Donna Goodison reports in the Boston Herald that Morton’s Restaurant Group Inc. has settled a national class-action lawsuit filed in Boston that alleged waiters for the upscale steakhouse chain were forced to give some of their tips to managers and were paid less than the minimum wage.
The Chicago company will record an approximately $13.4 million charge related to the class-action suit and the settlement of all other so-called wage-and-hour claims against it dating back to 2003. The sum includes cash payments for up to a four-year period and stock.
Mark Johnson, a former waiter for Morton’s Boston restaurant on Boylston Street from 1998 to 2002, filed the class-action lawsuit in U.S. District Court in Boston in 2005. The suit alleged that Morton’s waiters were illegally required to give a percentage of their tips to managers, even while receiving the lower minimum service wage instead of the full minimum wage. The alleged chain-wide practice violated the federal Fair Labor Standards Act
The lawsuit was settled in arbitration. “The matter has been amicably resolved,” said Shannon Liss-Riordan, the waiters’ Boston attorney. She declined further comment.
In a statement, Morton’s denied the allegations, but said it agreed to the settlements to avoid additional legal fees, “uncertainty” surrounding the litigation and devoting management time to it.
Settling “is in the best interest of our company, our shareholders and our employees,” Scott Levin, general counsel for Morton’s, said in the statement.