Restaurant firm sued over wage allegations
The president and parent company for 17 Houlihan's restaurants throughout New Jersey and New York have been sued for skimming tips, failing to pay overtime, allowing bartenders to work off the clock, and for overcharging employees for meals eaten in the restaurant, according to a federal lawsuit filed this week.
The president and parent company for 17 Houlihan's restaurants throughout New Jersey and New York have been sued for skimming tips, failing to pay overtime, allowing bartenders to work off the clock, and for overcharging employees for meals eaten in the restaurant, according to a federal lawsuit filed this week.
Attorneys representing the A.C.E. Restaurant Group in New York, and its president Arnold Runestad, said the lawsuit is the result of false allegations made by a few disgruntled employees.
A.C.E., the company that owns and operates the 17 restaurants - including one in Cherry Hill - allegedly kept $40,000 in tips that should have been divided among bartenders and wait staff, according to lawsuit filed by the U.S. Department of Labor.
"The severity of these violations and the number of affected workers is such that restitution, we believe, could amount to millions of dollars," Regional Solicitor of Labor Jeffrey Rogoff said in a press release issued after the suit was filed.
"Restaurant workers are among those in our economy who are most vulnerable to wage violations, and we are committed to pursuing remedies vigorously on their behalf whenever necessary," Rogoff said.
New York Attorney Doug Weiner represents A.C.E., the restaurants that are individually managed, and Runestad. He said state authorities found no violations among the restaurants since 2013, and compared the lawsuit to a grenade consisting of "scurrilous allegations."
The Labor Department alleges the company methodically denied employees compensation.
"The defendants' practices deprived many of their employees of money rightfully earned - money that they need to afford basics," Wage and Hour Division Regional Administrator Mark Watson said in the press release. "Reducing labor costs by shorting workers also places law-abiding restaurants at a competitive disadvantage, and violates the principle of a fair and level playing field."
The Labor Department said there would be no further comment beyond the press release. Restaurant workers in Cherry Hill and North Jersey referred questions to the company's attorneys.
Weiner and attorney Robert Lipman said the largest part of the suit concerns whether "runners," those who help prepare the meals and sometimes deliver food to customers, are allowed to be compensated through the tip pool.
"One hundred percent of the tip money went to service workers," Lipman said. "They spoke to a couple of disgruntled workers who are behind this."
The attorneys noted one employee had been fired for appropriate reasons.
According to the suit, in 2014 tip money was used to pay employees who started before the restaurant opened and "performed custodial work for several hours," which included vacuuming, polishing furniture, and cleaning restrooms.
The suit also alleges workers were employed at different restaurants within the same chain, sometimes working in excess of 40 hours, but were not properly compensated with overtime pay.
The attorneys said if that happened, the company would correct those errors. They noted the manager of one restaurant likely would not be aware if the employee had been working at another Houlihan's because the restaurants are all independently managed.
The attorneys said they were looking into allegations of employees overcharged for food they ate. Lipman said employees receive 50 percent off food, and "We think the Department of Labor got their facts wrong."
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