Owners of Stoneacre restaurants are being sued by the U.S. Labor Department. Here's why.
NEWPORT — The U.S. Department of Labor is suing the Stoneacre family of restaurants and its owners for allegedly taking employee tips and misclassifying positions to exempt some workers from overtime pay.
U.S. Labor Secretary Marty Walsh filed the complaint with Rhode Island’s federal District Court on Aug. 4, alleging four counts of Fair Labor Standards Act violations against Stoneacre Hospitality co-owners Christopher Bender and David Crowell, as well as the limited liability companies associated with Stoneacre Brasserie, Stoneacre Garden and the now-closed Stoneacre Tapas.
When contacted by The Daily News, the law firm representing Stoneacre Hospitality and its owners declined to comment, citing the ongoing litigation.
Why is Stoneacre being sued?
In the complaint, Walsh accuses Bender and Crowell of participating in the employee tip pool and allowing other managers and supervisors to do the same, beginning in March 2018. This is a violation of the Fair Labor Standards Act of 1938, which prohibits those in positions that don’t “customarily and regularly” receive tips from participating in a tip pool.
Walsh’s complaint also alleges Bender and Crowell would be liable for minimum wage compensation if they are found in violation of the act’s tipping provisions. Employers who allow employees to receive tips as a part of their overall compensation are permitted to pay a wage less than the federal minimum wage, so long as the tips received by the employee are equal to or greater than what they would have received at minimum wage.
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However, if Bender and Crowell had improperly taken tip credits from the tip pool, the company would not be entitled to use employee tips to make up the difference required for compliance with the federal minimum wage.
Additionally, the complaint cites eight separate violation categories of the company failing to pay a proper rate for employees who worked overtime: one related to the alleged tipping violation, one accusing owners of paying normal rates for back-of-the-house employees who worked overtime and six related to the misclassification of employees as being exempt from overtime pay.
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Stoneacre Hospitality misclassified four line cooks, two sous chefs, two floor managers, one chef of day cuisine, one dishwasher and one assistant director of operations as exempt from overtime pay, according to the complaint.
Stoneacre complaint by Will Richmond on Scribd
The final count Walsh levies against Stoneacre Hospitality is a failure to maintain and keep accurate records of employees’ hours worked. Since Stoneacre Hospitality used its employees across all three of its restaurants and paid them through three separate entities, the complaint alleges the company failed to combine the hours employees worked to calculate overtime.
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Walsh is requesting Stoneacre Hospitality pay for the withheld tips and the back wages associated with violating minimum wage law, as well as damages, for the period between April 13, 2016 and Jan. 4, 2021.
The labor secretary also seeks tips, back wages and damages for former or current employees identified during the litigation who were affected by possible violations occurring after Jan. 4, 2021.
A court date has not been set, but the plaintiff has requested the case be reviewed in a trial by jury.
This article originally appeared on Newport Daily News: Stoneacre owners in Newport sued for taking tips, not paying overtime
