Evansville diner owner ordered to pay $390K in illegal tip pool, intimidation case
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
An Evansville diner owner must pay $390,000 in back wages and liquidated damages to employees, after the U.S. Department of Labor discovered his restaurant operated an invalid tip pool and that he retaliated against the employees who cooperated with the investigation.
On Feb. 28, the labor department filed a complaint in the U.S. District Court for the Southern District of Indiana seeking the award of back wages and damages to 44 employees working for Friendship Diner LLC.
The Southern District issued an order Aug. 20 for payment of back wages and damages.
The complaint was filed after employers failed to resolve the findings of an investigation by the department’s Wage and Hour Division.
During its investigation, the division discovered the following:
- The diner operated an illegal tip-sharing pool by requiring servers to return $10 in tips for each weekday shift and $15 for each weekend shift to management. The employers then either kept the tips or used them to pay bussers’ hourly wages.
- The diner’s owner, Bardhyl Shabani, failed to pay overtime at time and one-half the regular rate-of-pay for hours over 40 in a workweek. He also didn’t pay workers the federal minimum wage ($7.25) per hour and didn’t keep accurate payroll records.
“The court order will return these wages to the people who rightfully earned them,” said Wage and Hour Division District Director Aaron Loomis. “Any worker with questions about the wages they’re due should contact the Department of Labor for assistance and clarification.”
In March, the labor department filed a request for a restraining order and injunction after discovering Shabani was harassing and threatening employees and was trying to coerce them into giving false statements to investigators about the tip pool.
On May 13, the district court filed an order forbidding the diner’s employers from any form of harassment, intimidation or retaliation.
In addition to paying the $390,000, Shabani owes $10,000 in civil money penalties and is forbidden from all future violations of the Fair Labor Standards Act.
“The court order should remind all employers that every employee has the right to cooperate with federal investigators or to question their employers’ pay practices without fear of harassment or retaliation,” said Department of Labor Regional Solicitor Christine Heri in a news release. “The Department of Labor will continue to hold employers who violate workers’ rights accountable for their wrongful actions and take steps to prevent future violations.”
Indiana Lawyer reached out to Shabani, who sent the following statement:
“We disagree with much of the case, but agreed to settle and paid $400,000 to the government last week to get this over with and get money to our employees. We are thankful the government agreed to resolve the case in a way that mostly benefits current and former employees. We are grateful that most of the settlement money will go to them and stay in our community. We sincerely hope our current and former employees accept the money and it improves their lives.
“We are saddened by many of the things said about us in the news and on social media. Much of it is untrue. We would not try to hurt our employees. We love them. We think this is evidenced by the fact that many of them have worked with us for years and continue to work with us today. We remain committed to doing things the right way and supporting our employees, customers, and community. We are grateful for their continued support.”