Angry Crab Shack Employees Sue Mesa Seafood Chain for Wage Theft

Angry Crab Shack's location in Phoenix on Indian School Road.
Angry Crab Shack's location in Phoenix on Indian School Road. Joseph Flaherty
The crabs are angry, and so are the employees.

A group of servers at Mesa-based seafood restaurant Angry Crab Shack are suing the company after the restaurant allegedly withheld tips, reducing their earnings to less than minimum wage.

The four employees claim in a July complaint filed in Arizona U.S. District Court that the Cajun seafood company violated the Fair Labor Standards Act.

It's the second labor lawsuit filed by employees of Angry Crab Shack in less than two years.

Last May, the company settled a nearly identical wage-theft case for a six-digit sum. But according to the new complaint, during that collective action lawsuit, the company's managers and supervisors "actively discouraged" other employees from opting in to the suit.

Angry Crab Shack wait staff earned less than minimum wage because of a $3 per hour tip credit the restaurant subtracted from their pay, the complaint said. That's a regular practice at restaurants that employ staff earning tips.

Yet Angry Crab Shack required servers and bartenders to pool their tips after each shift and then divided the money among tipped staff and non-tipped, back-of-house employees such as managers, cooks, and dishwashers, the complaint said. The result was that Angry Crab Shack wait staff and bartenders earned less than the applicable Arizona minimum wage during both regular hours and overtime.

Angry Crab Shack also required employees to contribute one dollar from their tips during each shift they worked to a collective fund entirely controlled by management, the complaint said. Employees could “'borrow' from this collective fund on an as-needed basis," but any employee who borrowed had to "promptly reimburse the fund."

Through the lawsuit, the servers hope to recoup unpaid wages, attorneys' fees, and liquidated damages.

All four plaintiffs – Servando Alarcon, Gregory Garcia, Freya O'Keefe, and Mary Pineda – started work at the Angry Crab Shack restaurant in Phoenix on Indian School Road between 2014 and 2016. Two still worked there as of July.

The complaint seeks a collective action certification that would include all other Angry Crab Shack servers and bartenders who lost wages as a result of the company's alleged practices.

The chain of casual restaurants serves bag-boiled shellfish along with spicy sauces. Angry Crab Shack has seven restaurants in Arizona, six corporate-owned and one franchise. They include locations in Mesa, Peoria, Goodyear, Phoenix, and Tucson.

Requests for comment to Angry Crab Shack's corporate headquarters were not returned.

The corporate headquarters in Mesa is preparing for a rapid nationwide expansion over the next five years. On Monday, Angry Crab Shack announced plans to add five new locations in Arizona by 2019 for a total of 100 locations by 2023.

In a news release announcing the expansion, founder Ron Lou touted his restaurant chain as a great franchise opportunity "due to our low operating costs and high return on investment."

The lawsuit names Lou and several other Angry Crab Shack owners as defendants.

Attorneys Clifford and Christopher Bendau of the local Bendau Law Firm are representing the servers. Clifford Bendau declined to comment to Phoenix New Times on Tuesday, saying that it was not in his clients’ best interests to speak about the case.

The Bendau Law Firm previously sued Angry Crab Shack during the 2016 case on behalf of several other servers after they, too, claimed that the restaurant pooled tips, resulting in lost wages. In a settlement approved by a judge in May, Angry Crab Shack agreed to pay a total of $185,000.

Yet Angry Crab Shack managers and supervisory personnel allegedly tried to limit the number of participants in that previous collective action. The new filing says that the fresh group of plaintiffs had held back from the previous action "ostensibly out of fear of retaliation for joining."
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Joseph Flaherty is a staff writer at New Times. Originally from Wisconsin, he is a graduate of Middlebury College and Columbia University’s Graduate School of Journalism.
Contact: Joseph Flaherty