What It Actually Feels Like to Be a Tipped Worker at Cracker Barrel

Before this becomes a story about circuit courts and jurisdictional doctrines, understand what tipped wage theft looks like on the ground. You show up before the breakfast rush. You’re on your feet for six hours. The dining room fills with families on road trips. You refill coffee until your wrist aches. You smile at every table, absorb every complaint about wait times, and hustle through a shift that your body will remember tomorrow.

Under federal law, your employer is legally allowed to pay you as little as $2.13 an hour, on the assumption that customer tips will bridge the gap to the federal minimum wage of $7.25. This is called the “tip credit.” The employer takes a credit against what they owe you, betting that strangers will be generous enough to make up the difference. In practice, this system puts the burden of your paycheck on the public, not on the corporation that profits from your labor every single day.

But that credit comes with rules. The law is specific about when employers can and cannot use it. If those rules are violated, the employer owes the full minimum wage, no credit applied. The workers in this case alleged that Cracker Barrel crossed those lines.

When you discover your wages were miscalculated, your first instinct might be to do something about it. You look into suing. Then you find out that when you completed your onboarding training online, buried inside the same platform where you learned how to roll silverware, you clicked through an agreement to resolve any workplace disputes through private arbitration rather than in a court of law. You may not have known what that meant. You may not have read it. You may have been told to get through the training quickly before your shift. It does not matter. Cracker Barrel will argue that you waived your right to sue.

And if you do find other workers who want to fight alongside you, as federal law explicitly allows, this ruling now means that a lawsuit filed in Arizona cannot automatically include workers from Florida, Tennessee, Texas, or the other states where Cracker Barrel operates. The company’s legal team can argue that each of those workers has to find their own venue, their own lawyer, their own path to accountability. For a server making $2.13 an hour plus tips, that cost is prohibitive. That is the point.

The three named plaintiffs in this case, Andrew Harrington, Katie Liammaytry, and Jason Lenchert, along with Dylan Basch, put their names on a federal lawsuit against one of the most recognizable restaurant brands in America. That takes courage. The ruling they received is a mixed verdict that confirms the fight is real but makes the road ahead harder for every tipped worker in the country who comes after them.

What the Court Documents Say, Word for Word

These are direct quotes from the Ninth Circuit’s published opinion in Harrington v. Cracker Barrel Old Country Store, Inc., Nos. 23-15650 and 24-1979, filed July 1, 2025. Nothing here is paraphrased.

“A group of current and former employees (‘Plaintiffs’) of Cracker Barrel Old Country Store, Inc. (‘Cracker Barrel’) filed the underlying lawsuit alleging that Cracker Barrel violated the FLSA in connection with its use of tip credits and wages for tipped employees.”

• This is the court confirming the core allegation: Cracker Barrel’s tip credit practices are the reason this lawsuit exists. The FLSA is the primary federal wage law protecting most American workers.
• The use of “tip credits” is a legally defined mechanism. If Cracker Barrel applied it incorrectly, workers were paid less than the federal minimum wage they were legally owed.

“Plaintiffs are current and former employees of Cracker Barrel who are not subject to the arbitration agreement that Cracker Barrel routinely presents to its employees through an online training program.”

• The court confirms that Cracker Barrel has an arbitration agreement it presents to employees through an online training program. This is not a document workers negotiate. It is embedded in required job training.
• The word “routinely” is significant. This is a systematic, company-wide practice, not an isolated policy at one location.
• The named plaintiffs in this case were those who fell outside the arbitration agreement. The court separately affirmed the denial of Cracker Barrel’s attempt to compel arbitration against plaintiff Dylan Basch specifically.

“Because questions of fact persisted as to which prospective plaintiffs were bound by Cracker Barrel’s arbitration agreement, the district court decided to reserve judgment on that issue until the second stage of proceedings.”

• Even the trial court could not immediately determine which workers were legally trapped by the arbitration clause and which were not. The agreements are fact-specific enough that a full evidentiary process is required.
• This ambiguity itself reflects how these agreements work in practice: employees are told they have agreed to something, but the legal enforceability of that agreement requires significant legal work to establish or challenge.

