Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—E.D. La.: Restaurant servers granted summary judgment on overtime, improper credit card fees, retaliation claims, (Aug 12, 2026)

By Ronald Miller, J.D.

The employer failed to maintain or produce complete timekeeping records for each employee, thus failing to establish exactly how many hours each person worked during the relevant period.

Restaurant employees were granted summary judgment in their favor by a federal court in Louisiana against claims their employer violated the FLSA, improperly charged credit card fees against employee tips, and retaliated against an employee who complained. The parties stipulated as to the employer’s liability under the FLSA for withholding earned overtime wages for the employees. Moreover, the employer conceded that it had taken an amount greater than the actual transactional fees charged by the credit card companies from the tip pool. However, because the parties disputed the employer’s liability as to a claim the general manager shared in a tip pool, the court denied summary judgment as to this issue (Pulliam v. Banana Blossom Thai Café, LLC, No. 25-1341 (E.D. La. Aug. 10, 2026)).

Restaurant employees alleged their employer engaged in persistent wage theft from employees for years. Specifically, they claimed that the employer refused to pay time-and-a-half for overtime, illegally deducted credit card fees from employees’ tips, and required servers to participate in an illegal tip pool.

On June 30, 2025, the employees filed this putative class action alleging violations of the FLSA and Louisiana law. The employees asserted that they were part of two classes of putative plaintiffs, which consist of “Putative Overtime Class Members” and “Putative Tip Pool Class Members.” Moreover, the employees asserted that once the FLSA violations were brought to the employer’s attention it retaliated against them by “imposing new restrictions on them and terminating benefits.”

Additionally, the employees asserted claims against the employer under Louisiana law, contending that the employer’s actions amounted to illegal fines due to the deduction of credit card processing fees from the employees’ checks, conversion and misappropriation of the monies wrongfully withheld from their paychecks, failure to pay wages, and a violation of the Louisiana Unfair Trade Practices Act.

On July 27, 2026, the parties filed a “Joint Proposed Pretrial Order.” Both parties also filed pretrial memoranda on contested issues of law. On August 3, 2026, the court converted the parties’ pretrial memoranda into motions for summary judgment.

Overtime claim. The parties stipulated as to the employer’s liability under the FLSA for withholding earned overtime wages for the employees but disputed the amount of overtime wages owed. The employer failed to maintain or produce complete timekeeping records for each employee, thus failing to establish exactly how many hours each person worked during the relevant period. Where “‘the employer’s records are inaccurate or inadequate,’ a plaintiff need only show by ‘just and reasonable inference’ that she was an employee, worked the hours, and wasn’t paid.” Accordingly, the employees will be afforded the opportunity at trial to show by “just and reasonable inference” the hours worked.

The employees will be permitted to present individualized and/or representative evidence to establish a just and reasonable inference as to the amount of work performed. However, the employer will also be allowed to present evidence to attempt to negate the inferences raised by the employees’ evidence. Accordingly, the court granted the employees’ motion to the extent that it sought summary judgment as to the employer’s liability on the unpaid overtime claims but left the calculation of damages to the jury.

Tip pooling. Next, the court considered the employees’ claims they were owed back wages for illegal tip pooling and improper credit card processing fees. A restaurant may not claim a tip credit unless all tips received by a tipped employee have been retained by the employee, except that the pooling of tips among employees who customarily and regularly receive tips is not prohibited.

Here, the employer stipulated that employees were required to participate in tip pooling that “allotted 10% of tips to salaried kitchen staff, 5% to the host, a percentage to credit card fees, and split the remainder between servers and expeditors.” If the salaried general manager of the restaurant clocked in as a server, she also received a share of the tips. While this appeared to be a violation of the FLSA tip credit provision on its face, the key determination of whether other employees may receive a share of the tip pool hinges on whether those employees “customarily and regularly receive tips” excluding the tips received through the tip pool.

Because the parties disputed the employer’s liability as to this claim and the determinative factor is a question of fact, the court denied summary judgment on this claim, leaving the determination of liability to the jury.

Improper credit card processing fees. Another FLSA exception under which an employer may retain employee tips is that an employer may deduct the actual cost of credit card processing fees from tips. The employer stipulated that from approximately 2015 to mid-2024, it deducted 5 percent from the tip pool for “credit card processing fees,” taken for both credit card and debit card sales, greater than the actual transactional fees charged by the credit card companies. Accordingly, there was no genuine dispute of material fact as to the employer’s liability for the excessive credit card fee claim. Therefore, the court granted summary judgment in favor of the employees as to the employer’s liability for the improper credit card fee claim but left the calculation of damages to the jury at trial.

Retaliation claim. The employees next asserted that the employer retaliated against them in response to being informed that its wage practices were in violation of the FLSA. The employees pointed to a joint summary of facts which stipulated that the employer limited an employee’s hours and prohibited him from covering shifts for other employees. The employer also placed other employees who participated in the meeting on a “chopping block list.”

The FLSA retaliation claim has three elements: “(1) participation in a protected activity under the FLSA; (2) an adverse employment action; and (3) a causal link between the activity and the adverse action.”

The employer stipulated that employees met with the restaurant’s owner to notify him that his practices were in violation of the FLSA, which is a protected activity under the FLSA. While the employer stipulated that it limited the employee’s hours and placed other employees on a “chopping block,” it did not stipulate what effect being on the “chopping block list” had on the other employees. Accordingly, the court granted summary judgment as to the employer’s liability for retaliation against the employee but denied summary judgment as to any other employees’ retaliation claims.

Tip credit notice. Employers must provide a range of specific information to tipped employees before taking a tip credit under the FLSA. An employer that fails to provide the required information may not take the section 3(m)(2)(A) tip credit. Here, the employer stipulated that it “failed to inform Plaintiffs by either oral or written notice” of the required information prior to taking a tip credit. Therefore, the court granted summary judgment in favor of the employees as to the employer’s liability on the failure to provide notice claims, leaving the damages calculation to the jury at trial.

The case is No. 25-1341.

Judge: Brown, N.

Attorneys: William Brock Most (Most & Associates) for Connor Pulliam. John D. Perez (Butler McDonald) for Banana Blossom Thai Cafe, LLC.

Companies: Banana Blossom Thai Café, LLC

Cases: WageHour Overtime MinimumWage Retaliation StateLawClaims LouisianaNews