IN ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION ) ) ) ) ) ) ) ) ) ) BACK PAY CLAIM

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1 IN ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION NICOLE MCCURDY, On Behalf of Similarly Situated Persons, vs. Claimant, ALA CARTE ENTERTAINMENT, INC. Respondent. ) ) ) ) ) ) ) ) ) ) Case No. BACK PAY CLAIM Claimant Nicole McCurdy for her claim against Respondent Ala Carte Entertainment, Inc. ( Ala Carte ) and on behalf of other similarly situated claimants states as follows: NATURE OF CLAIMANTS CLAIMS 1. This lawsuit arises under the Fair Labor Standards Act, 29 U.S.C. 201, et seq. ( FLSA ), and the Illinois Minimum Wage Law, 820 ILCS 105/1, et seq. ( IMWL ) due to Respondent s failure to pay McCurdy and other similarly situated employees earned minimum wages and for failure to comply with the tip credit provisions of the FLSA and IMWL. 2. McCurdy and the other claimants were paid less than minimum wage, purportedly pursuant to the tip credit provisions of the FLSA. 3. But the FLSA requires that to take advantage of the tip credit, the employer must both notify the employee of the tip credit provisions and allow the employee to retain all of his or her tips. 4. Ala Carte failed to notify McCurdy and other claimants of the tip credit provisions and took their tips to cover shortages in the cash register drawers, resulting in two separate violations of the FLSA s tip credit provision requirements and also a violation of the IMWL s requirements.

2 THE PARTIES 5. On information and belief, Respondent Ala Carte operates approximately 22 bars, clubs and restaurants in the Chicago area, including Leg Room, 7 West Division Street in Chicago, and the Snuggery, 6733 North Olmstead Street in Chicago. 6. Claimant Nicole McCurdy resides in Cook County and worked as a bartender at Leg Room from the summer of 2006 until approximately October of 2010, when she transferred to Snuggery. She returned to Leg Room in approximately April 2011 and worked there until October 2011, when she left employment at Ala Carte. 7. McCurdy and other similarly situated employees are current and former tipped bartenders employed by Respondent. 8. At all relevant times, McCurdy was an employee of Ala Carte as defined by the FLSA, 29 U.S.C. 203(d), and the IMWL, 820 ILCS 105/3(d). 9. At all relevant times, other claimants in this action were employees of Ala Carte as defined by the FLSA, 29 U.S.C. 203(d), and the IMWL, 820 ILCS 105/3(d). 10. During the course of her employment by Ala Carte, McCurdy was not exempt from the minimum wage of the FLSA. 11. During the course of their employment by Ala Carte, other claimants in this action were not exempt from the minimum wage of the IMWL. 12. Ala Carte was McCurdy s employer as defined in the FLSA, 29 U.S.C. 203(d) and the IMWL, 820 ILCS 105/3(c). 13. Ala Carte was the employer of other claimants in this action as defined in the FLSA, 29 U.S.C. 203(d) and the IMWL, 820 ILCS 105/3(c). 2

3 14. Ala Carte is an enterprise as defined by the FLSA, 29 U.S.C. 203(r)(1), and is an enterprise engaged in commerce or in the production of goods for commerce as defined by the FLSA, 29 U.S.C. 203(s)(1). 15. On information and belief, Ala Carte s annual gross volume of sales made or business done exceeds $500,000, exclusive of excise taxes. 16. In the course of her employment by Ala Carte, McCurdy was engaged in interstate commerce. During the course of her employment by Ala Carte, McCurdy handled goods, including perishable food products that move in interstate commerce. JURISDICTION AND VENUE 17. On September 25, 2012, McCurdy filed a lawsuit styled McCurdy v. Ala Carte Entertainment, Inc., No (N.D. Ill.). The lawsuit was assigned to Judge John J. Tharp, Jr. The lawsuit sought relief for Ala Carte s violations of the FLSA and IMWL. The lawsuit sought relief on a collective basis under the FLSA and on behalf of a putative class of similarly situated bartenders under Federal Rule of Civil Procedure Along with the complaint, McCurdy filed a consent form to be a party plaintiff in a FLSA collective action. 19. At or after that time, 54 other plaintiffs filed consent forms to join the collective action. (One case settled while pending in federal court.) 20. On August 13, 2013 Judge Tharp ruled that McCurdy and the other plaintiffs were required to arbitrate their claims because they signed arbitration agreements. The arbitration agreement that McCurdy and the other plaintiffs signed is attached as Exhibit A. The agreement McCurdy signed is substantially similar to the agreements signed by the other members of the collective and class actions described below. 21. The American Arbitration Association has subject matter jurisdiction over this 3

