Shuttered New York restaurant Alto on Tuesday agreed to pay $300,000 to settle with a class of employees who accused the high-end eatery of tip misappropriation and failing to pay minimum wage in violation of state and federal labor laws.  Attorneys for the plaintiffs filed a motion in New York federal court seeking preliminary approval of the settlement and certification of a class for the state law claims composed of all individuals who worked at Alto as captains, assistants, runners, and bussers at any time from the date Alto opened in May 2005 through the restaurant's closing on March 4.

When the plaintiffs lodged their suit in August against Alto, the restaurant's owner Chris Cannon and Cannon's restaurant group Altamarea Group LLC, it was one of a slew of cases targeting upscale New York restaurants for alleged labor violations. The suit claimed that Alto's pay practices violated not only the Fair Labor Standards Act but also New York labor law.  “The $300,000 settlement amount represents a good value given the attendant risks of litigation and the collection risks ... even though the recovery could be greater if plaintiffs succeeded on all claims at trial and survived an appeal,” the plaintiffs said in a memorandum filed in support of the proposed settlement.

The lawsuit accused Alto of numerous violations, including forcing its waitstaff to share tips with ineligible workers, such as Alto's general manager; taking tip credits and paying less than the minimum wage; denying its waitstaff spread of hours pay; and requiring workers to buy and launder their own uniforms. After the court conditionally certified the case as a collective action for the FLSA claims in December, 22 employees opted in to the class, while the proposed opt-out class for the state law claims includes about 119 members, according to the memorandum. (click on link to read full story)