Julie Su Acting United States Secretary of Labor | Official Website
A federal lawsuit has resulted in the recovery of $178,000 in back wages, damages, and penalties from Hall Drive-Ins Inc., an operator of 10 Fort Wayne-area restaurants. This resolution addresses U.S. Department of Labor litigation filed in 2023 concerning violations of tip-pool requirements under the Fair Labor Standards Act (FLSA).
The consent judgment and order, entered on September 4, 2024, by the U.S. District Court for the Northern District of Indiana in Fort Wayne, mandates that The Factory Restaurant and Luke Hall pay $74,626 in back wages and an equal amount in liquidated damages to 28 employees. Additionally, they are required to pay $28,748 in civil money penalties assessed by the department.
As part of the settlement, all managers at Hall Drive-Ins’ other restaurants have been trained on federal wage laws pertinent to the restaurant industry. The Factory Restaurant will also provide employees with fact sheets detailing their FLSA rights specific to wage laws for restaurant workers.
An investigation by the Wage and Hour Division found that Hall applied a federal tip credit allowing him to pay servers hourly cash wages below minimum wage while relying on tips to cover the difference. However, this credit was invalidated due to an illegal tip pool requiring servers to share tips with non-tipped kitchen staff and failing to inform servers about the application of the federal tip credit.
The department's lawsuit filed in July 2023 alleged that employers violated FLSA regulations by operating an illegal tip pool and not maintaining accurate wage records. It also claimed that Luke Hall and The Factory Restaurant failed to meet federal minimum wage standards due to deductions for mandatory uniforms and requiring unpaid pre-shift work.
“The specific rules for the use of tip pools mandate that restaurant employers using the federal tip credit can only legally include employees who customarily and regularly receive tips in mandatory tip pools,” explained Wage and Hour Division District Director Aaron Loomis in Indianapolis. “The court’s action helps the U.S. Department of Labor restore these workers their rightfully earned wages after The Factory Restaurant and Luke Hall refused to pay them even though the Wage and Hour Division’s investigation led them to change their business practices immediately to comply with law.”
Regional Solicitor of Labor Christine Z. Heri added from Chicago: “The resolution of this court case should remind employers that employees must be paid for all work they do, even if they aren’t clocked in.” She emphasized how this outcome demonstrates the department's commitment to fighting for workers' rights and holding employers accountable under federal law.
One establishment among several owned by Hall Drive-Ins Inc., The Factory Restaurant was founded in 1972 as part of a larger enterprise initiated by Don Hall. Other establishments include The Deck, The Gas House, Hall’s Hollywood, Takaoka of Japan, The Tavern at Triangle Park in Fort Wayne; Hall’s Prime Rib Restaurant; Tap Haus; and Hall’s Commissary.
Further information about wage laws can be found through the department’s Restaurant Employment Toolkit or by contacting their toll-free helpline at 866-4US-WAGE (487-9243). A new Timesheet App is available for iOS and Android devices ensuring accurate tracking of hours worked.
DOL v. Hall Drive-Ins Inc., d/b/a Factory Restaurant
Civil Action No.: 1:23-cv-211-GSL