4 action pursuant to the arbitration agreement entered into between Ala Carte and McCurdy, as well as the other claimants, and the August 13, 2013 ruling by Judge Tharp. FACTUAL ALLEGATIONS 22. The Fair Labor Standards Act requires employers to pay employees a minimum wage for hours worked during a week. The FLSA s tip credit subsection allows an employer to pay tipped employees a wage lower than minimum wage conditioned upon the employer meeting certain statutory requirements. Among those requirements are (1) that the employer inform employees of the provisions of tip credit subsection and (2) that the employee must retain all tips, with inapplicable exceptions. 23. During the three years preceding the filing of McCurdy s consent form on September 25, 2012, Ala Carte failed to inform McCurdy of the provisions of the tip credit subsection. 24. On information and belief, during the three years preceding the filing of McCurdy s consent form on September 25, 2012, Ala Carte failed to inform other tipped employees of the provisions of the tip credit subsection. 25. During the three years preceding the filing of McCurdy s consent form on September 25, 2012, Ala Carte regularly took McCurdy s tips to cover shortages in the cash register. 26. On information and belief, during the three years preceding the filing of McCurdy s consent form on September 25, 2012, Ala Carte regularly took the tips of other claimants in this action to cover drawer shortages. 27. Ala Carte s practices violated the FLSA and IMWL. McCurdy brings her FLSA claim as a collective action and her IMWL claim as a class action. Attached as Exhibit B are the 4

5 FLSA consent forms of 54 potential members of the collective and class actions, including McCurdy. COUNT I VIOLATION OF THE FAIR LABOR STANDARDS ACT (COLLECTIVE ACTION) 28. McCurdy re-alleges and incorporates the allegations of paragraphs 1 through 27 of this Complaint. 29. This count arises from Ala Carte s violation of the Fair Labor Standards Act, 29 U.S. C. 201, et seq., for its failure to pay minimum wages to McCurdy and other similarly situated bartenders. 30. This count is brought as a collective action under 29 U.S.C. 216(b). 31. During the course of her employment, McCurdy was entitled to be paid the applicable minimum wage under the FLSA. 32. During the course of their employment, other bartenders were entitled to be paid the applicable minimum wage under the FLSA. 33. Ala Carte s failure to inform employees of the tip credit provisions of the FLSA and taking of employees tips to cover drawer shortages violated the minimum wage provisions of the FLSA. 34. On information and belief, Ala Carte s violations of the FLSA were willful. WHEREFORE, McCurdy prays for judgment against Ala Carte as follows: A. Judgment in the amount of the owed minimum wages for all time worked by McCurdy during the three years preceding the filing of Ala Carte s consent form on September 25, 2012; B. Liquidated damages in an amount equal to the amount of unpaid minimum wages; 5

6 C. Damages of two-percent per month on unpaid wages under 820 ILCS 105/12(a); D. Reasonable attorneys fees and costs incurred in prosecuting this action; and E. An injunction precluding Ala Carte from violating the Fair Labor Standards Act. F. Such other and further relief as the Arbitrator deems just and proper. COUNT II VIOLATION OF THE ILLINOIS MINIMUM WAGE LAW (CLASS ACTION) 35. McCurdy re-alleges and incorporates the allegations of paragraphs 1 through 34 of this Complaint. 36. This count arises from Ala Carte s violation of the Illinois Minimum Wage Law, 820 ILCS 105/1, et seq., for its failure to pay McCurdy and the class of bartenders she represents all of their earned minimum wages. McCurdy and the class are current and former employee bartenders of Ala Carte who during the three years preceding the filing of their consent forms were paid the tipped-employee minimum wage. McCurdy brings this count as a class action under the American Arbitration Association s ( AAA ) Supplementary Rules for Class Arbitrations. 37. During the course of their employment, McCurdy was entitled to be paid the applicable minimum wage under the IMWL. 38. During the course of their employment, other bartenders were entitled to be paid the applicable minimum wage under the IMWL. 39. Ala Carte s practices of failing to inform employees of the tip credit provisions of the IMWL and using tips to cover drawer shortages violate the minimum wage provisions of the IMWL, 820 ILCS 105/4(a)(1) & (c) and 820 ILCS 105/ On information and belief, Ala Carte s violations of the IMWL were willful. 41. McCurdy seeks to certify this Count II, for violations of the IMWL as a class 6

