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

Background

One Fair Wage, Inc. (OFW) sued Darden Restaurants Inc. under Title VII, alleging that two Darden policies caused sex- and race-based employment discrimination. The first, called the cash-wage policy, allegedly required managers to pay tipped employees the lowest legally permitted cash wage. OFW alleged that this increased sexual harassment by managers, coworkers, and customers. The second, called the tipping policy, allegedly encouraged and facilitated tipping without safeguards against racial bias, resulting in lower tips for racial and ethnic minority employees and less favorable shifts and sections for some employees of color.

The court had previously dismissed OFW’s first amended complaint for lack of Article III standing, which is the constitutional requirement that a plaintiff show a concrete injury connected to the defendant’s conduct and likely to be addressed by a court order. The court allowed OFW to amend. In its second amended complaint, OFW alleged that Darden’s policies prevented employees from spending non-work time assisting OFW’s advocacy efforts and forced OFW to divert resources to help workers dealing with harassment and race-based earnings differences. OFW gave two concrete examples involving Darden workers, Jillian Melton and Zain Youssef.

Darden again moved to dismiss, arguing that OFW lacked Article III standing and statutory standing under Title VII. Statutory standing concerns whether a particular plaintiff is authorized by the statute to bring the claim.

Article III Standing

The court treated Darden’s Article III challenge as a facial challenge because Darden did not provide evidence supporting its factual challenge. At that stage, the court considered whether OFW had adequately alleged facts showing jurisdiction.

The court held that OFW sufficiently alleged an injury in fact. OFW claimed that Darden’s policies deprived it of employee voices it used in advocacy and required it to divert resources from lobbying and advocacy to providing services to affected workers, including connecting workers with attorneys, therapists, and other service providers and providing financial assistance. The court found that OFW’s allegations, including the examples involving Melton and Youssef, addressed the deficiency identified in the earlier complaint.

The court also held that OFW adequately alleged traceability, meaning a plausible connection between Darden’s policies and OFW’s alleged injury. The court found plausible OFW’s allegations that the cash-wage policy contributed to sexual harassment by customers, managers, and coworkers, and that Darden’s tipping policy contributed to race-based tip differences through customer tipping and manager assignment decisions. The court further concluded that redressability—the likelihood that a court order could address the injury—was not a problem at this stage.

Statutory Standing

The court reinstated its prior ruling that OFW lacked statutory standing to pursue the Title VII claims. The court had previously reasoned that OFW, a non-employee advocacy organization, had not identified authority allowing it to challenge an employment practice based on an injury that was ideological or derived from injuries suffered by employees. The court also had expressed concern that OFW’s theory could bypass the procedural protections that apply to class actions.

Disposition

The court denied Darden’s motion to dismiss for lack of Article III standing. It granted the motion in part based on OFW’s lack of statutory standing, concluding that dismissal of the case was appropriate on that ground. The court temporarily deferred entry of final judgment in Darden’s favor because OFW indicated that it might seek reconsideration of the prior statutory-standing ruling. OFW was given three weeks to file a motion seeking permission to request reconsideration or to state that it would not do so. The order states that, if OFW did not file such a motion, the court would enter final judgment. The order disposed of Docket No. 59.