Court Holds That Restaurant Has Right to Dictate Tipping Policies

Hospitality Law May 2017

Shira M. Blank, an Associate in the Employment, Labor & Workforce Management practice, in the firm’s New York office, authored an article in Hospitality Law, titledCourt Holds That Restaurant Has Right to Dictate Tipping Policies.”

Following is an excerpt (see below to download the full article in PDF format):

Tip pools can be a useful device for appor­tioning tips among tip-earning workers, which generally includes front of the house employees involved in direct customer service. Whether non-tip earning, back-of-the-house employees also may participate in a tip pool is currently unclear and may be ripe for adjudication by the Supreme Court in the consolidated cases, Oregon Restaurant and Lodging, et al.v.Thomas Perez, et al., Cesarz et al.v.Wynn Las Vegas et al., in which the 9th Circuit Court of Appeals held that the U.S. Department of Labor is empowered to restrict employers from tip pooling.

A California federal court has recently weighed in on this issue in Wilkes v.Benihana, Inc., No. 16 Civ. 2219 (JM) (DHB), 2017 U.S. Dist. LEXIS 29127 (S.D. Cal. 02/28/2017), holding that commercial enterprises, rather than courts, should be able dictate their tip pooling policies and finding that a tip pooling policy allowing front and back of the house employees to par­ticipate in the tip pool was lawful.