7 action and ask the Arbitrator to determine the rights of the classes pursuant to those statutes, and any other damages due, and to direct Respondent to account for all back wages, penalties and prejudgment interest due to the McCurdy and the class she represents. 42. The arbitration agreement between Ala Carte and the individual bartenders allows for class actions. 43. McCurdy brings this action on her own behalf, and in her representative capacity, against Ala Carte. 44. On information and belief, class members similarly situated to McCurdy are so numerous that joinder of all members is impracticable. 45. McCurdy and similarly situated tipped employees are equally affected by the minimum-wage payment violations of Ala Carte; and the relief sought is for the benefit of the individual claimant and the class that claimant represents. 46. The issues involved in this dispute present common questions of law and fact. These common questions of law and fact predominate over the variations that may exist between members of the class, if any. 47. McCurdy and the class of similarly situated persons, on one hand, and Ala Carte, on the other, have a commonality of interest in the subject matter and remedy sought, namely back wages plus penalties, interest, attorneys fees and the cost of this lawsuit. 48. McCurdy s claims are typical of the claims of the class. 49. The violations alleged by McCurdy are the result of generally applicable policies or practices, and the common questions predominate over any individual questions in this action. 50. McCurdy believes and asserts that she is able to fairly and adequately represent and protect the interests of the class. 51. McCurdy has retained counsel experienced in handling class actions who will 7

8 fairly and adequately protect the interests of the class. 52. If individual actions were required to be brought by each of the similarly situated persons injured or affected, it would necessarily result in a multiplicity of lawsuits, creating a hardship to the individuals, the Arbitrator and Ala Carte. 53. A class action is a superior method for the fair and efficient adjudication of this lawsuit and distribution of the common fund to which the class is entitled. 54. Ala Carte violated the Illinois Minimum Wage Law by failing to compensate McCurdy and members of the class consistent with the minimum wage provisions. 55. Pursuant to 820 ILCS 105/12(a), affected employees are entitled to recover unpaid wages for three years prior to the filing of each employee s consent form in federal court, plus damages in the amount of 2% (two percent) per month of the amount of underpayment. WHEREFORE, McCurdy and the class pray for judgment against Ala Carte as follows: A. That the Arbitrator determine that this action may be maintained as a class action; B. Judgment in the amount of all back wages due as provided by the Illinois Minimum Wage Law; C. Prejudgment interest on the back wages in accordance with 815 ILCS 205/2; D. Damages of two-percent per month on unpaid wages under 820 ILCS 105/12(a); E. Reasonable attorneys fees and costs incurred in prosecuting this action as provided by the Illinois Minimum Wage Law; F. An injunction precluding Ala Carte from violating the Illinois Minimum Wage Law; and G. Such other and further relief as the Arbitrator deems just and proper. Dated this 25th day of November, Respectfully Submitted,

9 NICOLE MCCURDY By: /s/ Kenneth E. Kraus One of Claimant s Attorneys Kenneth E. Kraus Todd Flaming KrausFlaming LLC 20 South Clark Street Suite 2620 Chicago, Illinois (TEL) (FAX) ken@krausflaming.com 9

10 EXHIBIT A

11 Case: 1:12-cv Document #: 37-1 Filed: 10/29/12 Page 10 of 84 PageID #:130

14 EXHIBIT B

16 Case: 1:12-cv Document #: 63 Filed: 02/27/13 Page 2 of 2 PageID #:624 NOTICE OF CONSENT TO BECOME A PARTY PLATNTIFF IN A COLLECTIVE ACTION UNDER THE FAIR LABOR STANDARDS ACT By my signature below I represent to the Court that I have been employed by Ala Carte situated to myself. Name: Signature: Date: e/ zr/ro

17 Case: 1:12-cv Document #: 65 Filed: 03/07/13 Page 2 of 2 PageID #:627

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29 Case: 1:12-cv Document #: 50 Filed: 12/19/12 Page 2 of 2 PageID #:312 NOTICE OF CONSENT TO BECOME A PARTY PLAINTIFF IN A COLLECTIVE ACTION UNDER THE FAIR LABOR STANDARDS ACT By my signature below I represent to the Court that I have been employed by Ala Carte Entertainment, Inc. or its parents, subsidiary gr,afflliiated companiies, within the prior three (3) years and that I worked for Ala Carte from L/' 0 (month/year) through L/* & (month/year). I authorize through this Consent the filing and prosecution of this Fair Labor Standards Act action in my name and on behalf of all persons similarly situated to myself. Name: Signature: Date:

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