and several other activities that the regulation or handbook give as
examples of duties that may be performed by persons paid at the tip credit
rate,” the judges wrote. “Other duties performed at the restaurants, such as
ensuring that hot cocoa is ready to serve and that strawberries are spread on
the waffles, are of the same general kind.”
And, even though the cleaning tasks were not necessarily
directly related to the tipped servers’ regular duties, the judges said those
also fell within legal range.
“Given the flexibility of words such as ‘related’ and the 20
percent cap for un-tipped duties, and given how much less than 20 percent of
working time these servers spent on un-tipped duties at these restaurants, the
possibility that a few minutes a day were devoted to keeping the restaurant
tidy does not require the restaurants to pay the normal minimum wage rather
than the tip-credit rate for those minutes,” the judges wrote.
The appellate ruling also fried the plaintiffs’ contention
the restaurants had not fully informed servers of the federal tip credit wage
The judges noted the restaurants had explained essentially
how the tip credit works in their employee handbooks, and had tacked up posters
explaining the minimum wage and tip credit in their employee break rooms, as
required by law.
“It would be hard to fault an employer for providing exactly
the information the Department of Labor then required, in the Department’s own
words,” the judges wrote, saying Schaefer and other employees could have “put
two-and-two together” from the information supplied by the handbook, employee
handouts, the required posters about the law and even their paystubs.
Walker Bros. was represented in the action by attorneys with
the firm of Seyfarth Shaw LLP, of Chicago.
Schaefer and the plaintiffs were represented by the firm of
Werman Salas P.C., of Chicago, and attorney Jamie Golden Sypulski, of Chicago.