A Great Place for Wage Theft
By
Phil Mattera in Dirt Diggers Digest
Restaurant giant Darden, which is being pressured by hedge funds
to sell off both its Red Lobster and Olive Garden chains, got some good news
recently when it appeared once again on Fortune magazine’s
list of the 100 companies that are supposedly the best places to work.
That designation, for a company that has been the subject of
numerous allegations of labor abuse, is even more puzzling than the idea that
Darden would be better off without the outlets through which it grew into an $8
billion industry powerhouse.
For more than a decade, Darden has been accused by groups such
as ROC United of using various means to shortchange its workers on their
paychecks, a practice known as wage theft.
Three years later, Darden disclosed that it had paid $4 million to
settle two class-action lawsuits alleging that it had violated California law
in requiring servers and bartenders to make up for cash shortages at the end of
their shifts. Also in 2008, Darden reported that it had paid $700,000 to settle
another California suit claiming several types of wage and hour violations,
including a failure to provide itemized wage statements and timely pay when an
employee was terminated.
In 2011, following a U.S. Labor Department investigation that
found workers were not being paid for all their hours, Darden agreed to pay
$25,000 in back wages to 140 current and former servers at an Olive Garden in
Mesquite, Texas. The company was also fined $30,800. That same year, the
company consented to pay
$27,000 in back pay and was fined $23,980 in connection with a similar federal
investigation at a Red Lobster in Lubbock, Texas.
In the wake of the two Texas cases, suits were brought against
Darden in several other states. For example, in early 2012 ROC United filed a class action case on behalf of
Darden workers at another of the company’s chain, Capital Grille. For technical
reasons, the action was later divided into separate actions in five
jurisdictions (all are still pending).
An even larger legal challenge to the company came in September
2012, when a class action suit was filed in federal court in Miami on behalf
of all current and former employees (back to 2009) at five of Darden’s chains.
The 54 named plaintiffs in the case stated that the company did not pay them
for the period between the beginning of their shifts and the time customers
began to arrive, thereby forcing them to do prep work off the clock.
Darden was
also accused of failing to pay time-and-a-half for those working more than 40
hours per week and for improperly applying the lower sub-minimum wage for tipped
workers when they were engaged in non-serving tasks.
The complaint in the case — which described
the company as having “a steadfast, single minded focus on minimizing its labor
costs” by arranging to have “as many tasks as possible performed by as few
employees as possible” — also alleged that two of the named plaintiffs had
suffered retaliation from management because of their participation in the
case. Some 13,000 current and former Darden servers have joined the suit, which is pending.
The ROC United wage theft actions against Capital Grille also allege that the chain has engaged in a pattern
of racial discrimination, including the denial of better-paid server and
bartender jobs to non-white workers.
In 2009 the U.S. Equal Employment Opportunity Commission announced that Darden’s Bahama Breeze
chain would pay $1.26 million to settle allegations that managers at its
restaurant in Beachwood, Ohio had subjected 37 black workers to repeated overt
racial harassment. In addition to the monetary relief, the chain signed a
three-year consent decree requiring it to improve its anti-discrimination
practices throughout the country.
In September 2013 the EEOC filed suit against Red Lobster, alleging
that female workers at its restaurant in Salisbury, Maryland have been
subjected to “pervasive sexual harassment.” According to the agency, the
harassment was committed by a manager, whose superior was said to have failed
to take prompt action on the matter despite complaints from at least one of the
affected workers.
Darden has also sought to lower its labor costs by becoming more
active in the public policy arena. Until 2007 Darden spent less than $250,000 a year on
federal lobbying. Beginning in 2008 that amount jumped to well over $1 million
annually.
The company is a prominent participant in the National
Restaurant Association (NRA), which promotes policies that enhance the bottom
line of chains such as Darden. It has opposed living wage initiatives, worked
to keep the minimum wage for tipped workers at $2.13 an hour (where it has
remained since 1991) and resisted efforts by labor groups to enact
mandatory paid sick days, often by promoting state laws that pre-empt local
ordinances on the issue. Darden is reported to have helped write the pre-emption
bill in Florida.
All of this somehow escaped the attention of Fortune and
the organization, the Great Place to Work Institute, which compiles the list. Or perhaps the
Institute doesn’t worry about real working conditions. A 2011 investigative report raised serious
questions about its methodology, suggesting it is mostly interested in selling
consulting services to the companies it is rating.
As a recent Alternet piece notes, the lack of an arm’s-length
relationship with those companies is also seen in the fact that Darden CEO
Clarence Otis has been a speaker at Institute events.
The designation as a “great place to work” is featured by Darden
on its website, but the dubious honor cannot change the company’s dismal labor
track record.
Note: This piece draws from my new Corporate Rap Sheet on
Darden, which can be found here.