One Fair Wage, Inc. v. Darden Restaurants Inc.

Background

One Fair Wage, Inc. (OFW), an advocacy organization, sued Darden Restaurants Inc. OFW alleged that two Darden policies violated Title VII of the Civil Rights Act of 1964: (1) a cash-wage policy for tipped employees and (2) an unmediated tipping policy.

OFW alleged that Darden’s cash-wage policy paid tipped employees the lowest legally permitted cash wage in the state or municipality where they worked. OFW claimed this increased employees’ dependence on customer tips and led to more sexual harassment. OFW also alleged that Darden’s tipping practices caused employees of color to receive less in tips than white employees and contributed to race-based pay disparities.

OFW did not bring the lawsuit on behalf of any Darden employee. Instead, it claimed that Darden’s policies injured OFW itself by forcing it to divert resources to help affected employees. OFW said this assistance included connecting workers with attorneys, therapists, and social-service providers; offering job opportunities; administering payments from an emergency relief fund; and conducting a survey. OFW argued that these efforts were necessary because affected employees had less time to participate in OFW’s lobbying and advocacy work.

Darden moved to dismiss under Rule 12(b)(1), arguing that OFW lacked Article III standing. Article III standing requires a plaintiff to show an injury in fact, a connection between the injury and the defendant’s conduct, and a likelihood that a court decision can remedy the injury.

Procedural History

The court had previously dismissed OFW’s suit on the ground that its claims fell outside Title VII’s protected legal interests, without deciding whether OFW had constitutional standing. The Ninth Circuit vacated that order and sent the case back, explaining that a court must determine its constitutional jurisdiction before reaching statutory issues. OFW then filed a First Amended Complaint with additional allegations intended to establish standing.

Court’s Analysis

The court recognized that an organization may establish standing by showing that the defendant frustrated its organizational mission and that the organization diverted resources to address that frustration. But an organization cannot create an injury merely by choosing to spend money addressing a problem that otherwise would not affect it. It must show that it would have suffered another injury if it had not diverted its resources.

The court concluded that OFW had not alleged a sufficiently direct connection between Darden’s alleged treatment of its employees and an injury to OFW. Unlike organizations whose missions directly involve providing services to people affected by the challenged conduct, OFW’s mission was lobbying and advocacy. OFW’s claimed loss of employee voices depended on the assumption that Darden employees would have participated in OFW’s lobbying efforts but for Darden’s policies.

The court found that OFW had not identified a single employee who sought to lobby on OFW’s behalf but was prevented from doing so because of Darden’s policies. The court therefore viewed the alleged causal chain as hypothetical, tenuous, and unsupported by specific allegations or evidence. For the same reason, it was speculative whether an order against Darden would restore the employee participation OFW claimed to have lost.

Disposition

The court granted Darden’s Rule 12(b)(1) motion to dismiss OFW’s complaint for lack of standing without prejudice. OFW was given 30 days from the order to file an amended complaint that sufficiently alleged a connection between the injury to Darden employees and OFW’s organizational injury. The order stated that if OFW failed to do so, the case would be dismissed with prejudice. The order disposed of Docket No. 44.