Pretty sure if the law is being broken you can still sue, otherwise corpos would just put that in contracts.
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.
They’re out $51,200.
Nope, they’re not. Federal employment law requires that anyone who doesn’t reach minimum wage when making tipped wages must be paid the difference by their employer. https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
These workers are making minimum wage either way, assuming there’s no actual wage theft going on here (which there of course could be).
The actual reason this is bullshit is that their tips from the part of their job that is tipped labor are now going toward time that isn’t tipped labor, meaning that they have a much lower chance of ever making above minimum wage in their tipped hours from the tips that receive.
The problem is, I don’t believe it’s at a minute-by-minute level of granularity. If you’re working several hours a day at tipped minimum, and the rest making well above minimum after tips, repeat the above daily and average at minimum wage for the pay period… That’s good enough.
They can’t stop you from filing the suit, but they can stop you from being employed with them if you do.
Frankly, I think that’s fucking bullshit and proper litigation of issues should be a right, like speech. None of this “employment contract says no suits”, “EULA forces arbitration using arbitrators of our choosing” bullshit