Labor & Employment Law Daily Wrap Up, WAGE-HOUR—CLASS ACTIONS—S.D. Ohio: Employer failed to show it acted in good faith to notify tipped employees of tip credit, (Jun 9, 2026)

By Ronald Miller, J.D.

The employer produced no evidence that store management regularly followed up on their notice policies or ensured employees were able to clock in to the meeting code consistently when performing side work.

Following a three-day bench trial, a federal district court in Ohio found in favor of employees against corporate defendants regarding employee complaint allegations of minimum wage and overtime violations. With respect to the corporate defendants, the court determined that they should have taken affirmative steps to ensure that the tip credit notice was being communicated orally and that meeting codes were being utilized properly so that employees would receive the minimum wage. Accordingly, the corporate defendants did not have objectively reasonable grounds for believing they were not violating the FLSA, and they did not act in good faith. However, the court found no liability against individual defendants who owned four Buffalo Wild Wings franchises (Pender v. Flying S. Wings dba Buffalo Wild Wings, No. 2:21-cv-04292 (S.D. Ohio June 5, 2026)).

FLSA claims. On August 31, 2021, an employee filed a collective action seeking to resolve an FLSA dispute regarding overtime and minimum wage claims against a Buffalo Wild Wings franchisee. The employee also named two owners of the named corporations as individual defendants.

The claims arose from the employer’s alleged practice of paying their employee servers and bartenders subminimum hourly wages under the tip-credit provisions of the FLSA, which also violates the Ohio Constitution and the Ohio Wage Act. On March 13, 2023, the court granted the employee’s Motion to Certify Class. On November 18, 2024, the employer filed a Motion for Summary Judgment and Decertification of Collective Action. In resolving those motions, the court found that there were genuine issues of material fact as to whether the employer provided adequate notice to the employees of its intent to use the tip-credit. Accordingly, the court denied both parties motions for summary judgment on those issues.

The court also denied summary judgment as to whether the employees were paid adequately for non-tipped work related to tipped work and for expo work regularly performed by servers. The court granted the motion in favor of the employees as to non-tipped work for the janitorial and maintenance-related duties performed during shift change and closing. Additionally, the court granted the employer’s motion for summary judgment as to: (1) any claim that the employees were not paid appropriately for work performed during their opening shifts; and (2) notice-related claims after November 2021 for employees who signed a notification form, starting on the date the form was signed. On February 17, 2026, the court began a three-day bench trial to resolve the remaining issues.

During the relevant time period, the corporate defendants owned the four Buffalo Wild Wings restaurants at issue in this matter. The named plaintiff was employed as a server at one of the restaurants from October 2019 until June 2021. An opt-in plaintiff worked as a bartender at one of the other locations from July 2019 to May 2021.

Notice of tip credit. During the relevant time period, the employer maintained an unwritten policy that employees were to be informed by managers during the orientation process about their rate of pay, that they would earn tips, that if they did not earn enough tips to satisfy minimum wage, their tips would be supplemented, and that they could keep 100 percent of the tips earned.

Despite the policy, the named plaintiff was never informed of the tip credit during her interview or orientation. At no time during her employment did Buffalo Wild Wings explain the tip credit to her. The employee was trained not by a manager but by another server who did not explain the tip credit. During her employment, the employee later trained several employees herself, to whom she did not explain the tip credit.

During her interview, the opt-in plaintiff was told about her position, her pay, that her pay would be a subminimum wage, and that she would also be earning tips. However, she never had the tip credit explained to her during her employment at Buffalo Wild Wings, nor did anyone tell her the specific dollar amount of tip credit they intended to take, that all of her tips were to be retained by herself, or that the tip credit would not apply unless she was informed of the tip credit provisions.

Employee handbook. During the relevant time period, the employer also relied on an employee handbook as a form of tip-credit notice. The handbook provided that “[e]mployees who receive tip income will be provided a written policy statement regarding any applicable policy on mandatory tip pooling or use of the tip credit to satisfy the minimum wage obligation.” However, the named plaintiff and the opt-in plaintiff attested that they never received a written policy explaining the tip credit at any point during her employment.

Poster notice. During the relevant time period, the employer also displayed, where employees could see them, Department of Labor posters at the back of all four restaurants that reflected the relevant federal and state laws, and specifically discussed the tip credit. The restaurants maintained a policy in which managers were supposed to show new employees the posters and explain that they were there for their convenience. The named plaintiff never read the poster. Further, the posters did not represent that the restaurants intended to use the tip credit.

