The United States Department of Labor (DOL) has recovered $188,000 in back wages from Louisville, Kentucky-based small coffee chains Sunergos Coffee and Please & Thank You.
The DOL announcement comes less than two weeks after the agency announced similar labor law violations against another Louisville coffee retailer, Heine Brothers, which agreed to pay back $300,000 in back wages to baristas.
All three DOL investigations resulted in alleged violations of the Fair Labor Standards Act, which was revised in 2020 to guarantee that all tips are given to hourly workers, as opposed to managers, supervisors or employers.
“Federal law protects earned tips to make sure they are paid to the workers who received them for their good service,” DOL Wage and Hour District Director Karen Garnett-Civils said in an announcement of the latest cases. “Employers must follow the required criteria for operating tip pools or face costly consequences.”
The DOL’s Wage and Hour division has recovered $108,705 in back wages and liquidated damages for 55 employees of Please & Thank You, which operates four brick-and-mortar cafes as well as an Airstream trailer, plus a cookie business.
The agency also recovered $79,715 in back wages and damages for 70 Sunergos workers. Sunergos operates five cafes and a production roastery in Louisville. A group of employees from the coffee company elected to unionize last month.
Please & Thank You Owner Brooke Vaughn told DCN that the business paid back the wages in part because it could not afford to fight the case. She described the case as a kind of cautionary tale for other coffee shop operators, especially regarding the application of job titles using the word “manager.”
Vaughn said the company has a regional manager that visited all stores and conducted managerial work such as hiring and firing, but that other workers were managers merely in title. Those employees have now been retitled as “team leads.”
“[The DOL] kind of just applied a template to all businesses, and it doesn’t really matter what your personal business structure is,” Vaughn told DCN. “I would say that the most important part is that other coffee shops need to know what the legal definition of manager is. They need to be concerned if they have somebody with a role as manager that isn’t actually doing managerial duties because the DOL doesn’t care.”
Sunergos did not immediately reply to DCN’s request for comment.
The DOL’s Wage and Hour Division has been more active in Fair Labor Standards Act investigations under the Biden administration as part of a stated commitment to better protect the rights of essential workers. In addition to numerous resources for workers seeking to file complaints, the agency offers a confidential help line for employers (866-487-9243) as well as online compliance toolkits.
Vaughn described the Please & Thank You case as “nonsensical” given the overall satisfaction of employees, lack of turnover and the shared responsibilities employees drawing from the tip pool.
Said Vaughn, “I was somebody that had faith in government systems until this happened.”
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Nick Brown is the editor of Daily Coffee News by Roast Magazine.