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Tuesday, May 26, 2026

Labor & Employment – Class Action – Restaurant Franchises – Tip ... - South Carolina Lawyers Weekly

The plaintiff-server filed this purported class action, alleging that Ladles Soups restaurants had a policy of withholding their servers’ credit card tips. The Ladles Soups restaurant for which plaintiff worked is not a party to this appeal. Since plaintiff had no employment relationship with appellants (other Ladles Soups restaurants and franchisors), he lacks standing to sue them under the South Carolina Payment of Wages Act (SCPWA).

We affirm summary judgment for appellants while certification of the purported class remained pending.

The Ladles Soups franchise agreement is devoid of any reference to franchisees’ compensation policies. The owner of Ladles Soups-James Island, the franchise at which plaintiff worked testified in her deposition that her restaurant operates as an independent contractor separate and apart from the Franchising Respondents; the Franchising Respondents had no authority to set Ladles Soups-James Island’s compensation policy; and the Franchising Respondents did not have a policy for how to handle credit card or cash tips.

Corey Paul, another franchise owner, testified in his deposition that the franchise agreement did not direct owners how to compensate employees and there was no policy on how to handle credit card or cash tips. Julie Dyke, owner of Ladlessoups Mount Pleasant, also testified in her deposition that there was no franchise-wide policy about handling credit card tips.

Even if all franchises had a policy of withholding tips, we find no...



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