Unpaid Vacation Funds to be Distributed to Eligible Applebee’s Workers

A group of former Applebee’s employees will receive compensation for unpaid vacation under terms of a recent class action settlement.

Plaintiffs Amy Cook and Devin Muscarella initiated this Applebee’s class action lawsuit in 2013. They claimed defendant Applebee’s Services Inc. failed to distribute earned vacation pay to workers as they left employment with the company. They also accused Applebee’s of dodging minimum-wage requirements by assigning extra work duties to tipped employees.

Nationwide restaurant chain Applebee’s Services previously owned over a dozen Applebee’s restaurants in Illinois. It has since sold them to a franchisee.

Under terms of the unpaid vacation settlement, about 5,200 former Applebee’s employees will receive payments from a $650,000 settlement fund. Class Members eligible for payment include former employees who stopped working between 2003 and 2013 but who upon leaving the company were not paid for earned vacation time.

Former full-time workers will be paid in full for their unpaid vacation time, plus 50 percent interest. The minimum payment for former full-time employees is $50. Former part-time workers will receive a $34.50 payment.

As named plaintiffs, Cook and Muscarella will each receive a $5,000 incentive award. Two other Class Members will receive $1,000 each in exchange for assisting in mediation.

Class Members will not be required to file a claim, as Applebee’s will provide a list of former employees eligible for payment. Class Members may opt out of the settlement if they so choose.

According to Cook and Muscarella, Applebee’s clawed back earned yet unused paid vacation time from employees who quit working for the company, rather than paying them a lump sum for that time.

The plaintiffs argued this unpaid vacation should have been paid to workers as they left the company. Under Illinois employment law, employees working under a “length of service” vacation policy earn vacation benefits proportionately as labor is rendered. The plaintiffs argued this earned vacation is part of an employee’s wages and can’t be taken back.

The plaintiffs also claimed that Applebee’s paid them the lower wages of tipped front-of-the-house employees while having them do other work that should have qualified them for at least minimum wage. Minimum wage laws have exceptions for tipped employees, allowing their employers to pay them less than the regular minimum wage.

Cook and Muscarella say they were expected to complete duties like preparing food, washing dishes, and cleaning bathrooms, tasks that are only ancillary to their primary, tip-compensated duties of serving customers.

Assigning these tasks to employees making a lower wage violates the federal Fair Labor Standards Act and the Illinois Minimum Wage Act, the plaintiffs claimed.

The plaintiffs won class certification in September 2015. Judge Yandle noted then that whether a given employee was part-time or full-time may not likely matter, as all employees under a “length of service” vacation policy may have earned vacation benefits.

The Applebee’s Employees Unpaid Vacation Class Action Lawsuit is Cook, et al. v. Applebee’s Services Inc., Case No. 3:13-cv-01289, in the U.S. District Court for the Southern District of Illinois.

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