Federal court orders Portland restaurants to pay $540K to employees after illegally splitting tips

Employer:              Pizzicato Inc.

                                    121 South Bancroft St.

 Portland, OR 97239                                                                                        

Type of action:          Consent Judgment and Order

Name of defendants: Pizzicato Inc; Mark Frankel; Tracy Frankel; and John-Felix Rippel

Background: Aninvestigation by the U.S. Department of Labor’s Wage and Hour Division found 11 restaurants operating under Portland-based restaurant chain Pizzicato illegally allowed managers to participate in tip pools and by doing so withheld a portion of employees’ earned tips. Federal law prohibits restaurant employers from tipping out managers from a tip pool, including managers paid on an hourly basis. The investigation also revealed the employer hired a 17-year-old minor to drive a motor vehicle, a violation of the Fair Labor Standards Act’s hazardous occupations for minors.

Resolution: The consent judgment permanently enjoins Pizzicato owners Mark and Tracy Frankel and company officer John-Felix Rippel from violating the FLSA and orders the payment of $270,101 in back wages as well as $270,101 in liquidated damages, for a total of $540,202 for 367 employees. The court also ordered Pizzicato to pay $29,797 in penalties. 

Court: U.S. District Court for the District of Oregon

Quotes: “The resolution of this case should remind restaurant employers that the law forbids managers and supervisors to participate in tip-pools and pocket a portion of employees’ tips,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The U.S. Department of Labor is committed to ensuring that employees receive all the money they earn, including tips paid by customers.”

“Wage theft, including employers’ pocketing workers’ tips, is a major concern for restaurant industry workers, who are some of the most vulnerable, low-wage workers in our community,” added Wage and Hour Division District Director Katherine Walum in Portland. 

The division’s Portland district office conducted the investigation. The San Francisco Regional Office of the Solicitor reached the consent judgment in court.

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. You can find other information on the agency’s website if you think you may have been misclassified as an independent contractor, or want to know 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.

Docket Number: 3:34-cv-00202-SI