Topgolf settles class action lawsuit that began in Spring, Texas

Topgolf will settle with workers in response to a class action lawsuit alleging the international restaurant and entertainment company induced managers at its U.S. locations to pay employees less than the federal minimum wage for untipped labor.

First reported by Dom DiFurio of The Dallas Morning News, the case began with a lawsuit filed in Texas federal court in 2020 by two former employees of the company in Spring, Texas. The lawsuit alleged that the company used provisions of the Fair Labor Standards Act which allows restaurants and bars to pay staff $2.13, below the national minimum wage of $7.25, because receiving tips throughout the working day.

The lawsuit has since been joined by thousands of Topgolf employees across the country, claiming the company manipulated this FLSA loophole by not telling employees they worked for tips and forcing workers to spend money. time doing untipped work such as cleaning and disinfecting. He claims that Topgolf uses software that would allow the company to differentiate between these different tasks and raise pay to $7.25 for time spent performing work without tipping, but the feature has never been used. to award appropriate compensation levels.

Topgolf has denied those charges and will settle an undisclosed amount with the workers involved in the lawsuit. The complaint, according to DiFurio, sought to recover untipped labor wages from employees at $7.25 an hour.

“[Topgolf] managers were eligible to receive bonuses, in part, based on meeting or exceeding certain labor cost targets, which created an incentive to keep the amount paid to tipped employees low “, indicates the complaint.

Topgolf, owned by Callaway Golf Company, has been the subject of several high-profile lawsuits in recent years. In 2021, Top Golf was forced to pay $750,000 in back wages to employees in 25 US states for unpaid overtime. The company allegedly elevated employees to management positions without commensurate pay increases and provided no compensation for time worked beyond 40 hours per week.

“Employers cannot escape federal overtime requirements by simply giving an employee a managerial title,” Betty Campbell, regional wage and hour administrator for the U.S. Department of Labor, said after the ruling. “This case should serve as a clear warning and inspire other employers to review their compensation practices. Employers who are unsure of their obligations should contact their local district wage and hour office or visit our website for guidance on how to comply with federal law.”

Topgolf also paid $2.6 million in 2021 to end a 2017 class action lawsuit filed by Illinois Topgolf employees for violations of the state’s biometric information protection law. The complaint alleged that the company violated state laws by requiring employees to enter and exit using their fingerprints without obtaining proper written consent from workers and by failing to disclose how their data would be used and stored.

In fiscal 2021 financial reports, Callaway reported more than $1 billion in revenue from its Topgolf properties.