Judge refuses to stay litigation against Chickie's & Pete's alleging improper diversion of waitstaff tips

By Jon Campisi | Jun 13, 2013

The judge assigned to handle a class action against popular Philadelphia-area bar

The judge assigned to handle a class action against popular Philadelphia-area bar

Chickie’s & Pete’s has refused to stay the proceedings pending the outcome of a governmental audit.

U.S. District Judge R. Barclay Surrick, sitting in the Eastern District of Pennsylvania, recently denied a bid by the business and other defendants to put the litigation on hold pending the conclusion of a Department of Labor Wage and Hour Audit.

Chickie’s & Pete’s along with proprietor Pete Ciarrocchi, Jr., Packer Café Int., Wright Food Services, CPC Bucks County LLC, CPC International LLC, and Warrington CPC LLC, have all be named as defendants in lawsuits initiated by servers and bartenders in Pennsylvania and New Jersey who claim the food business improperly withheld tips from the employees, and diverted that money toward the payment of restaurant credit card machines.

The Pennsylvania Record reported on the first lawsuit, initiated by New Jersey resident Andrew LaPlante this past December.

Subsequent to LaPlante’s filing, three other lawsuits were filed by plaintiffs alleging the same claims.

The record shows that the four separate actions were consolidated into one case earlier this spring after a plaintiffs’ motion for class certification.

The day after the litigation was consolidated, defense attorneys filed their motion to stay proceedings, citing a November 2012 letter from the Department of Labor stating it would be conducting an investigation into various Chickie’s & Pete’s locations pursuant to the Fair Labor Standards Act.

The defendants argued that the court should grant their motion because allowing the litigation to move forward before the conclusion of the audit would prejudice the parties.

The plaintiffs opposed the motion to stay proceedings, however, arguing that a stay would cause “substantial and irreparable damage to class members, that halting proceedings at this juncture would add limited utility, and that the claims at issue are within the ordinary experience and competence of the Court,” according to  the memorandum accompanying Surrick’s June 4 order.

In deciding to deny the defendants’ motion, the judge wrote that, among other things, there would be a “strong potential harm” against the plaintiffs if the case were stayed because the statutes of limitations continue to run against potential plaintiffs who may join the litigation as class members.

The judge also shot down the defendants’ argument that they would face a hardship if a stay were not granted because, as claimed, they would be subjected to “excessive expenditures of time and money to litigate a class and collective action involving complex issues while also managing a DOL investigation.”

(The plaintiffs counter-argued that defending against litigation while facing a concurrent investigation is not a legally cognizable hardship justifying a stay).

“While litigation can be time-consuming and expensive, it is not an irreparable harm or hardship that should halt proceedings,” Surrick wrote, citing case law. “Defendants have not identified any other ways in which the continuance of this action would constitute a hardship.”

The judge also addressed the defendants’ assertion that a stay would streamline the proceedings by simplifying issues and promoting judicial economy.

At this point in their motion, the defendants had argued that judicial economy would be promoted by staying the litigation since the Labor Department investigation might make any civil claims moot, since the department is authorized to oversee repayments, if necessary, to current and former employees.

The plaintiffs, however, had argued that civil litigation would need to proceed regardless since there are numerous claims under both Pennsylvania and New Jersey state law that could not be adjudicated by the Department of Labor.

“As such, Defendants have not established that it would streamline proceedings to stay an action that would necessarily be litigated anyway,” Surrick wrote. “Under the circumstances, and after consideration of the factors courts analyze in determining whether to grant a motion to stay, we conclude that it would be inappropriate at this juncture to grant Defendants’ Motion.”

The litigation alleges that Chickie’s & Pete’s and the other defendants engaged in a pattern and practice by which they improperly paid bartenders and waitstaff below minimum wage, and redistributed portions of the tips the workers earned, with that money being used to offset credit card payment processing fees and costs.

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