Iron Cactus is Getting Served: With a Class Action Lawsuit


Caption: Food expos (expediters) generally are responsible for checking a food ticket, making sure the food comes out of the kitchen correctly (for example if the ticket says “no cheese”, they’ll make sure there’s no cheese), getting the food ready for a waiter to take out to their table, and, at some places, actually running the food out to the table, themselves. Expos are different at every restaurant, all with different levels of responsibilities and customer interaction.

When I first moved to Austin, I applied at basically every bar on 6^th^. I came close to getting hired at one place – but then the manager’s friend ended up getting the job. Just as I was beginning to think that until I knew the right people, I would never get to bartend again, Iron Cactus called me for an interview. I was glad that the search could finally be over, but they weren’t hiring a bartender, they were looking for servers. I wasn’t exactly over-the-moon about going back to waiting tables. Besides the fact that it’s a position I thought I’d graduated years before, carrying heavy food trays + scoliosis + a severe lower back injury was pretty unappealing. But I figured, what the hell, at the last Mexican restaurant I waited tables for, I was promoted to the bar after only a few months. I went in for my interview, nailed it, and started training a couple of days later.

After I got hired, the first order of business was buying my uniform. The black slacks, all black shoes and black socks, I already had. My new purchases were an Iron Cactus t-shirt (purchased from Iron Cactus for about $15), a short black apron (also purchased from Iron Cactus for about $12 – I already had a short black apron, but it wasn’t identical to the one they wanted me to wear), and about 15 black pens that click-open and have a clip on the side. Basically, before I could even start my training and orientation, I had to spend a little over thirty dollars – most of it atthe restaurant itself.

Orientation dragged. It turned out that I wasn’t the only new person that got hired. There were about ten of us. The first day was like five hours long. Afterward, the new people all got to share some Iron Cactus food. It was all covered in cheese and I can’t eat dairy, so I didn’t really eat anything. The orientation process lasted for about a week. The first day we went over the employee handbook. Then, the rest of the week we had class. I’m not joking. I don’t remember if they called it “class,” but that’s what it was. My class was taught by a waiter that had worked at Iron Cactus for about five years. We had to memorize the ingredients in every dish and all the drinks. At the beginning of each day, we would take a written exam on the previous day’s section. If you missed too many ingredients or a step in serving protocol, you had like one or two days to study and re-take the test. I remember going home and studying, thinking, “how the hell did I end up in school again? I started working in restaurants insteadof getting an education…” Each day was more excruciatingly boring than the last, and it was hard to escape the feeling that I had somehow ended up back in high school. After a couple of days, I started to think that everyone around me was probably sleeping together. All of the servers flirted with the managers. All of the managers had big-time favorites.

My first Friday consisted of a morning class, followed by a night of “following” a waiter around. He was supposed to be showing me how to use the computer system and let me practice, but I ended up just being his bitch all night and waiting most of his tables for him. At the end of our shift he showed me how to do the money. We waited in line for the calculator (we’re both off the clock at this point), he calculated the tips that he was required to tip-out (hostess, bartender, busser and expo), we went into the office to turn in the money to a manager, and then we left. Some of my fellow trainees were excited because their servers tipped them out. Mine didn’t.

I knew that if I waited it out at Iron Cactus, played favorite with a manager, and was promoted to bartender, I’d be making a couple hundred dollars a night. But I just couldn’t stand it, so I walked out the next day. I haven’t had contact with Iron Cactus since, so, I was surprised when I recently got some mail with Iron Cactus’ name on it. As a lot of you probably know by now, they’re being sued. Too bad I didn’t stick with it long enough to actually wait tables, or maybe I’d be eligible to profit from this situation.

So, the reason they’re getting sued… I already mentioned it, though I doubt anyone picked up on what it was. I’ve had enough friends in the service industry here to know that what Iron Cactus is being sued for, while being totally illegal, is common practice. Believe it or not, Iron Cactus made the same mistake that Thai Fresh made a few short months ago (see our May issue). What law did these businesses get caught breaking? Really it comes down to the main reason people wait tables in the first place: tips. Though more specifically, this lawsuit revolves around tip credit and tip pooling.

