Steak Nirvana? Tony’s Settles Wage Theft Lawsuit for $1.5 Million

Lexington, Ky. – Tony’s Steak and Seafood, a downtown Lexington restaurant, has agreed to pay $1.5 million to settle a wage theft lawsuit filed by servers across three states. The lawsuit alleged that the restaurant violated the Fair Labor Standards Act by enforcing a tip pool that distributed portions of tips to salaried members of management. The settlement will cover employees from Tony’s locations in Indiana, Kentucky, and Ohio, as stated in federal court documents and information provided by the attorney representing the servers.

Initially, three separate class-action lawsuits were filed against Tony’s Restaurant in the three states, but they were consolidated into a single federal lawsuit. The $1.5 million settlement will serve as a “common fund” to be split among the individuals involved in the suit, covering settlement payments, attorneys’ costs, settlement administration expenses, and class representatives’ service awards, according to court documents.

Dave Garrison of Barrett Johnston Martin & Garrison, the lead attorney in the case, expressed satisfaction with the settlement, emphasizing the importance of holding employers accountable for violating laws that protect employees who earn their living from customer tips. He told the Herald-Leader, “For years, Kentucky has maintained strong laws protecting those who earn their living from customer tips, and this settlement helps hold a well-known Lexington employer accountable for flaunting these laws.”

The settlement resolves claims for 79 servers in Kentucky, 42 servers in Ohio, and 52 servers in Indiana, with the award for Kentucky plaintiffs totaling $546,237.65, surpassing the combined settlement amounts for Indiana and Ohio. On average, participating class members will recover $5,250, with the largest individual settlement exceeding $35,000.

To finalize the litigation settlement, a fairness hearing is scheduled for October 30, during which the court will review the agreed settlement. In the interim, class members will go through a notice process and must submit a claim form to receive their settlement payments.

Garrison highlighted the substantial recovery resulting from the settlement, noting the relief it would provide to the servers who participated in the settlement. He told the Herald-Leader, “Our law firm represents workers in the restaurant industry throughout Kentucky and Tennessee, and this settlement represents a remarkable recovery that will provide thousands of dollars in relief to each server who participates in the settlement.”

Tony’s Restaurant has yet to provide a statement on the settlement.

This recent settlement is not the first legal issue Tony’s has faced regarding alleged tip theft. Previously, two separate lawsuits were filed by former employees Christopher Sullivan and John Harley, who made similar accusations against the restaurant. Sullivan’s suit was filed in federal court, while Harley’s lawsuit was filed in Fayette Circuit Court.

Harley’s lawsuit claimed that Tony’s forced him and other tipped employees to participate in a tip pool that distributed their tips to salaried members of management, including the maitre d’. The lawsuit alleged that this violated the Kentucky Wages and Hours Act, which permits restaurants to pay hourly employees less than minimum wage with the expectation that tips will make up the difference. According to Harley’s suit, he worked as a bartender at Tony’s Steaks & Seafood from January 2016 to March 2017, receiving approximately $5 per hour.

Sullivan, in his original lawsuit, claimed that he worked at Tony’s from February 2015 to May 2021 and was paid less than minimum wage. The lawsuit asserted that the restaurant improperly claimed the tip credit on his wages, violating federal and state labor laws.

Previously, Tony’s Restaurant denied all the allegations in responses to both Harley and Sullivan’s lawsuits.

Despite the recent settlement, the litigation is not over for Tony’s Restaurant. Attorneys representing bartenders who worked at the Lexington location filed a new class-action lawsuit in Fayette County on Tuesday. Emily Rice, a former employee, alleges that Tony’s Restaurant required bartenders to participate in a tip pool that involved sharing tips with other employees. Rice claims that the restaurant violated the minimum wage and overtime requirements of the Kentucky Wages Hourly Act. According to the lawsuit, the tip-sharing was mandatory and employees were discouraged from challenging the practice.

As the legal proceedings continue, Tony’s Restaurant faces ongoing scrutiny regarding its employment practices and treatment of tipped employees. The outcome of the pending lawsuit will shed further light on the practices at the popular downtown establishment.

Photo: Tony’s Steaks and Seafood, 401 W Main St. (Google)