unions

The contract bars them from a class action suit specifically (if I’m reading this correctly) which means that a big law firm or group of firms are not likely to take the case.

This is a big issue with wage theft because the people affected have so little on the line as individuals. If a Waffle House server works half their 8 hour shift doing non-tipped work at the tipped wage ($2.13/hr) rather than the federal minimum wage ($7.25/hr) 5 days a week, 50 weeks a year, for 10 years, they’re out $51200. Given the cost of litigation, they would owe a lawyer even if they won.

So, Waffle House can’t completely ban lawsuits but they can make them untenable, and the cost to them is not important. Let’s say our hypothetical employee does find a lawyer who takes the case and does file suit. WH will settle, probably offer half (if that) with a non-disclosure agreement attached to it. They may even have in-house counsel who can handle that as part of their day to day work so it’s no extra expense. The employee feels good because they got something reasonably quick, and they can’t tell anyone else so it stops there. WH gets away for ~$25k.

Compare that to a class action. A law firm has reasonable evidence of the behavior being company wide, so they start sending out mailers and posting ads on social media. “Were you employed as a server by Waffle House between 2000 and 2024? You may be entitled to back pay.” Now anyone who ever filed a tax return with a W-2 from WH might be signing up. Now WH does have to bring in their outside counsel who charges by the hour. Simply to respond to the case at all, they are spending tens of thousands of dollars. There are probably tens of thousands of people who worked at WH in the given time period, so now they’re looking at millions of dollars in a payout plus their legal expenses plus (maybe) the legal expenses of the plaintiffs.