With only $20,000, Sandy Beall, an ambitious student at the University of Tennessee, founded Ruby Tuesday in 1972. The restaurant did so well that Beall dropped out to focus on the business. Since then, Ruby Tuesday has become a force to reckon with in the food and beverage industry, seeing that it rakes in annual revenue of over $1 billion. The success has not been without a few hurdles along the way. Besides having poor slogans like “Fun Between the Buns,” the restaurant chain has also suffered from being on the wrong side of the law. Of course, such experiences bear a huge financial burden on the business so let’s talk about the 10 biggest Ruby Tuesday lawsuits in company history.
10. EEOC v. Ruby Tuesday, Inc. – $45,000
In August 2014, Floyd Cardwell felt he was a great fit for the general manager position that Ruby Tuesday had advertised. He, therefore, took his chance and applied for the vacancy across multiple locations in Broward and Palm Beach counties, trying to spread his luck. Cardwell was not wrong in assuming he was the best fit for the company and even Randy Philips, the talent acquisition manager who interviewed Cardwell over the phone on August 18, 2014, told him so.
Cardwell continued being assessed through face-to-face interviews and the restaurant even conducted background checks on the then-59 hopeful job applicant. Unfortunately, Ruby Tuesday informed Cardwell, who had over 20 years of experience in the food and beverage industry, through an email that he was not the ideal candidate. They were seeking someone who would help them minimize premature resignation and maximize longevity. Consequently, Ruby Tuesday denied 59-year-old Cardwell the position and allegedly opted for a person 17 years younger.
U.S. Equal Employment Opportunity Commission (EEOC), swooped in and sued Ruby Tuesday for age discrimination, saying that the restaurant violated the Age Discrimination in Employment Act (ADEA). The restaurant settled the case by agreeing to offer Cardwell $45,000 and train its hiring management team on ADEA policy.
9. EEOC v. Ruby Tuesday, Inc. – $100,000
In the summer of 2013, Ruby Tuesday had temporary positions to be filled so the company posted an internal memo within a nine-state region. The positions were quite attractive seeing that Ruby Tuesday was offering company housing and even promised successful applicants an opportunity to pocket more money. The catch was that only female candidates would be considered, and Ruby Tuesday explained that due to the company-provided housing, housing both genders would be an issue. True to the announcement, the company only selected females to fill the temporary vacancies, locking out two males who were qualified to work as servers in Utah’s resort town, Park City.
According to the U.S. Equal Employment Opportunity Commission (EEOC), Title VII of the Civil Rights Act of 1964 does not allow employers to give some employees better terms and conditions of employment based on gender. Therefore, EEOC filed a lawsuit against Ruby Tuesday after the two sides failed to settle out of court. The company consequently agreed to pay $100,000 to the two male employees, Joshua Bell and Andrew Herrera. Ruby Tuesday also consented to provide all its managers and employees training on Title VII of the Civil Rights Act of 1964 and taking steps to prevent future gender discrimination.
8. Greene v. Ruby Tuesday, Inc. – $253,011
In February 2019, Donald C. Greene, a real estate developer, sued Ruby Tuesday over the Clifton Park restaurant that had been shut down. Greene sued the restaurant chain claiming that it had violated the lease agreement when it closed the restaurant off Route 146 during the fall of 2018. In August 2018, Ruby Tuesday gave notice to the real estate developer about its intended closure explaining that the restaurant was struggling financially.
By the end of September 2018, the restaurant had closed down and it was no exception since 50 other Ruby Tuesday restaurants had shut down citing declining sales. According to Greene, Ruby Tuesday signed a 20-year lease in 2004 and despite the notice, the real estate developer had not terminated the lease nor had he consented to the closure of the restaurant. As a result, Greene sought compensation amounting to $253,011 to cover past and future rents plus interest.
7. EEOC v. Ruby Tuesday, Inc. – $575,000
In 2009, EEOC filed a lawsuit against Ruby Tuesday over age discrimination. The federal age discrimination lawsuit was for five of the chain’s restaurants located in West Mifflin, Altoona, Du Bois, Greensburg, and Indiana. According to EOCC, the chain of restaurants discriminated against job applicants 40 years or older but Ruby Tuesday never admitted to any wrongdoing. Instead, it agreed to settle the matter for $575,000 to avoid litigation costs and reduce disruption.
6. Craig v. Ruby Tuesday, Inc. – $1.2 Million
On March 30, 2016, Charlene Craig, who worked as a server at Ruby Tuesday filed a lawsuit against her employer claiming that servers and bartenders were being cheated out of their wages. She said the employees were supposed to do some “side work” for which they were underpaid. According to American Legal News, the workers said that 20% of the work they did was “side work,” yet they were paid on a tip basis, which is illegal. Side work refers to any duties falling outside the routine tasks assigned to a worker. Routine duties of a server, such as taking orders, are paid on a tip basis, but side work is compensated differently.
When Craig took legal action, she hoped that other servers would join her, and they did, making it a class action Ruby Tuesday lawsuit. Some sources opined that if Ruby Tuesday was found guilty of the claims, it would owe its thousands of workers across 658 locations $10 per hour in back pay.
The case dragged on for years, and eventually, in July 2021, justice was served. The plaintiffs’ attorney Richard Hayber presented a strong case against Ruby Tuesday, who had previously denied the accusations. The company was hit with evidence of a paper trail of hours the workers worked, and the matter was settled out of court when Ruby Tuesday agreed to pay its former servers $1.2 million.