A tip credit is what businesses in Texas and other states use to pay their employees, less than the federal minimum wage. In Texas, the tip credit is $5.12. That means that employers can use tips that their servers, bartenders, baristas, counter people, etc., make to compensate for up to $5.12 of their minimum hourly wage. The remaining $2.13 per hour is inescapable – dang! The only exception to the tip credit law is that in the event that an employee does not make $7.25 per hour, with their tips and hourly wage combined. In this case the business is responsible for paying that employee the difference. In order for an employee to be eligible for a tip credit, they have to “customarily and regularly” make at least $30 per month in tips. Texas doesn’t have its own wage laws so we follow the federal laws.

The tip credit laws are very clear about who is eligible to be included, and tip pooling laws are just as strict. A mandatory tip pool, a system in which employees share part of their tips with coworkers, is legal in Texas, as long as it’s done right. In order to be done legally, only people who normally receive tipscan be included in a tip pool. The law further states that the percentage of tips to be shared with other employees must be “customary and reasonable,” basically the industry standard. Obviously, waiters can legally be required to tip out a reasonable percentage of their tips to bussers, hostesses and bartenders. It is illegal however for back of house employees like cooks and dishwashers to be included in a tip pool. Cooks and dishwashers do not have interaction with customers and therefore do not generally receive tips.

The law is explicit when it comes to employees like dishwashers, janitors and cooks, but becomes more vague with other positions like food expeditors or back-waiters. Let’s say for example that you go out to eat at a sushi restaurant and sit at the sushi bar. While your sushi chef may not actually and verbally take your order, preparing your food in front of you is a means of interaction. Also, it is commonplace to tip your sushi chef (basically every sushi chef has their own tip jar). So, while the person preparing your sushi is in fact a cook, they would usually be eligible to take part in a tip pool. They regularly and customarily receive their own tips.

The food expos at Iron Cactus were responsible for getting trays of food ready to be carried out by the servers. This meant working with the cooks to check each tray and corresponding food ticket to make sure that there were no mistakes. The expos at Iron Cactus never left the kitchen. Sure, they were helping the servers take care of customers, but loosely speaking, so are the cooks. Expos at Iron Cactus don’t actually ever seea customer, they never talk to them, and most customers probably don’t even know that they are there. It seems painfully obvious that they shouldn’t be included in a tip pool.

What I want to know is how Iron Cactus got away with requiring an illegal tip pool for over 16 years (assuming this went on the whole time). I think I can guess at an answer: everywhere does it. Literally every restaurant big enough to require an expo requires them to get tipped out. Because it’s so common, servers don’t seem to know it’s illegal, or care. And maybe when they do, they’re afraid of getting in trouble or, like my friend at Thai Fresh, fired. You would think that the possibility of a huge lawsuit would be incentive enough to pay your expo more so as to not rely on tips, but lots of businesses prove every day that they’d rather pay the consequences than do things right in the first place. I think the financial repercussions of this lawsuit are likely to put Iron Cactus out of business—when they lose.

Iron Cactus is getting hit with a class-action lawsuit. Basically two guys, Joshua Covey and Jacob Hinojosa, with the help of Kennedy Hodges LLP (law firm), are suing their former employer for the illegal tip pool they were forced into. Anyone who worked as a server at Iron Cactus in the last three years (since February 2009) is allowed to be a part of this. If they win (and I’m about 112 % sure they will), then Iron Cactus will have to pay back the tip credit they used, for every hour that every plaintiff worked in the last three years. A business loses their right to use a tip credit when forcing employees into an illegal tip pool. On top of having to pay back all of the difference in minimum wages, Iron Cactus will also be responsible for compensating all over-time worked in the past three years with standard time and half pay.

This lawsuit will take time, but I’m positive that it won’t be the last that we see of its kind. A lot of law firms are realizing that there is big money in helping to defend servers’ rights. And maybe servers in this town are finally ready to stick up for themselves. This situation really boils down to one basic problem: the ability for restaurants to even use a tip credit in the first place. By allowing a business to pay some of their employees with tips, the line between tips and wages become irreversibly blurred. Servers sticking up for themselves with some knowledgeable legal support is the first step in the right direction towards making a decent hourly wage. So, good for you Joshua and Jacob, and anyone else willing to stick it to the rich pieces of shit that couldn’t afford to pay their own staff. I hope you clean ‘em out.


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