HOULIHAN’S RESTAURANT IN NEW JERSEY AND NEW YORK ACCUSED OF TIP VIOLATIONS UNDER THE FAIR LABOR STANDARDS ACT

On September 28, 2015, Secretary of the United States Department of Labor, Thomas Perez, filed a lawsuit against A.C.E. Management Group, operator of 17 Houlihan’s restaurants located in New Jersey and New York, and it’s President/Part-Owner, Arnold Runestad, for violations of the minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act (“FLSA”).

Last month, the Department of Labor issued a press release stating that its investigation revealed that the defendants unlawfully used employee tip pools by retaining a portion of the tips and also used tip pools to compensate non-tipped workers, such as custodians or kitchen workers, failed to pay overtime pay to employees for hours worked in excess of 40 hours per workweek, required employees to work “off-the-clock” and deducted money from employees’ paychecks for their meals during breaks but also charged them for those same meals.  Regional Solicitor of Labor, Jeffrey Rogoff, stated, “The severity of these violations and the number of affected workers is such that that restitution, we believe, could amount to millions of dollars.”  The Department of Labor seeks reimbursement on behalf of 1,430 current and former Houlihan’s employees.

This Firm will continue to monitor the developments in this case.

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