5. Ruby Tuesday, Inc. v. Ruby Tuesdays – $2 Million
When Sandy Beall opened his first restaurant in 1972, he christened it Ruby Tuesday. A fraternity brother suggested it, having gotten the name from a Rolling Stones song, and Beall found it appropriate, so it has stuck to date. In 2016, a rock band based in Blackburn was also inspired by the song and decided to name their band “Ruby Tuesdays”. For the restaurant chain, the rock band was riding on the fame of the already-established business and was hoping to cash in by using an almost-similar name.
Therefore, according to Vice, the restaurant’s law firm, Mintz Levin, said that only Ruby Tuesday was entitled to the goodwill of the trademark. In their opinion, the rock band violated trademark laws by using the name. The law firm recommended the harshest consequence, so Ruby Tuesday sued the band for $2 million.
For the little-known band, $2 million was a fortune they could not afford to pay and after spending $12,000 on merchandise, they were not ready to hand it over to Ruby Tuesday. Besides, as the guitarist argued, they did not even know of the existence of the restaurant chain. Also, they were was no trademark infringement because while they were selling music, the restaurant was selling burgers, which the band could not pass off as their own. Ruby Tuesday eventually realized going after the broke band was not worth it and dropped the suit, much to the disbelief of the five-guy rock band intimidated by the billion-dollar company.
4. Guttentag et al v. Ruby Tuesday, Inc. – $3 Million
On behalf of the tipped employees, who worked in 700 Ruby Tuesday locations. The plaintiffs claimed that the employer discouraged overtime and instead, wanted workers to carry out assigned duties during their shifts. Tipped employees, however, had to wait for the first customer to arrive to clock in, yet they would be performing other tasks before then. Moreover, at the end of their shifts, employees
It appears that Ruby Tuesday had already started the habit of unfair compensation long before Craig filed her lawsuit. In April 2012 Steven Reeves and Michael Guttentag filed a Ruby Tuesday lawsuit would be expected to clock out and continue to do other tasks, afterward. As a result, they worked over 40 hours, but the company would make it look like they never exceeded 40 hours.
The court received enough evidence and allowed other class members to opt into the collective action. 4,170 Ruby Tuesday employees comprising bartenders, servers, and bus people opted into the action and they settled for $3 million in the overtime pay suit since the restaurant violated the Fair Labor Standards Act (FLSA).
3. Kyrstek v. Ruby Tuesday, Inc. – $5 Million
Ruby Tuesday’s shareholders filed a case against the company. They claimed that between April 10, 2013, and October 9, 2013, Ruby Tuesday issued materially false and misleading statements regarding its financial performance and future projections. The suit alleged that Ruby Tuesday also misrepresented statements of secondary restaurants, Lime Fresh Mexican Grill, which it owns. The shareholders had enough evidence proving that Ruby Tuesday had omitted material information regarding Lime Fresh Mexican Grill’s performance. Evidence also showed that Ruby Tuesday had acted carelessly in making the omission and by so doing, caused the shareholders to suffer losses.
Ruby Tuesday had filed a motion to dismiss alleging that the plaintiffs had not proved that the restaurant and its executives presented misleading statements. The company also claimed that it had not tried to hide its poor performance. Shareholders insisted that Ruby Tuesday had committed simple fraud, but it remained fraud, regardless. A judge thought so too, going by the evidence presented, and denied the motion to dismiss. Ruby Tuesday was ordered by Tennessee federal court to pay $5 million to settle the class action suit.
2. Patterson v. Ruby Tuesday, Inc. – $7.5 Million
According to Knox News, more than eight Ruby Tuesday shareholders sued the restaurant chain to stop its sale to NRD Capital. The sale would absorb Ruby Tuesday’s debt; thus, was valued at $335 million. Marcell Maseman sued Ruby Tuesday, the CEO, the non-executive chairman, and six other company directors, claiming that the sale would violate the Securities Exchange Act of 1934. He added that the company had issued a proxy statement to its shareholders that was materially incomplete and misleading.
Maseman said that shareholders were getting a raw deal. NRD Capital had first offered $3.50 per share but dropped to $2.40, which Ruby Tuesday accepted, yet other bidders offered as much as $2.88 per share. Another lawsuit also claimed that Ruby Tuesday’s executives would pocket millions of dollars from which other stockholders were not entitled to get a share. With such irregularities, the suits wanted the sale to be stopped at least until they had enough information. Ruby Tuesday stood to lose $7. 5milion as a termination fee if the shareholders had their way.
Luckily, the sale was ratified. Although Ruby Tuesday did not have to pay any termination fees, it had to face the wrath of shareholders who were not ready to approve the sale.
1. Maddy v. Ruby Tuesday, Inc. – $10 Million
Whoever said that a hungry man is an angry man, must have foreseen what happened in Ruby Tuesday’s restaurant in Smyrna on August 28, 2005. A bartender at the restaurant served a patron with so much alcohol that the customer was intoxicated. The intoxicated patron then went ahead to assault another customer, Dan Maddy, who suffered lacerations to his chest and face, as a result.
The company still did not see any wrongdoing on the part of its employee, so the jury sought to punish it. According to The Murfreesboro Post, Maddy’s lawyer, George Nolan, said that Ruby Tuesday enjoyed $124 million sales revenue from alcohol and he intended to teach the company a lesson. The jury agreed that a lesson was necessary. Thus, the verdict was $10,035,000, which to Nolan was still not high enough for a Fortune 500 company.