Settlements and Releases: SINGLETON V. BRAVO DEVELOPMENT INC. (COA 9/21/2007)

SINGLETON V. BRAVO DEVELOPMENT INC.
SETTLEMENTS AND RELEASES: 

2006-CA-002163
PUBLISHED: VACATING AND REMANDING
PANEL: ROSENBLUM PRESIDING; MOORE AND STUMBO CONCUR
CAMPBELL COUNTY
DATE RENDERED: 09/21/2007

[CONDENSED SUMMARY: CA vacates and remands dismissal of this class action suit for a restaurant’s unlawful practice of "tipping out."  CA holds that the settlement and release, on its face, pertained only to damages under KRS 337.065, not 337.385. Also, the doctrines of exhaustion of administrative remedies and election of remedies do not apply to this case.]

CA vacates and remands dismissal of this class action suit for a restaurant’s unlawful practice of "tipping out."

In August 2003, appellant began working as a server at Bravo Development Inc., d/b/a Brio Tuscan Grille in Newport, Kentucky. Servers were required to remit back to the restaurant 3% of their sales. This is called "tipping out" and is unlawful pursuant to KRS 337.065. Appellant complained; management refused to correct the practice. Appellant filed a DOL complaint; DOL investigated and confirmed the unlawful practice. Bravo made an offer of settlement for back wages; appellant rejected it and filed this class action. A reaudit confirmed that Bravo’s offer of settlement was too low as significantly more had been withheld from the servers in violation of KRS 337.065. Revised offers were made; appellant accepted. Bravo then sought dismissal of the class action for failure to exhaust administrative remedies; dismissal was granted. The complaint was again prosecuted, seeking liquidated damages and attorney fees under KRS 337.385. This complaint was dismissed on the grounds that appellant had settled his claim and he had failed to exhaust administrative remedies.
CA holds that the settlement and release, on its face, pertained only to damages under KRS 337.065, not 337.385. Also, the doctrines of exhaustion of administrative remedies and election of remedies do not apply to this case.
Digested by John E. Hamlet

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