Lawsuit filed against Earnestine & Hazel’s, among others, alleging unpaid wages

Earnestine & Hazel's bar and restaurant.
Earnestine & Hazel's bar and restaurant.(Action News 5)
Published: Oct. 5, 2022 at 7:27 PM CDT
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MEMPHIS, Tenn. (WMC) - Two former employees have filed a lawsuit against Earnestine & Hazel’s, a popular “haunted” Downtown dive bar, among others under the same ownership, alleging they are owed unpaid wages and unpaid overtime by the joint businesses.

In March, a collective suit was filed against four entities on behalf of the two plaintiffs and others similarly situated working in the restaurants within the past three years:

  • Local in Memphis, LLC, which operates The Paramount restaurant and The Backlot Sandwich Shop.
  • The Vault on GE Patterson, LLC, operating as The Vault restaurant
  • Earnestine & Hazel’s, LLC, operating as Earnestine & Hazel’s bar/restaurant
  • And owner Tyson Bridge, who operates each of the above entities.

The suit claims that all four defendants would treat all four restaurants as one entity and co-mingle staff and management as a joint business.

One plaintiff worked as a server at The Paramount and The Backlot Sandwich Shop, and the other worked as a bartender/server at Earnestine & Hazel’s, The Vault, and The Backlot Sandwich Shop.

Each of these businesses had a centralized common plan, policy, and practice of compensating their employees under a tip-credit compensation plan, which involves compensating tipped employees at a sub-minimum wage hourly rate of pay and then crediting tips received by them during their shifts to meet Fair Labor Standards Act (FSLA) minimum wage requirements.

The suit claims that these companies did not meet FSLA’s requirements.

The suit also claims that in general, the tip credit system has “a harmful effect on workers that threatens the health of the economy.”

The suit cited a letter that was sent to large corporations operating restaurants, advising of the ills of using this tip credit system.

The letter reads in part:

“Frozen at $2.13 per hour, a tipped subminimum wage worker can be paid as little as $4,430 per year for full-time work.”

The suit alleges that the restaurants did not inform their employees that they were working under this system and thus were not paid the regular FLSA minimum wage rate of $7.25 per hour, but instead $2.13 per hour, the required minimum wage for tipped employees.

As a result, the suit says these two employees are entitled to the difference for those hours worked.

Furthermore, the suit says that employees were made to work in a “dual occupation,” where tipped employees were required to perform non-tip producing tasks such as cleaning bathrooms, sweeping, stocking, etc.

Labor law allows tipped employees to do some of this work while paid the subminimum tip credit wage of $2.13, but the suit says employees were required to do these tasks for more than 20% of their work time, a violation of FLSA.

The suit claims that the plaintiffs are entitled to at least the applicable FLSA minimum wage of $7.25 per work hour for all hours performing such “dual occupation” duties.

“Defendants’ wage and hour violations run much deeper; they also failed to pay Plaintiffs and class members all overtime wages guaranteed to them under the FLSA,” the suit continues.

It reads that while working at these multiple locations, the servers’ and bartenders’ weekly-total work hours would meet or exceed 40 hours, which requires paid overtime at a rate of time and a half, per FLSA guidelines.

However, the plaintiffs were only paid on a “per restaurant” basis, despite it being “very common” to work at multiple locations in the same week.

As a result, the defendants did not calculate overtime based on all hours worked nor blend each restaurant’s rates of pay.

The suit reads that the two employees were unable to state the exact amount owed to them and other class members at the time which the suit was filed in March, but that “they believe such information may become available during the course of discovery.”

“However, when an employer fails to keep complete and accurate time records, employees may establish the hours worked solely by their testimony, and the burden of proof of overcoming such testimony shifts to the employer,” the suit continues.

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