POS system. All employee hours were tracked at the restaurants using a Point of Sale (POS) system. Different job code options reflected different hourly wages dependent on the wage code entered. When employees clocked in under the meeting job code, they were paid full minimum wage, but, when they clocked in under the server or bartender codes, they received the subminimum wage rate.

The restaurants maintained an unwritten policy that employees were to clock into the meeting code when performing opening or closing duties, “outs,” and other side work. The evidence presented at trial demonstrated that the employees were trained on the job code policy inconsistently. Despite maintaining an unwritten policy on job codes, this policy was not enforced in practice.

The employer also maintained a policy that allowed employees to edit POS system time entries to correct clock-in time or job codes. Under this policy, employees could adjust the code for work performed under the server code to the meeting code by submitting a form.

Side work. After each opening shift, servers were required to complete their “outs” before leaving for the day. Outs consisted of section specific tasks listed on a checklist such as sweeping the floor, cleaning tables, cleaning the garbage can, cleaning the sink, cleaning tea urns, filling ice, wiping the cupboards, and stocking the server station with condiments, napkins, and wet wipes. On average, the named plaintiff completed her outs in 30 to 45 minutes. About 80 percent of the time, she completed her outs under the server code due to the length of time it typically took for a manager to help her switch to the meeting code.

The named plaintiff also testified that servers frequently rolled silverware throughout their shifts. She also testified that closing duties took on average an hour to an hour and a half.

Shift change duties. At the start of a midday shift, servers were expected to complete shift change duties that consisted of stocking the server station, making tea, preparing lemons and limes, sweeping sections, cleaning tables, running food, and running dishes to the back. Servers were also expected to do dishwasher duties throughout the entirety of their shifts. During any closing shift, servers were expected to clean bathrooms.

Individual defendants. Both individual defendants had ownership interests in the restaurants at issue. They also were both involved in making decisions about promoting high-level managers, including regional managers, and general managers, ensuring managers attended trainings, setting menu pricing, attending annual franchise conferences, and were involved in marketing. Both individual defendants had access to the corporate credit card and had oversight into purchases. However, neither was involved in interviewing, hiring, training, firing, disciplining, making personnel decisions, or setting the schedules, wages, or job duties for servers and bartenders.

Tip credit notice. Under the FLSA, employers may receive a tip credit allowing them to pay tipped employees less than the federal minimum wage so long as the wage paid, when combined with the tips earned by the employee, meets or exceeds the federal minimum wage. Importantly, an employer is required to inform an employee of the FLSA requirements prior to paying her pursuant to such provisions.

Here, the employer contended that during the relevant time period employees were provided notice that it intended to treat tips as a satisfying component of the minimum wage requirement via: (1) oral notice; (2) written notice in the employee handbook; and (3) posters displayed on site. Additionally, the employer argued that in November 2021, it began using a written tip credit form that provided notice in compliance with the FLSA from that point on. For their part, the employees argued that the employer was required to inform employees of the five requirements listed by the Department of Labor in 29 C.F.R. § 531.59(b) yet failed to do so.

There was no evidence that the employer informed the named plaintiff or opt-in plaintiff that the amount of a tip credit claimed may not exceed the value of the tips actually received, that they were to retain all tips themselves, or that the tip credit shall not apply to any employee who has not been informed of all of these requirements. Accordingly, there was no evidence that the policy of informing employees of all the requirements in Section 531.59(b) occurred in practice.

Posters. At trial, the employer offered evidence confirming that Department of Labor posters were prominently displayed in each restaurant. The named plaintiff confirmed that she was aware of the posters. Additionally, the employer offered testimony that these posters were used to explain the tip credit and managers were trained to show these posters to new employees.

As for the employee handbook notice, the employer provided no evidence of any such written policy in existence before November 2021. While the opt-in plaintiff confirmed she was told about receiving a subminimum wage, and that she would get tips, the named plaintiff testified that the tip credit provisions were never explained to her.

Because the posters did not expressly indicate that the employer intended to treat tips as satisfying part of their minimum wage obligations, and the employees never signed an acknowledgment or received an individual handout, there was no conclusive evidence that employees were told about the tip credit.

