Employees Who Do Not Provide Direct Table Service May Share Tips

Topics: Court Decisions

Altering a long standing interpretation of California law, on March 27California's Second District Court of Appeal in Etheridge v. Reins International California, Inc., held that California law does not restrict mandatory tip pools only to those employees who provide "direct table service" to the customer. The Court of Appeal extended the scope of who may participate in mandatory tip pools, holding that any employee who participates in the chain of service may be required to participate in the mandatory tip pool. The Court of Appeal distinguished California law from the FLSA, noting that the FLSA restricts mandatory tip pools to those employees who customarily receive tips whereas California law and section 351 of the California Labor Code contain no such restriction.

This is a stark change in prior interpretations so it will be interesting to see if the plaintiff's attorneys attempt to take this issue up with the California Supreme Court. The California Employment Lawyers Association filed briefs in support of the plaintiff in this matter and the California Restaurant Association filed briefs in support of the defendant/employer. We will continue to keep you posted on this and other tip pooling cases.