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<em>Court also rejects ‘fail-safe class’ allegations</em>

The restaurant industry has been among the hardest hit during the current pandemic, but that has not prevented plaintiffs from pursuing class and collective action claims against it. A recent case, however, has rejected two fairly common problems inherent in these kinds of cases.

In <a href="/wp-content/uploads/sites/7/2023/07/Fogo-de-Chao-2021.pdf"><em>Balassiano v. Fogo De Chao Churrascaria (Orlando) LLC</em>, Case No. 6:19-cv-2140-Orl-78EJK</a> (M.D. Fla.), the plaintiff worked at the Orlando location of the Fogo de Chao Brazilian-style restaurant chain. Because of the Brazilian theme and the serving of meat off of skewers, several roles inside the restaurants have Brazilian titles and the lines between preparing and serving food are different from those in a more traditional American restaurant.

The defendants relied on the tip credit to satisfy their minimum wage obligations to servers, most of whom were referred to as “gauchos.” At issue was the assertion that the defendants used a tip-pooling arrangement that included so-called “kitchen gauchos” who at times were more focused on the preparation and seasoning of skewers, and hourly customer service representatives. The plaintiff moved to certify a class under Florida law and for conditional certification under the Fair Labor Standards Act (FLSA). Both motions were denied.

The initial problem, particularly under Rule 23, was the class definition, which consisted of “[a]ll servers, bartenders, and carvers [gauchos] who worked for Defendants within Florida during the five (5) years preceding this lawsuit who were not paid full and proper minimum wage as a result of Defendants’ illegal tip pooling practices.” This was a so-called “fail-safe” class because the class definition incorporated an element of the claim, making the judgment cover no one if the defendants prevailed. The district court found no difficulty in concluding that this class, which assumed that class members were only those who suffered from illegal conduct, was a fail-safe class.

The court then turned to the class allegations, but found that the claims lacked commonality because there were essentially two classes: (1) those who claimed to have been harmed due to the operation of the tip pool and (2) those who claimed that they were not properly treated as tipped employees because they performed substantial amounts of non-tipped work. The court also found that the plaintiff’s claims were not typical of the class as he could not represent those in positions he had not held, such as that of bartender.

For similar reasons, the court denied conditional certification under the FLSA. It found that the proposed collective included those in different positions in different restaurant locations and, as in the case of the class allegations, with differences in their claims.

The bottom line: A common legal theory does not bind a class when the class members are in different situations.

Florida Court Denies Conditional Certification in Tip Credit Case