Unrelated work. Additionally, the employees claimed that they were paid a subminimum hourly wage in violation of the FLSA while performing: (1) non-tipped work that was unrelated to their jobs as servers and bartenders; and (2) non-tipped work related to the tipped work that exceeded 20 percent of their time.

At trial, the employees testified that during shifts they were frequently expected to perform unrelated tasks such as dishwashing, sweeping, taking out trash, and acting as an expediter. The employer did not dispute that they were frequently expected to perform these tasks. Additionally, during each shift, servers were expected to perform outs and closing duties that could take anywhere from 30 minutes to an hour and a half depending on the day.

Although the employer offered testimony it was restaurant policy that when performing outs and closing duties servers were instructed to clock in under the meeting job code to ensure their work was compensated at minimum wage, this policy was not enforced or consistently workable. The employer presented no evidence that management reinforced the importance of the meeting code or consistently facilitated the employees switching to the meeting code when necessary. Accordingly, the employer failed to refute that its policies ensured employees received minimum wage for unrelated side work in practice.

Tip-supporting work. Next, the employees needed to adduce evidence at trial demonstrating that the employer paid them subminimum hourly wages to perform non-tipped work which, although related to their tipped occupation, exceeded 20 percent of their time worked during each workweek.

Here, the court disagreed with the employer’s contention that the employees failed to differentiate between time spent on tipped work, related non-tipped work, and unrelated non-tipped work. The employees provided time estimates for each task as opposed to more generally stating that the servers spent 20 percent of their time on related but non-tip supporting duties. Accordingly, the employees met their burden through providing detailed testimony regarding the related/tip-supporting side work duties they were expected to do and how often they were engaged in these duties. Further, the employer failed to produce convincing evidence that negated the reasonable inference from the employees’ testimony that they spent more than 20 percent of their time on related duties. Thus, it was reasonable for the court to award the employees damages based on estimations for both their related and unrelated non-tipped duties.

Individual defendants. The court found that the employees failed to demonstrate the individual owners of the franchisees were employers under the FLSA. First, the owners were never involved in the hiring or firing of employees. While the evidence demonstrated that they had operational control over general and regional managers, there was no indication that the individual defendants “held the purse strings,” set employee compensation, engaged in employee training, or set up employment policies for the restaurants. Accordingly, the employees failed to establish that the owners individually were employers under the FLSA as a matter of law.

Willfulness. The employees failed to adduce evidence of prior investigations or lawsuits that would have put the defendants on notice of potential FLSA violations. Instead, they contended the employer acted willfully because: (1) it failed to ensure employees were paid minimum wage for non-tipped work; and (2) its handbook confirmed it knew about but ignored the tip credit notice requirement. The court disagreed.

The evidence presented at trial demonstrated that the employer had taken various steps towards compliance with the tip credit notice requirement. It posted posters, indicated in the handbook that employees were to receive a written notice regarding the tip credit, and managers were to discuss the tip credit orally with new employees. However, the court determined that the employer’s failure to ensure managers were actually providing tip credit notice via written notice or orally communicating this to new employees was more akin to negligence. Therefore, there was inadequate evidence of willfulness here and the statute of limitations was limited to two years under both the FLSA and Ohio law.

Good faith. The employer contended that it acted in good faith given that the evidence adduced at trial indicated it adopted procedures and policies to comply with the FLSA. But the court concluded that this was not sufficient to prove good faith. The employer produced no evidence that store management regularly followed up on their notice policies or ensured employees were able to clock in to the meeting code consistently when performing side work.

This lack of evidence that the employer took affirmative steps to ensure notice to servers and bartenders of the tip credit demonstrated that it did not have objectively reasonable grounds for believing it was not violating the FLSA, and that it did not act in good faith.

The case is No. 2:21-cv-04292.

Judge: Marbley, A.

Attorneys: Robert E. DeRose, II (Barkan Meizlish DeRose Cox) for Kayla Pender. Todd Andrew Fichtenberg (Emerson Thomson Bennett) for Flying S. Wings dba Buffalo Wild Wings, Flying Buffalo Inc., Chase & Green Corp., Scott Lloyd, and Stephon Green.

Companies: Flying S. Wings; Buffalo Wild Wings; Flying Buffalo Inc.; Chase & Green Corp.

Cases: WageHour ClassActions Overtime MinimumWage CoverageLiability OhioNews