When a large company with multiple franchises is faced with a lawsuit, sometimes there’s a question of whether the company itself is at fault, or the franchisee. Many franchisees choose that career path because they want to be their own boss, but different companies maintain various levels of control over their franchises. The situation is usually beneficial to both parties, but when there’s a lawsuit over business practices, sometimes there’s a question of whether the parent company should be held responsible, or just the franchise owner.
In the case of DoubleTree, the massive hotel chain recently tried to argue it should not be included as a defendant in a recent class action overtime lawsuit involving one of its hotels in Tarrytown, New York.
According to the complaint, hourly, nonexempt employees working in the hotel’s housekeeping and food and beverage departments were allegedly told it was hotel policy to not pay workers more than 40 hours a week, no matter how many hours they actually spent working. If the allegations turn out to be true, such a policy violations both New York labor law and the federal Fair Labor Standards Act (FLSA).
In addition to defining overtime as any time spent working after eight hours a day or forty hours a week, the FLSA requires employers to pay all their hourly, nonexempt workers one and one-half times their normal hourly wage for all the overtime they work. There are exceptions to the overtime requirement, but the FLSA is very specific about the types of employees that can qualify for the exemption, and service personnel working in housekeeping or food and beverage don’t normally meet the requisite conditions.
The class action lawsuit further alleged the hotel used tip pools improperly. Pooling tips together and then distributing them among the service staff is legal only if the tips are being shared exclusively with employees who interact directly with customers and customers are made aware of the tipping policy.
The wage and hour lawsuit alleges customers were charged a gratuity of 12%, but the employees allegedly did not receive all the tips that were collected from this gratuity fee, nor were they informed in writing of the methods the hotel used to calculate how the money from the tip pools was paid out to employees.
Additionally, the class action lawsuit alleges Norma A., the banquet director, solicited 11% tips from customers while providing the allegedly false impression these tips would be shared among the service staff. In reality, Abdou allegedly kept the money from these tips. If true, such practices not only violate relevant state and federal labor laws, but also consumer protection laws.
DoubleTree claimed the franchisee who controls its hotel in Tarrytown is an independent contractor over which the hotel chain has no control. But the plaintiffs provided convincing evidence to the contrary, including that DoubleTree controlled the type of software the hotel used, their standards for record keeping, and reserved the right to inspect the hotel at any time.
Such a policy is perfectly understandable for a large company with a vested interest in maintaining the quality of its brand and terms like these are regularly included in franchise agreements. However, because the franchisor maintains a vested interest in the success of the franchise and maintained a certain amount of oversight power, DoubleTree arguably cannot deny all responsibility for the business practices of the franchisee.
The Chicago class action lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims by waiters and bus boys and other restaurant and hotel workers against national restaurant chains including Hilton, DoubleTree, W, Marriott, Sheraton, Holiday Inn, Extended Stay America, Staybridge Suites, Best Western, HomeTown Buffet, Old Country Buffet, Applebees, Chipotle, Red Lobster, Olive Garden, Cracker Barrel, Outback Steak House, Taco Bell, Burger King, Kentucky Fried Chicken, Starbucks, Dunkin’ Donuts, Wendy’s and hotels for mis-classifying employees as managers or assistant managers, forcing employees to work off the clock at business, failing to share all tips, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim these wage theft practices call us at (312) 869-4095 or contact us online.
The Chicago class action attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Oak Lawn and Naperville. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Lake, McHenry, Kane and Cook Counties.
Our Joilet, Arlington Hts. and Des Plaines overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have unpaid overtime and other employment right claims.