“The FLSA collective mechanism ‘is more accurately described as a kind of mass action, in which aggrieved workers act as a collective of individual plaintiffs with individual cases.'”

• This characterization, which the court uses to justify applying the Bristol-Myers jurisdictional standard, frames each worker as an individual plaintiff rather than as part of a unified group. That framing has direct consequences: it means each worker’s claim must independently connect to the state where the lawsuit is filed.
• By defining the collective as a mass of individuals rather than a representative class, the court closes the door to using one Arizona worker’s valid claim as the basis for drawing in workers from every other state Cracker Barrel operates in.

“Because the district court authorized nationwide notice on the mistaken assumption that it would not need to assess specific personal jurisdiction on a claim-by-claim basis, we vacate and remand for further proceedings consistent with this opinion.”

• The Ninth Circuit overturned the lower court’s decision to send notice to all potential plaintiffs nationwide. The case is sent back to the district court to redo its analysis.
• Workers across the country who might have joined this case now face an additional legal hurdle before they can even receive notice that a lawsuit exists that they may be eligible to join.

“We have long held that ‘[p]ersonal jurisdiction must exist for each claim asserted against a defendant.’ Nothing in the text of the FLSA or the nature of the collective action suggests that the framework for the court’s personal jurisdiction analysis changes between the original plaintiff’s claims and opt-in plaintiffs’ claims.”

• The court is saying: the rules that apply to the original plaintiff also apply to every worker who tries to join. There is no legal shortcut that allows one worker’s local connection to stand in for another worker’s lack of connection to the same state.
• For corporations that operate in dozens of states, this ruling is a gift. It means a wage theft case filed in one state cannot easily absorb workers from other states, even if those workers experienced the exact same illegal practice.

The Damage Beyond This Courtroom

Public Health

Wage theft from tipped workers creates cascading health consequences that remain invisible in corporate earnings calls but show up in emergency rooms, food bank lines, and missed medical appointments.

• Workers relying on a base wage as low as $2.13 an hour have almost zero financial cushion. A single unpaid or underpaid shift can mean choosing between groceries and a utility bill. That is chronic financial stress, and chronic financial stress is a documented driver of hypertension, depression, and anxiety disorders.
• Tipped workers frequently lack employer-sponsored health insurance. When their wages are suppressed below legal minimums, they are less able to afford individual coverage, meaning medical problems are deferred until they become emergencies. The cost is shifted to public health systems.
• Restaurant work is physically demanding. Servers stand, carry, and move for entire shifts. When base wages are illegally reduced, workers often take more shifts to compensate, increasing exposure to repetitive strain injuries, slip-and-fall hazards, and burnout. There is no overtime math that makes this sustainable on $2.13 an hour.
• Many tipped workers in the restaurant industry are women, people of color, and immigrants. The intersection of race, gender, and wage theft compounds health disparities that already run deep in the American healthcare system.

Economic Inequality

Wage theft is the largest form of theft in the United States by dollar volume, exceeding all robbery, burglary, and larceny combined. The Cracker Barrel case illustrates exactly how it survives: through legal structures that make collective accountability expensive and procedurally exhausting.

• The Bristol-Myers ruling, now extended to FLSA collective actions by this court, creates a jurisdictional fragmentation problem. A corporation like Cracker Barrel, incorporated in Tennessee and operating restaurants in dozens of states, can benefit from dispersed liability. Workers harmed in Georgia, Florida, and Texas cannot simply join an Arizona lawsuit.
• Mandatory arbitration agreements embedded in employment onboarding shut the courthouse door for workers who sign them, often without fully understanding what they are agreeing to. Workers who cannot sue in court must pursue claims in private arbitration, a forum where the employer has more experience, more resources, and often selects the arbitration provider.
• Tipped workers earn some of the lowest median wages in the American labor market. Legal fees to pursue individual wage claims in arbitration or in separate state courts are not proportionate to the sums at stake. The practical effect is that many workers will never pursue claims at all, even legitimate ones.
• Collective action lawsuits under the FLSA were specifically designed by Congress to address the power imbalance between low-wage workers and large employers. Each procedural barrier added by court doctrine makes Congress’s intent harder to realize. The workers who suffer most are the ones who can least afford to fight alone.
• Cracker Barrel is a publicly traded company (NASDAQ: CBRL) operating hundreds of locations across the country, generating significant annual revenue. The legal resources it deployed in this case, including appellate counsel from multiple law firms across multiple states, dwarf anything four individual servers could fund.

