December 16, 2010 6:03 PM

Tip Sheet: Tim and Nina Zagat's Guide to Restaurant Class Actions

Posted by Ross Todd

On Tuesday, New York's most famous restaurant-rating couple, Tim and Nina Zagat, weighed in on the Op-Ed page of The New York Times with an essay decrying what they clearly see as a scourge plaguing the city's finer eateries: a bevy of class action lawsuits in which restaurant servers claim they are being shortchanged in various ways by management.

The news peg for the Zagats' opinion piece was the New York Department of Labor's new "Proposed Hospitality Wage Order," which was published for public comment in October and is due to take effect January 1. The regulation would, among other things, change the rules governing the practice of tip-pooling by restaurants.

While D. Maimon Kirschenbaum's name was nowhere to be found in the Zagats' piece--which did allow for the possibility that restaurateurs do sometimes give those who work the front of the house less then their due--his presence was barely hidden to anyone who knows the territory.

That's because, just five years out of Fordham Law School, the 31-year-old name partner at employment plaintiffs firm Joseph, Herzfeld, Hester & Kirschenbaum has carved out a speciality practice suing some of New York's most famous restaurants on behalf of employees in wage and hour disputes.

Just this summer Maimon (pictured right) filed suit against Mario Batali and Masaharu Morimoto, adding the two celebrity chefs to a long list of bold-faced defendants that includes Jean-Georges Vongerichten, Keith McNally, Laurent Tourondel, and Drew Nieporent.

•Click here to download a chart published in the December issue of The American Lawyer that details some of Kirschenbaum's suits.

There are, of course, other plaintiffs lawyers pressing cases for workers against New York restaurants, but Kirschenbaum sticks out to members of the employment defense bar. "I have not seen somebody rise as quickly as Kirschenbaum as far as building a practice and a name for himself," says Fox Rothschild employment litigation partner Carolyn Richmond, who has squared off in litigation against Kirshenbaum about ten times.

Indeed, in the past five years, Kirschenbaum and his colleagues have filed about 100 suits against restaurants and banquet halls on behalf of servers and other tipped employees. "He found a niche. He dug in his heels and certainly found a little area," Richmond says.

But with regulations changing to clarify who can share tips and with eatery owners increasingly concerned with the need to adopt so-called best practices when it comes to labor matters, Richmond says she's unsure how long Kirschenbaum's niche will be around.

The suits Kirschenbaum brings, largely on behalf of putative classes of servers, allege claims of wage and hour violations and inappropriate sharing of tips. (Kirschenbaum's team also brings the occasional employment discrimination or individual employment case as well.) While those claims might sound like small potatoes, so to speak, restaurant defendants face potential penalties under both New York state and federal labor law.

"What makes the litigation so darned expensive for employers is there are penalties under both state and federal law which are multipliers," says Jackson Lewis partner Felice Ekelman, who has faced Kirschenbaum in multiple cases. "Why isn't anybody helping these employers?"

Many restaurants pay tipped employees at a rate lower than minimum wage. With New York's six-year statute of limitations, a restaurant found to have wrongly included an inappropriate person in a tip pool could not only have to disgorge underpaid tips but also the difference between the tipped minimum wage and the actual minimum--a multiplier that can take possible damages into the multimillions for any restaurant with significant staff. (That's not to mention that if plaintiffs prevail on any of multiple claims, restaurant defendants could be responsible for picking up the tab for plaintiffs attorneys fees.)

So even in cases where restaurants staunchly deny any wrongdoing, Kirschenbaum and his team have gotten settlements of $2.5 million from Nobu, $1.785 million from Jean-Georges Vongerichten, and nearly $1.5 million from Keith McNally of Pastis and Balthazar. "One reason that many restaurants are motivated to settle is because it's too uncertain to fight," says Jackson Lewis’s Ekelman.

Richmond says Kirschenbaum's rise mirrors the rise of celebrity food culture. In fact, for a lawyer, he enjoys a certain level of celebrity on the food blogs. In addition to the sobriquet bestowed on him by New York Magazine's Grub Street ("patron saint of stiffed waiters"), he also earned the attention of foodie blog Eater, which has called him a "thorn in the restaurant industry's side" and a "notorious suer of restaurateurs."

Kirschenbaum's says his firm had handled plenty of wage and hour cases before he arrived, but that it wasn't until he came aboard that the restaurant-related docket began to swell.

"The area was relatively untapped," he says. "We took out an ad on some Web site called ShamelessRestaurants.com, and it was really miraculous the way that people started just piling in." 

It wasn't long before big-labor defense shops from Fox Rothschild and Jackson Lewis to Littler Mendelson, Seyfarth Shaw, and Proskauer Rose began showing up on the other side of the table. "It was a big deal in the beginning," Kirschenbaum says, "but as time passes on we continue to prevail against all of them, so it's not really that daunting of an experience."

One thing working in favor of Kirschenbaum and his clients until now: "For the most part the restaurants don't work on the same budget as Citibank and they're not really interested in hiring 300 lawyers to work on a case," he says. "We've kept sort of an open door for people to come in, and we really didn't discriminate in terms of big-money cases or small-money cases. Basically if there were cases against restaurants for withholding of tips, we brought them as long as claims were good."

Given the new regulations, the question now for Kirschenbaum is how many people will walk through that door--and whether the number will be big enough to cover a full meal or just a light bite.

 

Photo courtesy of D. Maimon Kirschenbaum

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