Activists looking to eliminate the sub-minimum wage for tipped employees — a practice that they say keeps workers in poverty, encourages sexual harassment and leads to racial discrimination — are taking a new approach in their campaign to end the two-tiered wage system in America: They’re arguing the lower tipped wage, sometimes as little as $2.13 an hour, violates the Civil Rights Act of 1964.
The first test of this strategy arrived Tuesday. One Fair Wage, a national worker-advocacy group, filed a federal complaint against Darden Restaurants Inc., one of the largest hospitality groups in the country, alleging that the company’s practice of paying tipped workers a sub-minimum wage causes them to suffer more sexual harassment than non-tipped workers and leads employees of color to earn less in tips than their White co-workers. The practice, the group argues, violates Title VII of the Civil Rights Act, which “prohibits employment discrimination based on race, color, religion, sex and national origin.”
Rich Jeffers, a senior director of communications for Darden, which includes such national chains as Olive Garden and the Capital Grille, said “these allegations are baseless” in a statement to The Washington Post. “Darden is a values-based company built on a culture of integrity and fairness, respect and caring, and a longstanding commitment to diversity and inclusion.”
One Fair Wage pursued its latest legal strategy on tipping after discovering a research paper written by an attorney who was pursuing a graduate degree at Harvard Law School. The paper made the argument that the sub-minimum wage violates the Civil Rights Act, based on tipping research conducted by, among others, professor Michael Lynn of Cornell University’s School of Hotel Administration.
The paper “resonated so strongly with what we had heard from workers for so long,” said Saru Jayaraman, president of One Fair Wage and a graduate of Yale Law School. It also fit into the larger cultural movement of many Americans coming to grips with the country’s long history of racial inequality.
The group decided to put the legal theory into practice by filing its complaint against Darden with the U.S. Equal Opportunity Commission. In the past, the organization has helped put forth successful ballot initiatives to eliminate the two-tiered minimum wage in several jurisdictions, including Michigan and Washington, D.C., only to have them undermined by legislatures and city councils. In 2018, the D.C. Council repealed Initiative 77, which passed with 55 percent of the vote and would have gradually eliminated the two-tiered system in the city.
“Obviously, it’s frustrating when legislators overturn the will of the people, not just in D.C., but in Michigan and Maine. We won it in all three places,” said Jayaraman. “I will say that the fact that we keep winning and the legislators have to keep overturning it should be a clear indication that there’s overwhelming public support for this issue.”
One Fair Wage decided to target Darden not just because of its size — the company employs about 125,000 people, down from about 185,000 pre-pandemic, said Jeffers — but also because Darden and the National Restaurant Association have actively lobbied to maintain the sub-minimum wage. (The sub-minimum wage allows restaurants to pay tipped employees as little as $2.13 an hour, as long as tips cover the remainder of a jurisdiction’s full minimum wage; if not, the employer is responsible to cover the gap.)
“I am not saying that Darden is much worse than the rest of the industry,” said Jayaraman. “I’m saying they’re emblematic, and they’re a leader in maintaining these standards. I think what we’re filing today is very, frankly, symptomatic of the whole industry. It’s just that Darden is a particularly clear example of what this industry has not just tolerated, but perpetuated for too long.”
Jeffers painted a different picture of tipped workers at Darden restaurants. He said, across all company brands, tipped workers earn more than $20 per hour on average, and have very low turnover rates. “Fifty percent better than the industry average,” Jeffers said. More than half of the company’s managers come from the hourly ranks, he added, and 52 percent of those promoted from hourly positions are women and 32 percent are people of color.
Not all workers are as content as Darden’s statistics would indicate based on interviews with hundreds of company workers who have sought emergency relief from One Fair Wage during the pandemic, Jayaraman said. In fact, two servers who work for the Capital Grille chain also filed EEOC complaints on Tuesday. Pamela M. Araiza, a Latinx server who works in Washington D.C., and Jean-Louis Jeffrey, a Black server who works in New York, both charged that they were routinely assigned sections and guests known for not tipping well. They also alleged harassment from management.
“I was also consistently assigned to sections of the restaurant known to generate less in tips, which management referred to as ‘Section 8’ or ‘my low-income world,’ ” Araiza noted in her statement to the EEOC.
Jeffers said the server claims are also baseless. He noted that servers at the Capital Grille earn an average of $41.42 per hour, including tips.
The EEOC will now have to investigate the complaints. If the agency finds they have merit, it will issue One Fair Wage and the servers a “right to sue” letter, which would allow them to take their cases to state or federal court. But Jayaraman hopes it doesn’t have to go that route. Her group has already organized worker strikes at Darden restaurants in several cities, including New York, Washington and Chicago. She hopes Darden will eliminate the sub-minimum wage on its own, just as the company started covering sick leave for hourly workers during the pandemic, after apparently resisting previous calls to provide paid leave for sick employees.
“We have a direct, very recent precedent of them moving on something they said they would never move on,” Jayaraman said. “We hope they take this moment to do the same thing on race.”
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