The Dollar Value of the Tip Credit System

Who Is Accountable and What You Can Do

The case is remanded. The workers’ lawyers have more work to do. The legal fight over how Cracker Barrel pays its tipped employees is unresolved. Here is who holds power in this situation and who you should be watching.

The Corporate Roles Responsible

• Cracker Barrel Old Country Store, Inc.: The defendant. Incorporated and headquartered in Tennessee. The company designed and deployed the tip credit wage practices challenged in this lawsuit. The company also designed the arbitration agreement presented to workers through its online training program.
• Cracker Barrel’s Board of Directors and Executive Leadership: The policies at issue are company-wide. Compensation and labor compliance practices require executive and board-level approval at a company this size. The individuals holding these roles at the time the practices were implemented bear responsibility for those choices.
• Cracker Barrel’s Legal and Compliance Teams: The decision to embed an arbitration agreement inside employee training is a deliberate legal strategy. The teams who designed that structure had a purpose: to limit workers’ legal options before they ever had a reason to use them.

Watchlist: Regulatory Bodies with Jurisdiction

• Department of Labor, Wage and Hour Division (WHD): The primary federal agency responsible for enforcing the Fair Labor Standards Act. The WHD investigates tip credit violations and can pursue employers independently of private lawsuits. File a complaint at dol.gov/agencies/whd.
• National Labor Relations Board (NLRB): Workers organizing collectively to challenge wage practices are engaged in protected concerted activity under the National Labor Relations Act. The NLRB enforces those rights. If Cracker Barrel takes actions against workers who speak out or organize, that is an NLRB matter.
• State Attorneys General in the states where Cracker Barrel operates: Many states have their own minimum wage and tip credit laws that are stricter than the federal standard. State AG offices can pursue wage theft claims independently. Workers in states like California, New York, and others with strong labor laws have additional avenues.
• Consumer Financial Protection Bureau (CFPB): While primarily focused on consumer finance, the CFPB has weighed in on arbitration clauses in other contexts. The broader arbitration reform fight is one to follow here.

Grassroots Resistance and Mutual Aid

• If you are or were a tipped worker at Cracker Barrel, contact the plaintiffs’ legal team through the law offices of Nitin Sud (Sud Law PC), Benjamin Pierce, John Sud, and Monika Sud-Devaraj, all listed in the public court record. If you are outside Arizona, ask about venue options in your state.
• Connect with the National Employment Lawyers Association (NELA), which filed an amicus brief in support of the workers in this case. NELA can refer you to an employment attorney in your state who handles FLSA wage claims.
• One Fair Wage is the primary national organization fighting to end the tipped minimum wage. Their campaigns target state legislatures where the federal floor can be raised by state law. Getting involved locally is the fastest path to change, given how frozen federal action on this issue has been.
• Restaurant Opportunities Centers United (ROC United) organizes restaurant workers nationally on wage, tip, and working condition issues. They provide resources, legal referrals, and collective organizing support specific to the food service industry.
• If your employer uses an arbitration agreement embedded in training software, document the date, the platform, and what you were told about it before you completed the training. That documentation can matter enormously if you later need to challenge the agreement’s enforceability, as this case shows.
• Talk to your coworkers. The FLSA’s collective action mechanism exists precisely because individual workers cannot afford to fight alone. The Bristol-Myers ruling makes nationwide collectives harder, but state-level collectives are still viable. Organizing starts with conversations.