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The Massachusetts Supreme Judicial Court vacated a lower court order in ruling that Blue Hill CC in Canton, Mass. violated state law by listing charges for “service” on its invoices but failing to deliver related gratuities to workers. The club had maintained that the term used on invoices was “poor drafting” and sought to retain the disputed charges under a “safe harbor” provision. Separately, a judge approved a $64,500 settlement in a class-action lawsuit brought on behalf of servers and bartenders at Tedesco Country Club in Marblehead, Mass., who claimed that the owners were withholding money that some reciprocal members may have believed were tips.
Blue Hill Country Club in Canton, Mass. was found to be in violation of the Massachusetts Tips Act by listing charges for “service” on its invoices but failing to deliver related gratuities to workers, the state’s Supreme Judicial Court ruled on August 23rd, WBUR of Boston reported..
The Massachusetts Tips Act allows for wait staff employees, service employees, and service bartenders to receive tips. As a general rule, only employees who provide service directly to customers are entitled to receive tips and to participate in tip pools.
With its decision, the Supreme Judicial Court vacated a lower court order in Blue Hill CC’s favor and remanded the matter to the Superior Court for further proceedings, WBUR reported.
Blue Hill CC had maintained that the term used on a patron invoice was poor drafting and that it was permitted to retain the disputed charges under the act’s “safe harbor” provision, WBUR reported. But the high court said the safe harbor provision “does not apply in these circumstances.”
“As we have previously noted, ‘[t]he Legislature intended to ensure that service employees receive all the proceeds from service charges, and any interpretation of the definition of ‘service charge’ must reflect that intent,” Justice Serge Georges wrote in his ruling. “A plain reading of the language of the final invoice, labeling the disputed fee as a “service” charge, accomplishes this purpose.”
Paul Holtzman of Krokidas & Bluestein, who represented workers in the case, said the ruling was an “important confirmation that Massachusetts law provides clear protection against workers having their tips taken from them,” WBUR reported.
“It’s gratifying that this victory means these workers will now receive not only their back wages and tips, but also the mandatory treble damages designed to deter future violations,” Holtzman said in a statement. “It is also an important reminder of the broad scope of the Tips Act protecting workers at hotels, spas, hair and nail salons, restaurants, catering halls and country clubs—anyone in an occupation in which employees customarily receive tips.”
Judge Scott Kafker dissented, writing that he believed that Tips Act was not violated, WBUR reported.
MassWageLaw.com describes the “basic details” of the Massachusetts Tips Act as follows:
- Employees are entitled to their tips and to receive them the same day that they earn them.
- Managers and employers cannot share in tips. This includes any waiters, counter workers, or others with any managerial responsibilities. When an employee has any managerial duties, they cannot share in a tip pool. For example, shift supervisors do not qualify as “waitstaff” eligible to participate in tip pools under provisions of the Massachusetts Tips Act, since those employees have some managerial responsibility.
- Employees get “service charges,” which are anything that a customer would reasonably think would be part of the employee’s pay in lieu of or in addition to a tip. However, management can keep “house” or “administrative” fees if the customer is informed in writing about what it is and that it is not a service charge.
- Tips can be pooled but only among waitstaff, bartenders, and service employees “in proportion to the service provided.”
- A “service employee” is someone like a masseuse who “works in an occupation in which employees customarily receive tips or gratuities, and who provides service directly to customers or consumers, but who works in an occupation other than in food or beverage service, and who has no managerial responsibility.”
Common violations of the tip law, according to MassWageLaw.com, include these practices:
- Tip sharing with managerial employees, including assistant managers and supervisors.
- Tip sharing with expediters and other employees who don’t service customers directly. However, it is lawful to share tips with bartenders and bus people.
- Employers keeping service charges or administrative/house fees without proper written disclosures.
Employees who have their tip rights violated can sue for treble damages, attorneys’ fees and costs, in the same fashion as any other employee who has their rights under the Massachusetts Wage Act violated, according to MassWageLaw.com
On August 19th, The Salem (Mass.) News reported, a judge approved a $64,500 settlement in a class-action lawsuit brought on behalf of servers and bartenders at Tedesco Country Club in Marblehead, Mass. who alleged that the owners were withholding money that some reciprocal members may have believed were tips.
The 2019 lawsuit was brought by a server at the Marblehead club, Nicole Curcis, who alleged that reciprocal club members (those who belonged to other clubs but had privileges at Tedesco by agreement) were assessed a 20% service fee on their food and beverage bill, The Salem News reported.
Without required notices on the bill to tell customers the service fee did not include a tip, the suit alleged that many reciprocal members assumed that the service fee did cover the gratuity, The Salem News reported.
Curcis’ lawyers, Nicholas Ortiz and Raven Moeslinger, convinced the court to treat the case as a class action, The Salem News reported.
The club and its owners disputed the claim, The Salem News reported. But according to the settlement, both sides began to discuss a resolution to the case short of going to trial, which carried costs and risks for both sides.