Houlihan’s Restaurant Operator in New Jersey and New York Settles Tip-Pooling and Wage Case for $5 Million

On April 2, 2018, A.C.E. Restaurant Group (“A.C.E.”), an operator of Houlihan’s restaurants in New Jersey and New York, agreed to pay $5 million in a consent judgment to settle a case brought against it by the U.S. Department of Labor (“USDOL”) for allegedly keeping a portion of bartenders’ and servers’ tips, using tips to pay non-tipped workers, and failing to pay some employees overtime wages for hours more than 40 in a workweek. The consent judgment was approved by U.S. District Judge Joseph Rodriguez on April 10, and states that A.C.E. does not admit or deny the allegations.

The USDOL suit, filed in 2015, accused A.C.E. of violating the Fair Labor Standards Act (“FLSA”) by taking a tip credit without complying with FLSA regulations, impermissibly pooling tips and using them to pay the wages of non-tipped workers such as custodians and kitchen workers, and failing to pay overtime wages to employees who worked more than 40 hours in a workweek where they worked part of the week at one Houlihan’s location and part of the week at another Houlihan’s location.

The consent judgment covers a settlement period between February 2013 and May 2015, and requires A.C.E. to pay employees $2.5 million in unpaid minimum wages and overtime wages, and $2.5 million in liquidated damages, for a total of $5 million. The $5 million will be distributed among more than 1,400 employees according to the amount of back wages owed to each employee.

The consent judgment also requires A.C.E. to comply with FLSA mandates on minimum wage, overtime, anti-retaliation, and recordkeeping, and to provide notices to employees of their rights under the FLSA.

The Houlihan’s restaurants involved in the consent judgment are located in Brick, Bayonne, Bridgewater, Eatontown, Fairfield, Hasbrouck Heights, Holmdel, Cherry Hill, Lawrenceville, Woodbridge, New Brunswick, Paramus, Ramsey, Secaucus and Weehawken, New Jersey; and in Farmingdale and Westbury, New York.