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Supreme Court denies Applebee's appeal in 'tip credit' lawsuit

January 17, 2012|By Tiffany Hsu
  • Applebee's may have to go to trial in September in minimum-wage lawsuit
Applebee's may have to go to trial in September in minimum-wage lawsuit (Applebee's )

The Supreme Court on Tuesday turned down an appeal from Applebee’s International Inc., which is battling a lawsuit from more than 5,500 bartenders and servers accusing the restaurant chain of underpaying them.

The high court declined to hear Applebee’s case, which focuses on a practice in which restaurants pay employees reduced minimum wage by factoring in the extra boost provided by tips.

Known as a “tip credit,” the practice is banned in states such as California and Minnesota but permitted in Missouri, where many of the plaintiffs work.

Many of those employees claimed that, because they spent more than 20% of their time performing duties such as cleaning and prepping, they should earn full minimum wage during hours worked without tips.

“It’s a really a different occupation,” said Tim Van Ronzelen, one of the lead attorneys for the plaintiffs, who first filed the suit more than four years ago.

Applebee’s turned to the Supreme Court in October seeking to overturn an earlier ruling from a federal court of appeals in Missouri allowing the case to proceed to trial in September. The company claims that prep work and cleanup is part of employees’ tip-earning responsibilities.

Applebee’s, with roughly 2,000 locations, is a subsidiary of Glendale-based DineEquity Inc.

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