One Fair Wage gets one more shot at suing Olive Garden's parent over tips

The suit would seek damages from Darden Restaurants for distracting One Fair Wage from its lobbying mission.
Does tipping foster sexual harassment? A judge says yes. | Photo: Shutterstock

A federal judge has given the labor group One Fair Wage a third shot at suing Darden Restaurants for using the tip credit, prolonging a head-scratcher of a legal battle that hinges on whether the union group had to work harder because Darden servers work for tips.

The courtroom fight has persisted since April 2021, when One Fair Wage filed a lawsuit that blames Darden for the sexual harassment and racial disparity its servers and bartenders suffer. OFW contended that the employees would not have drawn that behavior if Darden, the parent of such casual-dining chains as Olive Garden and LongHorn Steakhouse, had not used the tip credit in the 43 states where employers are allowed to wield the employer concession.

The credit essentially enables employers to count workers’ tips as part of the pay front-of-house employees are due. 

OFW contended in the original suit that Darden fostered harassment and discrimination by making its front-of-house employees dependent on tips. Workers were loath to rebuff the inappropriate advances of customers because the offending guest might then forgo a tip, according to OFW.

It also asserted that persons of color made less money in Darden restaurants than their White counterparts because of customers’ prejudices. The restaurant company was essentially passive about gratuities, leaving the decision of how much to leave entirely to the guest, OFW asserted. Without the mediation, negative racial attitudes could come into play, it contended.

Yet OFW did not ask that any sort of remuneration be made to Darden employees. Rather, it argued in the original suit it should be compensated by the restaurant company because the need to comfort aggrieved Darden workers pulled it away from lobbying to kill the tip credit or otherwise work on behalf of the industry’s workforce.

That was too much of a stretch, decided the first court to hear the OFW’s complaint. It dismissed the suit, saying in effect that OFW had not made a direct connection between Darden’s actions and harm to the labor group. If no direct harm was proven, how could OFW ask for compensation?

The OFW pulled back and recast its complaint, aiming to demonstrate in the second version of the lawsuit that it did indeed have standing to sue.

On Tuesday, the U.S. District Court for the Northern District of California again dismissed the suit, but held off on a definitive ruling in Darden’s favor.

Instead, U.S. District Judge Edward Chen noted that OFW had referenced a brief that had been submitted to another district court, the notoriously liberal Ninth Circuit Court. That document touched on the circumstances that might allow a third party to sue for indirect damages.

Chen allotted the labor group three weeks to regear its argument that it has grounds to sue, incorporating the findings of the Ninth Circuit.

If it does, Darden would have two weeks to respond. If it doesn’t, wrote Chen, he’d issue a final decision in Darden’s favor.

Though the matter was essentially pushed down the road, Chen nevertheless addressed OFW’s assertion that tipping fosters sexual harassment.

“OFW contends that female employees, in order to obtain desperately needed tips, must dress and behave in ways that solicit customer favor and this predictably leads to increased sexual harassment,” he wrote. “These allegations are plausible (indeed, are arguably predictable).”

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