US Department of Labor sues Fort Wayne restaurant operator that refuses to pay $290K in back wages, damages owed to 30 servers

FORT WAYNE, IN – The U.S. Department of Labor has taken federal court action against the operator of 10 Fort Wayne-area restaurants that failed to pay $290,000 in back wages and damages to 30 employees.

Investigators with the department’s Wage and Hour Division allege Hall Drive-Ins Inc. – operating as Factory Restaurant and managed by Luke Hall ­­­– committed numerous violations of federal regulations that protect food service workers’ wages. Specifically, investigators determined the employer violated the Fair Labor Standards Act’s minimum wage and recordkeeping provisions when it did the following:

• Took servers’ tips by using a percentage of them to pay non-tipped kitchen staff. The employer paid servers hourly cash wages of $2.13 or $2.65 and relied on the tips they received to make up the remainder of the employer’s minimum wage obligations. However, by diverting servers’ tips to the kitchen staff, the employer created an illegal tip pool.
• Failed to inform servers that the employer was taking a tip credit for their wages.
• Deducted the cost of some servers’ uniforms from their pay, which dropped their hourly wage below minimum wage.
• Required servers to perform unpaid pre-shift work beginning 30 minutes before the restaurant opened and did not allow them to clock in until their first customer had arrived.

“After our investigation, Luke Hall agreed to change his business’ practices but refused to pay the back wages owed to nearly three dozen workers. His refusal led the U.S. Department of Labor to ask a federal court to force him to pay The Factory’s employees what they have earned,” explained Wage and Hour Division District Director Aaron Loomis in Indianapolis. “Violations like these are all-too-common in the food service industry, even by a well-established operator of 10 Fort Wayne-area restaurants.”

The department’s Quick Service Restaurants Compliance Assistance Toolkit explains wage laws for the industry.

Founded in 1972, Factory Restaurant is one of 10 food service establishments owned by Hall Drive-Ins Inc. The Don Hall’s restaurants enterprise also includes The Deck, The Gas House, Hall’s Hollywood, Takaoka of Japan, The Tavern and Triangle Park in Fort Wayne, Hall’s Prime Rib Restaurant in East State Village, and Tap Haus and Hall’s Commissary in New Haven.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for iOS and Android devices – also available in Spanish – to ensure hours and pay are accurate.