Employees at Café Corazón are suing the popular local Latin cuisine chain owners over a mandatory tip policy that distributes pooled tips to managers and supervisors they say violate federal labor laws against such practices, according to a complaint filed April 17.
The employees say managers kept a portion of the tips they earned as front-of-house employees, knowingly engaging in “tip theft.” The complaint was filed with the U.S. District Court for Wisconsin’s Eastern District, since it has original jurisdiction over Fair Labor Standards Act claims.
Four Café Corazón locations served Latin cuisine in Wisconsin. The first restaurant opened in Riverwest in 2009, according to the restaurant’s website. They later expanded to Bay View in 2016, Mequon in 2018 (though it closed in 2022) and Brown Deer in 2022.
The newest Cafe Corazon, 4102 W. Bradley Road, Brown Deer, opened in 2022. Employees of four locations have filed suit over a tip policy they say violate federal labor laws.
All have the same mandatory tip pool policy, per the complaint, where tips earned by front-of-house employees were recorded, pooled, and then redistributed based on hours worked.
However, managers and supervisors received a portion of those tips in violation of the Fair Labor Standards Act, according to the complaint.
All four locations are run by the same upper management, which included owners George and Wendy Mireles. The suit argues they were responsible for handling wages, tips, payroll records and timekeeping, meaning they should have reasonably known their actions violated the Fair Labor Standards Act.
The complaint requested the following: designation allowing for the inclusion of additional plaintiffs, an order acknowledging the tip pool violated federal labor law and repayment of both the lost tip money given to managers and legal costs associated with the case.
An employee at the Riverwest location said the business declined to comment at this time. John Germanotta, the registered agent for the legal entities associated with all Café Corazón locations, could not be reached for comment.
Contact Claudia Levens at clevens@gannett.com. Follow her on X at @levensc13.
This article originally appeared on Milwaukee Journal Sentinel: Cafe Corazon employees sue over tip pooling policy that included managers