Jon Campisi Dec. 18, 2012, 8:38am

A popular Philadelphia-area restaurant chain has been named as a defendant in a class

action lawsuit filed by members of its waitstaff over claims that the eatery improperly diverted tips belonging to the employees to make up for credit card machine fees.

The lawsuit, filed Dec. 6 at the U.S. District Court in Philadelphia on behalf of Andrew LaPlante and others similarly situated, claims that Chickie’s & Pete’s violated minimum wage laws by requiring bartenders and food servers to pay two percent of their gross credit card receipts back to the restaurant in cash, a practice commonly referred to by some employees as the “Pete Tax,” in reference to the business’s owner.

The named defendants are Wright Food Services LLC, doing business as Chickie’s & Pete’s, and proprietor Peter Ciarrocchi.

The lead plaintiff, LaPlante, lives in Pennsauken, N.J. and was employed as a bartender at the defendant’s Philadelphia International Airport location from the summer of 2008 to the spring of 2011.

The defendants are accused of violating the federal Fair Labor Standards Act, as well as Pennsylvania’s Minimum Wage Act and Wage Payment and Collection Law, and Philadelphia’s Gratuity Protection Bill.

Chickie’s & Pete’s, which the suit says was named the country’s best sports bar by ESPN, has various locations throughout Philadelphia, the greater Southeastern Pennsylvania region, and parts of New Jersey, including the Jersey Shore.

The plaintiff brings the case as a collective action on behalf of himself and other similarly situated individuals, which are identified as any persons who work or worked as bartenders and waitstaff for the defendants at their Philadelphia International Airport location any time three years before the filing of the complaint through entry of judgment in the action.

The complaint claims that the prospective class could number around 100.

The suit alleges that the defendants have “intentionally, willfully, and repeatedly” harmed the plaintiff and prospective class members by engaging in a pattern and practice by which the defendant deprives bartenders and servers of tips that they earned, improperly paid its bartenders and waitstaff below minimum wage, and redistributed portions of the tips earned by the plaintiffs to the defendants, who are not entitled to tips under the FLSA and PMWA.

“Defendants have engaged in their unlawful conduct pursuant to a corporate policy of minimizing overhead costs and denying employees compensation,” the lawsuit reads.

The complaint states that the Philadelphia Gratuity Protection Bill in particular prohibits an employer from taking a deduction from gratuities charged on a credit card for any credit card payment processing fees or costs.

The tip out amount paid to the defendants by the bartenders and waitstaff could total between $60 and $75 per employee on any given night, resulting in up to a 10 percent loss of income for the plaintiffs per day, the lawsuit alleges.

The suit goes on to state that a manager at each Chickie’s & Pete’s location would collect the so-called “Pete Tax” from the plaintiffs after each shift, and once a week someone from the defendants’ corporate office would pick up the collected money.

“This tip-out scheme at Chickie’s & Pete’s was not voluntary or optional, and bartenders and waitstaff were told upon securing employment at Chickie’s & Pete’s that they must take part in these practices as a condition of their employment,” the lawsuit states.

Aside from a court order certifying the complaint as a class action, the plaintiff seeks declaratory relief that the defendants violated the law and injunctive relief prohibiting the defendant from continuing to carry out its actions.

The suit also seeks unspecified compensatory damages, interest and attorney’s fees.

The plaintiff is being represented by New York lawyers Louis Pechman and Jessica N. Tischler, of the firm Berke-Weiss & Pechman LLP, as well as East Brunswick, N.J. attorney Mitchell Schley.


The federal case number is 2:12-cv-06820-RBS.

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