The New York City restaurant industry has, over the last several years, been hit with a flood of lawsuits. Many of these have focused on illegal tip pools but many have also alleged that employees were misclassified as exempt. These cases often generate large liabilities for employers and must be avoided. A recent example of this trend is a suit against a famous chef, Salt Bae, who is charged with misleading five workers to emigrate to the United States only to then misclassify them as exempt to not pay overtime. The case is entitled Ok et al. v. Nusret New York LLC et al., and was filed in federal court in the Southern District of New York.

The workers claim they worked at various Nusr-Et steakhouses for as many as ninety (90) hours per week, Cooks in restaurant kitchenbut were never paid overtime, which would violate both the Fair Labor Standards Act and New York laws. The Complaint, filed by well-known employee advocate Louis Pechman, alleges that “upon their arrival in the United States, defendants assigned plaintiffs to work grueling hours in nonmanagerial griller positions at the restaurants. Throughout their employment, defendants misclassified plaintiffs as exempt workers to avoid paying them legally required overtime pay, instead unlawfully paying plaintiffs on a salary basis.”

The workers emigrated from Turkey because the chef urged them to do so. He submitted letters to the immigration services to assist them in those efforts. When they arrived in America, however, he allegedly compelled them to sign a document in which they acknowledged they were “sous chefs” and, as stated in the Complaint, the document they signed “falsely [indicated] that [they] would have supervisory and management authority in their roles at the restaurants.” This was a fiction, alleged the workers who claim they had no managerial powers or functions but simply grilled meat.

The workers alleged they worked at least seventy-two (72) hours per week and were paid a fixed salary, but no overtime. They also allege that when Salt Be was present, their hours per week rose to ninety (90). They also allege that Salt Be used “an aggressive managerial style, frequently cursing at plaintiffs and blaming them for the other employees’ mistakes.” They also alleged they had to stay overnight at the restaurants to make sure there was no vandalism during the George Floyd protests of last summer in the City.

The Takeaway

As Mr. Pechman stated (and he is right) these misclassification controversies occur quite often in this industry. It is black-letter law that just calling someone a Manager or a “sous chef” and compensating that person via a salary does not convert that person to an exempt employee. The employee must also perform the job functions (e.g. hiring, firing, etc.) that managers do to qualify for the exemption. If they do not perform these duties, the employer is inviting the kind of lawsuit discussed herein.

And increasing its potential for damages….