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Gagliastre v. Captain George’s of South Carolina, et al.

Delivery Drivers

This case asserted unpaid wage claims on behalf of 373 servers, bussers, and buffet runners employed at any of the four Captain George’s Seafood Buffet locations who “opted in” to the lawsuit (they filled out a short form that we filed with the court).

The four Captain George’s locations are in Myrtle Beach, South Carolina, Kill Devil Hills, North Carolina, Williamsburg, Virginia, and Virginia Beach, Virginia.

 

Update 09-19-2021

On September 19, 2019, Judge Jackson again rejected the defendants’ argument. In his Order granting the plaintiff’s Motion to Enforce and denying the defendants’ Motion to Enforce, the Judge explained that the FLSA claims, and only the FLSA claims, had been released through the Gagliastre settlement.

The defendants have appealed Judge Jackson’s decision. However, the appeal has been stayed pending the outcome of the plaintiff’s South Carolina lawsuit, Tarry v. Captain George’s.

Read Full Case Details

Case Details

 

This lawsuit was filed against a restaurant that we alleged violated almost every wage and hour rule in the book.

The Claims

Participating in an Illegal Tip Pool

First, the plaintiffs alleged the company required servers to participate in an illegal tip pool. Each night, the servers were required to pay a portion of their tips to the restaurant that was calculated based on a percentage of their sales for the shift.

The plaintiffs allege that this tip pool was illegal because (1) the defendants kept some of the tip money for themselves, (2) the defendants used some of the tip money to pay for its own business obligations, such as paying hourly wages to other employees, and (3) the defendants distributed some of the tip money to management employees who were not allowed to participate in the tip pool.

Paid Below Tipped Minimum Wage Rate

Second, the plaintiffs alleged the company paid the servers, buffet runners, and bussers less than the FLSA’s tipped minimum wage rate. Instead of paying $2.13 per hour, Captain George’s paid thousands of workers over the years at $2.125 per hour, siphoning off a half penny for each hour worked.

Employees Were Required to Pay for Work Uniforms

Third, the plaintiffs alleged the company required servers, bussers, and buffet runners to pay for the cost of work uniforms, thereby dropping the workers’ wages even further below the minimum.

Employees Required to Contribute Wages to Non-employees

Fourth, the plaintiffs alleged the company required servers to pay a set amount per shift ($3 to $7 per shift) which would be used to pay non-employees who the company brought in to roll silverware. Because the company, and not the workers, needed rolled silverware, this practice also amounts to a diversion of wages and/or tip money.

Employees Were Paid Incorrect Overtime Rates

Fifth, the plaintiffs allege the company paid the tipped employees overtime at the wrong rate. When an employer claims a “tip credit” from workers’ wages, the rules for determining the right overtime rate are slightly altered. Specifically, the company must multiply full minimum wage ($7.25) by 1.5, and then claim whatever tip credit they are trying to claim. Instead, the plaintiffs allege that the company simply multiplied the workers’ tipped wage rate by 1.5, resulting in the wrong overtime rate.

Employers Failed to Notify Workers of Terms of Employment

And sixth, the plaintiffs allege the company failed to properly claim a tip credit because they did not meet all of the requirements for notifying the workers of the terms of their employment.

The original lawsuit alleged that these policies and practices violated both the FLSA and also the South Carolina Payment of Wages Act.

What Happened

As many of you are aware, the Gagliastre lawsuit was originally filed as a “hybrid class/collective action.” That means the original complaint asserted federal law claims arising from the Fair Labor Standards Act and South Carolina state law claims arising from the South Carolina Payment of Wages Act.

In the fall of 2018, the defendants asked the District Court to decline jurisdiction over the South Carolina claims and retain jurisdiction over only the FLSA claims. The Court granted the defendants’ request. As a result, the plaintiffs re-filed their South Carolina claims in South Carolina state court in a case called Tarry v. Captain George’s. Only the FLSA claims continued in the Gagliastre case.

When the parties reached a settlement of the Gagliastre matter in December 2018, the parties’ agreement explained that the settlement resolved only the FLSA claims asserted and did NOT resolve the South Carolina Payment of Wages Act claims.

The defendants’ new counsel, who was retained by the defendants only after the settlement was reached in Gagliastre, tried to convince the District Court that the settlement did or should be considered to have also resolved the South Carolina claims.

In his Order on May 22, 2019, U.S. District Judge Raymond Jackson rejected the defendants’ arguments and made clear that only the FLSA claims had been released by the parties’ $2.44 million settlement. Despite this instruction from the Court, the defendants persisted in trying to argue that the Gagliastre case actually released the South Carolina claims.

The defendants filed a Motion to Enforce the Settlement, claiming that the plaintiffs could not proceed with their South Carolina claims in a South Carolina court because, according to defendants, they released those claims through the Gagliastre settlement. We filed a Motion to Enforce the Settlement on behalf of the plaintiffs, arguing that defendants were precluded from taking the position they were now taking. We also argued that the defendants’ counsel had failed to meet his duty of candor to the Court.

The Settlement

The parties agreed to resolve the FLSA claims of the 373 servers, bussers, and buffet runners who had joined the lawsuit for $2.44 million.

Biller & Kimble and their co-counsel were award 25% of the settlement fund for a total attorneys’ fee of $611,201.14. In addition, the Court ordered that our firm be reimbursed for the litigation expenses of $67,266.59 we had advanced in the case. Finally, the Court approved of $10,000 incentive awards to be paid out to named plaintiffs Chris Gagliastre, Zachary Tarry, and Olga Zayneeva.

The remaining settlement fund was distributed to the 373 opt in plaintiffs based on the numbers of hours they worked during the relevant time period. On average, each class member received an award of $4,655.06.