Reata squeezes business costs out of workers making below minimum wage, lawsuit says

Rieger restaurant owner Howard Hanna on paying his staff above minimum wage

The Rieger restaurant owner Howard Hanna talks about Missouri minimum wage vote and his restaurant's protocol of paying well above the minimum wage
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The Rieger restaurant owner Howard Hanna talks about Missouri minimum wage vote and his restaurant's protocol of paying well above the minimum wage

A group of 27 servers and bartenders have filed a lawsuit alleging that the two Reata Restaurants in Texas are illegally forcing them to pay for business expenses that ought to be the responsibility of the restaurant owners.

The latest complaint was filed in federal court in Pecos, in west Texas, on July 16, near Reata’s Alpine location. But according to Drew Herrmann, the lead attorney representing the employees, many work at Reata’s Fort Worth location.

The servers, who make $2.13 an hour, and the bartenders, who make $5.15 an hour, say they are being forced to pay for hand-made, leather check presenters and ink pens with the Reata logo, as well as name tags, pen lights, wine keys, uniforms and aprons, using their own money.

“It was the defendant’s pattern and practice to require all of its servers and bartenders to pay for these items,” the lawsuit stated.

Attorneys representing Reata filed an answer to the lawsuit Friday, denying almost all of the allegations contained in the lawsuit and challenging the decision to file the lawsuit in west Texas.

All of the employees who filed the lawsuit worked in Fort Worth, the filing said. Reata filed a separate motion asking the court to dismiss the lawsuit and order that arbitration be transferred and proceed in Fort Worth.

The motion states that a court cannot compel arbitration to occur outside of its district, so the case must be transferred to the Northern District of Texas in order for arbitration proceedings to be held.

Federal law allows restaurants to pay tipped employees below minimum wage but not less than $2.13 per hour and the business must make sure the amount of tips is enough to meet the remainder of the federal minimum wage, currently $7.25 an hour.

Another bone of contention included in the lawsuit concerns the inclusion of a manager in the tip-sharing arrangement at Reata, the lawsuit states. Waiters and waitresses contributed 4 percent of their sales to a tip pool and it is illegal for a manager to participate, according to the lawsuit.

Reata management also required servers to work at $2.13 an hour while the restaurant was closed between 2 p.m. and 5 p.m. and there was no opportunity to earn tips, the lawsuit said. These non-tipped duties exceeded 20 percent of the time spent at work during the workweek, the lawsuit said.

Servers washed dishes, prepared food, mopped, cleaned bathrooms, took out the trash, swept, vacuumed floors, set up and tore down settings for private events — duties for which they should have received minimum wage pay — but were paid at below minimum wage rates, specifically $2.13 per hour, the lawsuit stated.

Reata answers

Reata’s arbitration program, called the Behavioral Standards for Employee Dispute Resolution Program, is mandatory for all Reata employees and applies to the employer, whether they had signed a completed form or receipt or not.

“The Program explains that all work-related problems involving legally protected rights are covered by the external procedures of mediation and arbitration,” Reata’s motion states.

Most of the allegations in the lawsuit that were not denied outright were said to be false, according to court documents.

Reata maintained in its filings on Friday that the employees who filed the lawsuit are obligated to participate in mediation or arbitration proceedings that they agreed to when they were hired, according to court documents.

Reata’s attorneys also challenged the idea that the workers were poorly compensated, pointing out that two full-time employees listed in the lawsuit earned in excess of $50,000 annually.

One full-time Reata employee reported earning more than $51,000 in 2018 and more than $49,000 in 2017, while another reported more than $51,000 in earnings in 2018 and more than $42,000 in 2017, according to Reata’s filing.

Another part-time employee reported earnings of more than $24,000 in 2018 and more than $27,000 in 2017, court documents show.

Reata denied charging employees for business expenses and denied it broke any laws, its filing states.

Attorneys for Reata and Reata management did not respond to requests for comment regarding this lawsuit. One attorney representing Reata, Angella H. Myers, did send an email.

“We do not discuss pending litigation of our clients,” Myers said. “We reserve our comments regarding pending litigation, preferring to respond to the allegations in Court.”

Herrmann called arbitration a private court system and too expensive for his clients.

“The filing fee for arbitration for the employee is $300 each,” Herrmann said. “And that’s 27 separate cases if we go the arbitration route. Businesses get these arbitration documents to keep everything private. But a judge will have to decide whether this goes to arbitration or not.”

Wage theft allegations

What Herrmann characterized as wage theft or tip theft is a problem throughout the restaurant industry, he said.

“There’s a mentality among management to see those servers as disposable because they are paying someone only $2.13 an hour,” he said. “If they are working a 10-hour shift, the employer is only paying them about $20 a day. They feel like they can do what they want to with these employees.”

Perhaps the total amount of the wage discrepancies are small, but small in this case is a matter of perspective, according to Herrmann.

A restaurant employer may not notice a $5 deduction, but to the single mother who does restaurant work, $5 can be the difference between putting a gallon of milk in the refrigerator that week or having to go without.

“You can very quickly end up with a situation where it’s costing the employee to go to work there,” Herrmann said. “The check presenter cost $25 each and they have to have two at the start of every shift. That’s 25 hours of work. You have to present all of your equipment at the host stand and if you don’t have all of your equipment, you have to buy what you need before you go to work.”

About half of the employees that he speaks with are unaware they are being underpaid, Herrmann said.

Even when employees are aware of the law, many do not want to seek a legal remedy because they are afraid or losing their job, Herrmann said. Employees are also afraid a former boss will tell a prospective employer not to hire them because they have filed a work-related lawsuit.

Some employees believe they cannot afford a lawyer or the legal assistance that they can afford will be outmatched by the legal help their employer can afford, Herrmann said.

“You would think the restaurants would be satisfied with a law that allows them to pay help $2.13 an hour and want to do everything that they could to follow that law,” Herrmann said. “But no, they want employees to help them pay their business expenses, too. The employers who want to do it right do it right. Some are going above and beyond and that’s the way it should be.”

Michael Green, employment law professor at the Texas A&M School of Law, said he is not aware of the scope of wage theft in the restaurant industry but added that it is an issue that people have complained about before and that the issue touches on a lot of other related problems.

“It relates to the whole fight for $15 an hour movement,” he said. “And some workers cannot complain because they are undocumented and complaining might expose their immigration status.”

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Mitch Mitchell is an award-winning reporter covering courts and crime for the Star-Telegram. Additionally, Mitch’s past coverage on municipal government, healthcare and social services beats allow him to bring experience and context to the stories he writes.