Ore. Wage and Hour Lawsuit Raises Corporate Structure Question

While many restaurants and cafes may be struggling to properly address the Internal Revenue Service’s recent update indicating that mandatory gratuities are not tips, there are still some legal gray areas in existing laws such as the Fair Labor Standards Act. One minimum wage and hour lawsuit seeks to obtain clarity regarding corporate structure on closely held businesses.

Shayla Mitchell and Natalie Ramirez both worked for various bars and restaurants in Salem and Keizer, Ore. However, both women are seeking unpaid overtime from business owners, arguing that over the course of a given week, they would exceed 40 hours while working shifts at some combination of the eateries and pubs.

Their unpaid overtime lawsuit argues that the five corporations are “one single integrated enterprise” because one or the other of the pair is the majority shareholder and “financial control is centralized within a single office through which payroll is maintained for each corporate defendant.” Further, employees like Mitchell and Ramirez were assigned shifts at one or more locations based on demand.

If that is the case, then the minimum wage and unpaid overtime lawsuit plaintiffs argue that the owners should pay them based on their work at all of the locations combined. As evidence of the direct links, one manager told Mitchell when she wanted to stop working at a location but maintain the rest of her schedule that if “you quit one, you quit them all.”

In the case of Natalie Ramirez, the service charge class action lawsuit attorney argues that she regularly performed off-the-clock work after the close of business at 2:30 a.m., of which her supervisor was aware and did nothing. In both cases, the women are seeking back wages, unpaid overtime and penalty wages. For the latter, the minimum wage and hour lawsuit alleges that because they were not promptly paid following the end of the working relationship with the corporation, they are entitled to pay pursuant to Oregon state law.

The minimum wage and unpaid overtime lawsuit is Shayla Mitchell and Natalie Ramirez v. Heyou Raymond Lin, et al., Case No. 14-cv-00492, in the U.S. District Court for the District of Oregon.

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Ramifications from this case could be significant. Corporate organization can have a significant impact on how restaurant employees are paid. Further, based on the change in the service charge rule regarding mandatory gratuities, it may increase the likelihood that a server or bartender is due back pay and unpaid overtime.

If you believe that you have been affected by improper application of the Fair Labor Standards Act and other regulations, you may have legal options. Fill out the submission form at the Unpaid Overtime Lawsuit: Wage & Hour, Overtime Pay Class Action Lawsuit Investigation now for a free case eligibility review.