Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On April 29, 2009, the Supreme Court of California granted the petitioner’s petition for review of the Second District Court of Appeal’s opinion in Lu v. Hawaiian Gardens Casino (2009 170 Cal. App. 4th 466, 88 Cal. Rptr. 3d 345), concerning the legality of tip-pooling arrangements with casino dealers.
In granting review, the Supreme Court limited the pure legal question to the following: “Does Labor Code section 351, which prohibits employers from taking ‘any gratuity or part thereof that is paid, given to, or left for an employee by a patron,’ create a private right of action for employees?” The vote for review of the Court of Appeal decision was unanimous.
In addition to the recent Etheridge v. Reins Int’l Cal., Inc. opinion by California’s Second District Court of Appeal, California employers should note the Second District’s recent tip-pooling opinion in Grodensky v. Artichoke Joe’s Casino, 171 Cal. App. 4th 1399 (2009). In Grodensky, the plaintiff, a casino card dealer, filed a putative class action challenging a mandatory tip-pooling policy that Artichoke Joe’s Casino had implemented for its dealers. The trial court determined (and the Court of Appeal affirmed) that the casino had not violated the minimum wage law by the tip-pooling arrangement, but had violated Labor Code section 351 by requiring the dealers to share their tips with shift managers. The Court of Appeal found no error in the trial court’s issuance of a pre-trial protective order prohibiting any communications regarding the lawsuit between the casino and dealers while determination of the class certification motion was pending. The Court of Appeal also affirmed that Grodensky and the putative class had a private right of action under Labor Code § 351 and that the trial court did not abuse its discretion by ordering the disgorgement of the sums taken from the dealers’ tips and distributed to the shift managers. Compare Etheridge v. Reins Int’l Cal., Inc., 2009 WL 794521 (Cal. Ct. App. 2009) with Budrow v. Dave & Buster’s of Cal., Inc., 171 Cal. App. 4th 875 (2009) (restaurant employees who do not provide direct table service may share in tip pool).
This blog entry was authored by Tyler Paetkau.