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Waiters File Lawsuit Against The Waldorf For Unpaid Tips
March 2, 2010Berke-Weiss & Pechman LLP filed a lawsuit against The Waldorf-Astoria hotel on February 26, 2010 alleging the hotel retained service charges which should have been paid to its banquet waiters. The case is Orlando Colon v. Hilton Worldwide, Inc., 10 Civ. 1575 (SDNY).
It Is Illegal For a Restaurant or Hotel to Keep Gratuities or Tips Meant For Its Waiters
The lawsuit seeks to recover misappropriated service charges and special banquet gratuities for banquet waiters which The Waldorf led customers to believe were gratuities or tips to be paid in their entirety to their service staff, but were actually kept by the house. This practice was held by the New York Court of Appeals to be unlawful in the case of Samiento v. World Yacht Inc. In that case, the Court of Appeals concluded that a mandatory service charge may be a “charge purported to be a gratuity” within the meaning of the New York Labor Law. The Samiento case relied on Section 196 New York Labor Law, which requires that:
No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee.
Country Clubs and Catering Halls Have Also Been Sued
The practice used by The Waldorf is not uncommon. Indeed, many catering halls, country clubs, and restaurants add a service charge or gratuity to the bill but do not pass on these gratuities or tips to their waitstaff. Berke-Weiss & Pechman LLP has a pending lawsuit against Wheatley Hills Country Club in Nassau County, New York on a similar issue, Maura Penteck v. Wheatley Hills Golf Club, Inc., 10 Civ. 549 (EDNY). Given the pervasiveness of this unlawful practice, we believe that disputes over banquet service charges will be the next lawsuit du jour in the New York hospitality industry.Restaurant Workers Sue for Same-Sex Harassment
January 18, 2010Berke-Weiss & Pechman LLP recently prosecuted a charge of male-on-male sexual harassment at the Equal Employment Opportunity Commission (“EEOC”) against Sparks Steak House. As a result of the charge, the EEOC filed a lawsuit against Sparks in the Southern District of New York, charging physical and verbal male-on-male sexual harassment and retaliation under Title VII of the Civil Rights Act of 1964. Several male employees alleged that a male Sparks manager groped them, attempted to touch them inappropriately, and made offensive sexual remarks. Although only 16% of sexual harassment charges made at the EEOC were filed by males in 2009, EEOC New York Director Spencer H. Lewis, Jr. stated in that agency’s press release, “The EEOC is determined to stop sexual harassment whether faced by men or women.”
The wave of sexual harassment claims in the restaurant industry has led to notable settlements and damage awards. Only one month before the EEOC filed suit against Sparks Steak House, the EEOC settled a similar male-on-male sexual harassment case for $345,000 with the Cheesecake Factory, a nationwide restaurant chain. The EEOC recently settled a sexual harassment lawsuit for $255,000 with Ruby Tuesday after five female employees alleged that a general manager made crude sexual propositions to women and frequently made sexually explicit and graphic comments to them. In addition, a federal jury recently returned a verdict for $105,000 in a sexual harassment lawsuit against IHOP Restaurant, where two female employees claimed that an assistant manager groped them and subjected them to sexual propositions.
The Sparks lawsuit is part of a significant uptick in sexual harassment cases in the restaurant industry. The EEOC’s lawsuit signals that restaurants face an increasing risk that they will be sued by their employees for sex harassment if they do not prevent or effectively address harassing conduct.
Courts Asked To Determine Whether Accountants Are Entitled to Overtime Pay Under FLSA
January 13, 2010With tax season underway, it is a good time to consider whether junior accountants or associate accountants are properly classified as exempt or nonexempt from overtime under the Fair Labor Standards Act (“FLSA”). According to the Department of Labor regulations, 29 C.F.R. 541.301(e)(5):
Certified public accountants generally meet the duties requirements for the learned professional exemption. In addition, many other accountants who are not certified public accountants but perform similar job duties may qualify as exempt learned professionals. However, accounting clerks, bookkeepers and other employees who normally perform a great deal of routine work generally will not qualify as exempt professionals.
Regardless of the title used, determination of whether an accountant is exempt from the FLSA is made by the courts by analyzing actual job duties. If the job does not require a CPA license and the accounting employees are not given independent discretion in decision-making, junior accountants or associate accountants could be entitled to overtime pay for hours they work over 40 in a given week. The key inquiry is whether work done is routine or that of a learned professional. The question is worth examining because misclassification of a non-CPA accountant as “exempt” from the FLSA can be costly, subjecting an employer to back pay liability for overtime, as well as liquidated damages, leading to a substantial monetary recovery by the employee.
Recently, accounting firms and financial services companies have been subject to lawsuits, some of which are class actions, brought by junior accountants and associate accountants claiming they were misclassified as nonexempt, and seeking to recover unpaid overtime. In one case, decided in December 2009, a federal judge in Connecticut declined to dismiss a wage and hour case brought by JP Morgan Chase accountants who worked in their hedge fund services business. The accountants claimed they were merely “internet age bookkeepers” whose positions did not require knowledge of accounting, thus making them eligible for paid overtime. The court determined that the nature of their primary duties was a question of fact to be determined at trial. A jury now will decide whether these accountants were or were not exempt.
Waiters Sue Employer For Tips and Get Record Settlement
October 23, 2009Berke-Weiss & Pechman LLP has obtained court approval of a $3.15 million dollar settlement with Sparks Steak House of a class action the firm brought on behalf the waiters at Sparks. The lawsuit was brought under the Fair Labor Standards Act and the New York Labor Law to recover tips alleged to have been misappropriated by the restaurant. The Sparks settlement is the largest reported wage settlement ever obtained involving a single restaurant. (Click here to view the Final Order approving the settlement).
Sparks is self-described as “the Fort Knox of fine aged beef.” It has been recognized by Zagat as the “apex” of New York steak houses and by Fodor’s as the “classic New York steak house.” There were 200 present and former waiters of Sparks involved in the lawsuit.
The basis of the claims against Sparks was the diversion of waiters’ tips to individuals such as kitchen expediters, the banquet manager, and a dessert chef who were alleged to have been improperly included in the tip pool. Sparks denied the claims and the case was litigated for three years before settlement was reached.
At the Fairness Hearing on the settlement, United States District Court Judge Paul A. Crotty recognized the “professionalism” of the parties in the way in which they had resolved the case. Judge Crotty found that “the settlement in all its respects is fair and reasonable and adequate. It addresses mistakes that were made over time and corrects them, puts the defendant on a better course to follow in the future, one that will hopefully eliminate any further disputes.” (Click here to view transcript of the Fairness Hearing). The settlement also was recognized by Norman Bromberg, former District Director of the U.S. Department of Labor’s Wage and Hour Division, New York District Office, as “fully and fairly reimbursing” the Sparks waiters.
Berke-Weiss & Pechman LLP has been active in wage and hour litigation within the restaurant industry. The Firm currently has cases pending against Bobby Van’s Steak House, the Old Homestead Steak House, Estiatorio Milos, Scalinatella, and other New York City restaurants. In addition, Berke-Weiss & Pechman LLP has been conducting preventative counseling and litigation defense for restaurants who want to ensure they are in compliance with the law.
Temporary Restraining Order Granted To Stay Vaccination Requirements
October 16, 2009In the midst of the growing debate about New York’s mandatory flu vaccination rules, a state court judge in Albany county granted a temporary restraining order halting their enforcement pending further legal action. Three union and employee lawsuits were consolidated by the court to grant the application for a TRO. Pending further court action, health care professionals have a respite from the vaccination requirement.