Labor & Employment Law Daily Wrap Up, WAGE-OUR—CLASS ACTIONS—D. Mass.: Restaurant employee’s class and collective action claims survive employer’s motion to dismiss, (Jun 26, 2025)

By Ronald Miller, J.D.

The employee alleged that, because he and other employees were not paid a base wage and were compensated only with tips, their hourly wages were less than the minimum wage.

Because an employee plausibly alleged the existence of putative class and collective members whose claims could be resolved on a class-wide basis, a federal district court in Massachusetts denied an employer’s motion to strike class allegations and dismiss collective action allegations. The court rejected the employer’s contention that the employee’s Rule 23 class allegations should be stricken as overbroad because they cover all hourly employees at the restaurant, including both tipped and untipped staff in the front and back of the house. These arguments went to the merits of whether classes should be certified under Rule 23 and were premature. Whether the putative collective is overbroad, in turn, is an issue that can be addressed if the employee moves for conditional certification of the collective (Cao v. Hungry Pot Dartmouth Inc., No. 1:24-cv-11797-JEK (D. Mass. June 24, 2025)).

The employer is a Korean barbecue restaurant. At any given time, it has approximately 19 non-managerial employees: nine workers in the front of house, including servers, and 10 workers in the kitchen.

Between April 17 and April 23, 2024, the employee worked 72.2 hours as a server at the restaurant. He spent 14 of those hours (two hours per day) performing non-tipped work, including opening up the restaurant, washing pots, and cleaning the grill. According to his immediate supervisor, the employee did not receive a base wage or salary; instead, he was paid entirely in tips because he is Chinese and because the employer believed that he was undocumented. Non-Chinese workers, in contrast, were paid base salaries of approximately $2,000 or $2,100 per month plus tips.

Over the course of the week the employee worked in April 2024, he received $2,995.26: $1,345.26 in cash tips; $1,181.18 in cash, which represented a portion of his credit card tips; another $118.82 in cash; and a $350 Zelle payment. The employee alleged the employer improperly retained $1,601.93 of his credit card tips. The employer did not inform him that it would apply a “tip credit” toward its minimum wage obligation.

In July 2024, the employee filed this action alleging that the employer violated the FLSA by failing to pay him and similarly situated employees a minimum wage, failing to pay 1.5 times their regular rate for overtime work performed in excess of 40 hours in a given week, and unlawfully retaining their tips, and that it similarly violated state wage and hour laws. The employee sought to represent a collective for the FLSA claims, and a Rule 23 class.

The employer filed a motion to dismiss the FLSA collective action allegations and to strike the Rule 23 class action allegations.

Motion to strike class action allegations. The employer first moved to strike the Rule 23 class action allegations. However, the court determined that the employee adequately alleges that there are two groups of putative class members whose state law claims are susceptible of resolution on a class-wide basis. The first group is composed of all former and current non-exempt employees at the restaurant who, during the relevant period, were subjected to the defendants’ policies of failing to pay minimum wage or overtime. The second group is a subset of the first that consists of all current and former nonexempt tipped employees at the restaurant who were subjected to the employer’s policy of withholding their tips. These allegations collectively support the plausible inference that the employer’s policies have affected non-exempt employees and violated state law.

The court rejected the employer’s contention that the employee’s Rule 23 class allegations should be stricken as overbroad because they cover all hourly employees at the restaurant, including both tipped and untipped staff in the front and back of the house. The employer’s “concerns regarding the appropriate contours of the putative class” can be addressed at the class certification stage.

At this juncture, the “dispositive question” is not whether the complaint satisfies the dictates of Rule 23 but whether the employee “pleads the existence of a group of putative class members whose claims are susceptible of resolution on a class-wide basis.” Because the employee has sufficiently alleged such class-wide allegations, the employer’s motion to strike the class action allegations was denied.

Motion to dismiss FLSA collective action. The “basic elements” of the employee’s FLSA claims are that (1) he and other workers were employed by the employer; (2) the work involved interstate activity; and (3) either they were undercompensated for their work, or the employer illegally withheld their tips. To sustain his collective action allegations under the FLSA, the employee must also show that he is “similarly situated” to putative members of the collective.

For the same reasons articulated with respect to his claims under Massachusetts law, the employee plausibly alleged that the employer’s policies—namely, not paying workers minimum wage or overtime and unlawfully retaining tips—affected the restaurant’s non-exempt employees and violated the FLSA.

The court rejected the employer’s contention that the employee failed to adequately allege that he is “similarly situated” to other potential collective members because he was allegedly paid only in tips as a server because he is Chinese. Further, the court rejected the employer’s contention that he is not similarly situated to employees who worked in the kitchen, received a base wage, or are not Chinese. The court observed that these arguments bear on whether “[c]onditional certification of a FLSA collective action” is proper, but the employee has not yet moved for conditional certification of an FLSA collective.

The case is No. 1:24-cv-11797-JEK.

Judge: Kobick, J.

Attorneys: Aaron B. Schweitzer (Troy Law) for Dengtao Cao. Kathleen R. O'Toole (Conn Kavanaugh Rosenthal Peisch & Ford) for Hungry Pot Dartmouth Inc.

Companies: Hungry Pot Dartmouth Inc.

Cases: WageHour ClassActions MinimumWage Overtime Immigration Procedure MassachusettsNews