Legal Referral Service Lawyers Obtain Ground-Breaking Decision for Wait Staff in Tipping Case

Legal Referral Service Lawyers Obtain Ground-Breaking Decision for Wait Staff in Tipping case

NEW YORK—Today, New York State’s highest court reinstated a complaint brought by 14 waiters against their employer, World Yacht, Inc., for illegally keeping the automatic gratuity charges it collected from guests. The waiters were represented by Steven M. Sack and Scott A. Lucas, two attorneys retained through the New York City Bar Association’s Legal Referral Service, a program that refers experienced lawyers to the public. The decision was 6-0, Chief Judge Kaye took no part.

The waiters alleged that World Yacht, an operator of dining cruises, added a 20% service charge at banquets in place of the tip, but failed to distribute it to the wait staff. The waiters also alleged that World Yacht failed to distribute the automatic gratuities that it added to, or included in, the price charged to certain classes of customers.

In its decision, the Court of Appeals ruled that the waiters had a viable cause of action against World Yacht for violating Labor Law § 196-d, which prohibits employers from retaining “any part of a gratuity” or “any charge purported to be a gratuity for an employee.” New York State’s highest court held “the statutory language of Labor Law § 196-d can include mandatory charges when it is shown that employers represented or allowed its customers to believe that the charges were in fact gratuities for its employees.” The case is being remanded to the New York County Supreme Court for trial.

“This is a case about the difference between right and wrong. It is simply wrong for a restaurant or banquet operator to add a 20% service charge if it has no intention of distributing it to the wait staff,” said attorney Scott Lucas. “We’re glad the Court of Appeals has made it harder for restaurants and caterers to keep gratuities that were intended for the wait staff.”

“Our clients, the waiters, were underpaid, and were turned away by other lawyers until they, like more than 400 people every day, contacted the New York City Bar Lawyer Referral Service, which referred them to us,” said employment attorney Steven Sack, who has worked with the Legal Referral Service since 1984. “In my practice, I represent those individuals who don’t get their fair share, such as in this case—where compensation that waiters should have received was allegedly withheld by their employer.”

The Legal Referral Service, the largest in the country, handles over 100,000 calls per year, directing the public to experienced lawyers in a vast range of legal fields. The Service can be reached at 212-626-7373, (212-626-7374 for Spanish speakers), or www.nycbar.org

The Attorney General, State Department of Labor, and workers’ rights organizations all filed amicus briefs with the Court of Appeals in support of the waiters.

About the Association
The New York City Bar Association (www.nycbar.org) was founded in 1870, and since then has been dedicated to maintaining the high ethical standards of the profession, promoting reform of the law, and providing service to the profession and the public. The Association continues to work for political, legal and social reform, while implementing innovative means to help the disadvantaged. Protecting the public’s welfare remains one of the Association’s highest priorities.