A U.S. District Court in Minnesota approved a $1.25 million settlement between OSI Restaurant Partners LLC, parent of the Outback Steakhouse chain, and about 1,200 Outback Steakhouse servers in Minnesota, who alleged in a lawsuit that Outback unlawfully required them to share their tips with bussers and hosts.
The class-action lawsuit, which was filed in April 2010, alleged that the tip-sharing violated Minnesota Fair Labor Standards Act prohibitions on employer-run and mandated tip pools. The U.S. District Court approved the settlement Tuesday.
Joseph Kadow, executive vice president of Tampa, Fla.-based OSI, said Outback settled the suit to “avoid the distraction and expense of prolonged litigation.”
“We believe our tip-sharing practices were in accordance with Minnesota law,” he said.
“We are very pleased with the settlement, which gives back to servers a large percentage of the gratuities that the lawsuit alleges Outback required servers to pay into the tip pool,” said plaintiffs’ counsel Anna P. Prakash, an attorney with Nichols Kaster, PLLP, which has offices in Minneapolis and San Francisco.
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