A restaurant management company operating iconic Giordano's franchises is the focus of a new class action lawsuit accusing them of shorting servers' wages by allegedly claiming improper tip credits for them by requiring them to perform duties where tips would not be collected.
Dae Jae Tolefree, on behalf of herself and others, has filed a new class action lawsuit against VPC Pizza Management, which does business as Giordano's, on April 5 in Cook County Circuit Court. Tolefree is accusing Giordano's of violating Illinois Minimum Wage Law (IMWL) for allegedly underpaying servers while requiring them to perform duties that were not eligible for tips. The complaint alleges Giordano's also claimed tip credits for those servers it was supposedly not eligible for.
Tolefree is asserting in her complaint that Giordano's regularly required its servers to perform a substantial amount of dual and and side work duties for more than 20% of their shift, while still compensating them at the tipped rate rather than the full hourly wage minimum. The suit alleges this is in violation of IMWL.
Between 2019 and 2022, the minimum hourly wage in Illinois was $8.25, increasing incrementally to $12.00 in 2022. IMWL requires employers to pay all its employees at minimum hourly wage rate. The exception to this applies to workers who receive tips as part of their compensation. Employers are allowed to pay those workers at a rate of up to 40% below the minimum hourly rate, as long as tips make up the difference for their total compensation to at least the minimum hourly wage rate.
Illinois law also allows those employers to claim a tip credit. To claim tip credit, the complaint asserts an employer must follow the 80/20 rule ensuring workers are engaged in tip eligible duties for at least 80% of their shift. Non-tip duties which exceed 20% of the employee's workweek are not eligible for tip credit and cannot be calculated by an employer as part of the tolerance.
Founded in 1974 in Chicago by brothers Efren and Joseph Boglio, Giordano's became an iconic standard for Chicago style pizza, specializing in stuffed pizza. Shortly after filing bankruptcy, the Giordano's franchise sold in 2011 to VPC Pizza Management for $52M. Giordano's currently operates in 65 locations across the U.S. and the Chicagoland area.
The exact amount of claimants in this class action is unknown. But the lawsuit estimates the potential plaintiffs' class could include hundreds of impacted current and former tipped employees who worked at corporate Giordano's locations between Dec. 3, 2019 and Dec. 12, 2022.
Plaintiff is demanding a trial by jury and is seeking compensatory damages for unpaid wages, liquidated damages, legal fees and court costs.
Plaintiff is represented by attorneys Max P. Barack and Haskell Garfinkle of The Civitas firm, of Chicago.