• Curbside Service to a Lawsuit
  • June 26, 2009 | Author: Stanford G. Wilson
  • Law Firm: Elarbee, Thompson, Sapp & Wilson, LLP - Atlanta Office
  • To give a few dollars or not--that is the question asked by satisfied patrons when exiting their favorite gourmet eatery and awaiting the “complimentary” curbside arrival of their car. Unbeknownst to the customer, both the restaurant and the valet service could have significant and potentially expensive legal obligations to the valet driver. Indeed, those same valet drivers are now increasingly filing complaints with departments of labor and in court to recover wages.

    It is an almost universally accepted practice that valet drivers are treated by restaurants, or the valet companies to whom the restaurant has outsourced the service, as independent contractors. These individuals will then work for most of the tips received from patrons (or all tips less a “charge” for each car parked), and they may earn a significant income by doing so. While this may seem normal, as it was the industry standard for many years, restaurants and valet providers which use this structure likely are violating the Fair Labor Standards Act (“FLSA”).

    First and foremost, no matter how valet companies structure their relationship with the parking attendants, such individuals usually are employees of the valet company, not independent contractors. If the parking attendants are deemed employees, not independent contractors, the FLSA requires payment of minimum wages and overtime. Restaurateurs should take heed of how the valet service pays its drivers, as there is a strong argument that you are joint-employers of the parking attendants with the contracted valet company and may be responsible for unpaid wages to the valets.

    Plaintiffs’ attorneys are salivating over this unappetizing trend in states like Florida, Texas and Arizona. American Valet and Limousine Inc., located in Phoenix, paid approximately $80,000 in penalties after the Department of Labor accused the company of willful violations of both the minimum wage and overtime provisions of the FLSA. Five Star Valet Inc., which provides valet service to restaurants in Houston, agreed to pay current and former valet service workers to resolve violations of the overtime provisions of the FLSA. In December 2008, three valet companies were sued for unpaid wages in a Florida federal court because the valets were treated as independent contractors and did not receive all wages required by the FLSA. A similar lawsuit was filed against three different valet companies in the same Federal court in January, 2009.

    This trend is moving toward Georgia and the Carolinas; therefore, it is critical for valet companies and restaurants to make changes now to ensure parking attendants are paid in accordance with the FLSA, as the failure to do so can have burdensome and costly consequences. To avoid these issues, many valet companies are implementing a small parking fee for each car, which normally covers the valet company’s overhead and the wages of $2.13 per hour for the valets ($4.42 for each hour over 40 in a workweek, rising to $5.12 as of July 24, 2009). The valets should be allowed to retain all tips voluntarily paid by customers in addition to the established parking fee. This is a very general description of the law and potential solutions to the issues presented by valet parking.