An advocacy group lacks standing to sue one of the largest restaurant chain companies in the United States for paying tipped workers less than minimum wage, a federal judge ruled Tuesday.
Courthouse News reports that One Fair Wage, a nonprofit focused on eliminating sub-minimum wages, sued Darden Restaurants, which operates national chains like the Olive Garden and Longhorn Steakhouse, this past April in the US. District Court for the Northern District of California. The group claims the company’s pay policies force workers to rely on tips for the bulk of their wages. This puts servers at the mercy of potentially biased, racist or sexist customers, according to the complaint.
It sought an injunction to stop Darden from paying sub-minimum wages to tipped workers in 43 states that allow the practice. According to the lawsuit, Darden pays waiters the lowest possible wage in the 43 states that allow tipped workers to make less than minimum wage. About 20% of Darden’s tipped workers make $2.13 an hour, and a majority of its tipped staff make less than the federal minimum wage of $7.25 an hour, according to the complaint. The federal minimum wage was last raised in 2009 from the prior rate of $6.55.
Seven states – including California, Oregon, Washington state, Nevada, Minnesota, Montana and Alaska – require tipped workers be paid full minimum wage. In California, employers with 26 or more employees must pay workers at least $14 an hour. That rate will increase on Jan. 1, 2022, to $15 per hour.
But U.S. District Judge Edward Chen found One Fair Wage is not entitled to sue someone else’s employer for workplace discrimination under Title VII of the Civil Rights Act of 1964.
“Simply put, OFW cites no case law establishing that a non-employee – here, an advocacy organization – has standing to challenge an employment practice, particularly where the alleged injury it contends renders it ‘aggrieved’ is either purely ideological or entirely derivative of the injury directly suffered by actual employees – Chen wrote in a 29-page ruling.
Chen wrote that prior rulings, including a 2020 decision in a District of Maryland case, Know Your IX v. DeVos, challenging U.S. Department of Education sexual harassment and assault policies, suggest “there has not been a sufficient showing of direct impairment of OFW’s ability to operate and function to confer standing.”
But the judge did not dismiss the case on that basis. Rather, he found One Fair Wage’s lack of standing to sue under Title VII of the Civil Rights Act means the court didn’t need to address the group’s other theory of liability.
Chen wrote that One Fair Wage’s position on standing would mean any outside group affected by an employer’s labor practices could file suit and seek relief that would affect the rights and compensation of a class of potentially thousands of employees.
“OFW’s broad standing approach would ignore the protection afforded to the class via Rule 23’s requirements of notice, objection rights, and judicial scrutiny of any class settlement,” Chen wrote. “This is particularly pertinent here, as there may well be employees who object to the changes sought by OFW to eliminate unmediated tipping.”
Chen dismissed the case with prejudice, finding any attempt to amend the lawsuit would be futile.