Law Office Management
Sep. 2, 2009
The Tipping Point
Several cases involving gratuities are now heading to the state Supreme Court.
Here's a tip: Cases involving gratuities given to workers at restaurants, bars, and casinos are hot. Just ask plaintiffs attorney Dennis Moss. A name partner at Spiro Moss in Los Angeles, he has been litigating tip cases for decades, ever since Leighton v. Old Heidelberg (219 Cal. App. 3d 1062) in 1990. But currently he is waiting for a California Supreme Court calendar date in Lu v. Hawaiian Gardens Casino Inc. (170 Cal. App. 4th 466 (2009)). Once that case is decided, the court will hear his appeal in another tip case, Grodensky v. Artichoke Joe's (171 Cal. App. 4th 1399 (2009)). Meanwhile, two other recent cases the state Supreme Court will not review?Budrow v. Dave & Buster's of California Inc. (171 Cal. App. 4th 875 (2009)) and Etheridge v. Reins Int'l California, Inc. (172 Cal. App. 4th (2009))? have resulted in published opinions that are citable as precedent (at least while review in Lu and Grodensky is pending). All this activity comes on the heels of the overturned $100 million win for the plaintiffs in Chau v. Starbucks Corp. 174 Cal. App. 4th 688 (2009)), in which the trial court had ruled against the coffee chain's practice of requiring baristas to share their tips with supervisors. The plaintiffs say they, too, will ask the state Supreme Court for review. Together, the cases pose difficult questions: Can restaurants, bars, and casinos require workers to share tips? Who really owns the gratuities left by customers? Who can be included in tip pools? In Lu, however, the supreme court will limit its review to a single issue: Was the appeals court correct in concluding that there is no private right of action under California Labor Code sections 351 and 450? Must they instead pursue relief indirectly under the state's unfair competition law, or U.C.L. (Cal. Bus. & Prof. Code § 17200)? "It is pretty well established that there's no right of private action under Labor Code [section] 351," says Tracey A. Kennedy, a partner at Sheppard Mullin Richter & Hampton in Los Angeles and New York who is representing Hawaiian Gardens Casino against Moss's client. "But plaintiffs appealed because they were probably hoping the supreme court would review whether tip pooling is legal." Moss says he will argue to proceed under 351 because he thinks it will be more favorable for his client than using the U.C.L., which doesn't provide for plaintiffs to collect damages (although it does allow for restitution of lost tips). The other three cases concern broader tipping questions. In Grodensky, for instance, the First District Court of Appeal affirmed the legality of tip pooling, finding that casino floor managers aren't agents of the employer and therefore can share in bartenders' tips. In Budrow, the appeals court ruled that restaurant waiters must share their tips with bartenders. In passing, the court nodded its approval of the Old Heidelberg opinion that had acknowledged "the near impossibility of being able to determine the intent of departed diners in leaving a tip." And Etheridge held that a tip pool could include employees who don't provide direct table service but are part of a chain of service, such as kitchen staff. Meanwhile, Moss thinks Justice Joan Dempsey Klein's dissent in Etheridge certainly suggests that he may finally get clarity on the tip issues he's been pressing for decades. He says, "Notwithstanding the Legislature's failure to address Leighton at the time it amended section 351 in 2000 ... there is profound reason, after Lu is decided, to allow Grodensky to proceed on all issues not decided in Lu, and to address how tipping has to be looked at differently in different cases."
Kari Santos
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