Labor department sues Oklahoma nonprofit coffee chain over wages and tips

The U.S. Department of Labor filed suit on September 11 against Oklahoma nonprofit coffee chain Not Your Average Joe and its founder, alleging the organization denied workers tips and wages and allowed minors to work in violation of federal child labor law, according to reporting from KJRH.

The lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, names Not Your Average Joe Inc. and founder and executive director Tim Herbel as defendants, according to NewsOn6’s coverage. The nonprofit operates coffee shops and other commercial operations under the names Not Your Average Joe, ABE’s and Stella Nova, and employs people with disabilities alongside employees without disabilities.

The complaint covers the period from September 12, 2023, through the date of trial and lists more than 320 affected employees, according to KJRH. The Labor Department alleges the company violated the Fair Labor Standards Act by keeping employee tips, requiring workers to clock out during breaks while classifying the unpaid time as “volunteer work,” and designating overtime hours as unpaid volunteer time rather than compensating workers for them, according to Daily Coffee News.

The complaint states that Herbel “subjectively determined” how much of each tip pool to allocate to individual employees and distributed the money weeks or months after the pay period, according to reporting from KOKH. It alleges the company withheld portions of tips to cover uniforms, licensing and credit card processing fees, while keeping all credit card tips for itself.

The government also alleges the company permitted minors to work excessive hours near dangerous equipment and failed to maintain adequate wage and hour records, Daily Coffee News reported. The Labor Department’s complaint emphasizes that the violations were willful. The Labor Department is seeking back wages, tip restitution, an equal amount in liquidated damages, and a court order barring Not Your Average Joe and Herbel from future Fair Labor Standards Act violations, according to KJRH.

Herbel acknowledged procedural errors but denied intentional wrongdoing. “We try to do everything right but occasionally you get a few things wrong, but never intentionally,” he said, according to KJRH. He characterized the child labor allegation as overstated, saying it involved children at a spring break camp standing near equipment rather than operating it, and disputed a separate $68,000 fine tied to a mixer incident as “onerous.”

In a statement to News9, Not Your Average Joe acknowledged that “some tip distributions were occasionally delayed, and aspects of our historical recordkeeping were not adequate.” The organization said it had already strengthened its systems and hired consultants in the months before the lawsuit was filed, according to News9’s reporting.

Not Your Average Joe operates five coffee shop locations across Oklahoma and employs more than 40 adults with special needs, according to KJRH’s earlier reporting on the chain’s expansion. “We have 40-plus adults with special needs employed now and that’s incredible,” Herbel said at the opening of the chain’s Broken Arrow location.

The company said its historical tip allocations “were calculated using spreadsheets based on hours worked” and said it is now in active settlement discussions with the Labor Department, according to KOKH.