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Case Law Database

Access over workers' compensation decisions, including En Banc, Significant Panel Decisions, and writ-denied cases.

Case No. MISSING
Regular Panel Decision
Dec 03, 2013

Maldonado v. BTB Events & Celebrations, Inc.

This case involves claims by food-delivery workers against catering companies (Between the Bread) for underpayment under federal (FLSA) and state (NYLL) law, centering on an 11% mandatory delivery surcharge. Plaintiffs argued this surcharge was a tip or gratuity that they were entitled to, while defendants maintained it was an administrative charge. The court analyzed whether the 11% surcharge constituted a gratuity under both FLSA and NYLL, applying different legal standards. For FLSA claims and NYLL claims prior to January 1, 2011, the court found in favor of the defendants, ruling the surcharge was not a gratuity. However, for NYLL claims from January 1, 2011, onwards, the court found in favor of the plaintiffs, concluding the surcharge was a purported gratuity due to stricter NYSDOL regulations and the employer's insufficient notification.

FLSANYLLMinimum WageOvertime CompensationTip CreditGratuity DisputeService ChargeDelivery WorkersCatering CompanySummary Judgment
References
16
Case No. MISSING
Regular Panel Decision
Aug 23, 2011

Tamburino v. Madison Square Garden, LP

This case concerns an appeal where plaintiff food and beverage servers at Madison Square Garden brought a class action suit against MSG Holdings, LLC. They alleged that MSG violated Labor Law § 196-d by retaining a portion of a mandatory "service charge" that customers believed was entirely a gratuity for the service staff. MSG sought to dismiss the complaint, arguing that the gratuity claims were preempted by federal law (Labor Management Relations Act § 301) and subject to mandatory grievance and arbitration under their collective bargaining agreement. The appellate court rejected both of MSG's arguments, finding that there was no clear waiver of statutory rights in the CBA and that the state-law claim for gratuities could be resolved without interpreting the CBA. Consequently, the court affirmed the denial of MSG’s motion to dismiss the complaint.

Labor LawGratuitiesService ChargePreemptionCollective Bargaining AgreementArbitrationStatutory RightsLMRAWage DisputeEmployment Law
References
16
Case No. 12-CV-656(LJV)(LGF)
Regular Panel Decision

Davis v. 2191 Niagara St., LLC

This case addresses the defendants' objections to a Magistrate Judge's Report and Recommendation and an appeal of his Decision and Order, arising from a Fair Labor Standards Act claim. The central issue is whether New York Labor Law § 196-d, which prohibits employers from retaining gratuities or purported gratuities, is preempted by the Internal Revenue Code (IRC) or the FLSA. The District Court affirmed the Magistrate Judge's findings, concluding that compliance with both federal and state law is possible, particularly by providing a required disclosure to customers. The court found no impossibility or obstacle preemption. Consequently, the defendants' motion for judgment on the pleadings was denied, and the case was recommitted for further proceedings.

Fair Labor Standards ActNew York Labor LawGratuities RetentionService Charges DistributionFederal PreemptionSupremacy ClauseInternal Revenue Code ComplianceMagistrate Judge ReviewMotion for Judgment on PleadingsStatutory Interpretation
References
22
Case No. MISSING
Regular Panel Decision
Jul 27, 2007

Hai Ming Lu v. Jing Fong Restaurant, Inc.

Plaintiffs, members of the wait staff at Jing Fong Restaurant, Inc., filed an action alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) concerning minimum wage, overtime, gratuity retention, uniform reimbursement, and retaliation, alongside a breach of contract claim. The defendants, Jing Fong Restaurant, Inc. and six associated individuals, moved for summary judgment. The Court granted summary judgment, dismissing claims related to retaliation, uniform cleaning costs, breach of contract, and the argument that retaining banquet service charges violated NYLL § 196-d, citing New York appellate precedents. However, the motion was denied for claims alleging the illegal use of the gratuity pool to pay restaurant expenses, improper tip credit usage under federal and state law, and management interference in tip distribution. The Court found that genuine issues of material fact remained for trial on these latter points.

Fair Labor Standards Act (FLSA)New York Labor Law (NYLL)Minimum WageOvertime ViolationsGratuitiesTip PoolingService ChargesUniform ReimbursementRetaliationSummary Judgment
References
14
Case No. 2021 NY Slip Op 04349 [196 AD3d 560]
Regular Panel Decision
Jul 14, 2021

Membrives v. HHC TRS FP Portfolio, LLC

This class action was initiated by Pedro Membrives and others against HHC TRS FP Portfolio, LLC, and related entities, alleging violations of Labor Law article 6, specifically concerning sections 196-d, 12 NYCRR 146-2.18, and 12 NYCRR 146-2.19. The plaintiffs claimed that the defendants improperly retained administrative fees from catered events without adequately disclosing that these fees were not gratuities. The Supreme Court initially granted summary judgment to the plaintiffs and denied the defendants' motion to dismiss. On appeal, the Appellate Division, Second Department, modified the Supreme Court's order by denying summary judgment to the plaintiffs on the Labor Law § 196-d claim, citing a triable issue of fact regarding the plaintiffs' employee status. However, the Appellate Division affirmed the grant of summary judgment for the plaintiffs concerning the violations of 12 NYCRR 146-2.18 and 146-2.19, as the defendants failed to rebut the presumption that the administrative fees were purported gratuities and did not provide proper disclosure.

Class ActionLabor LawWage and HourGratuityAdministrative FeeEmployee StatusSummary JudgmentAppellate ReviewNYCRRHotel Industry
References
11
Case No. MISSING
Regular Panel Decision

Higgins v. Oil, Chemical & Atomic Workers International Union, Local 3-677

This lawsuit involves a contract action brought by six former employees against their union, the OCAW. The employees claimed an agreement for weekly compensation and insurance until they returned to work, which the union breached by discontinuing payments. The chancellor and Court of Appeals found a valid contract, but the Supreme Court reversed, finding no mutual assent to the contract's terms, particularly regarding the duration of payments. The court concluded that the agreement was too indefinite to be enforceable, and therefore, the payments made by the union were merely a gratuity.

Contract LawMutual AssentIndefiniteness of AgreementUnion LiabilityBreach of ContractLabor DisputeGratuitous PromiseAppellate ReviewContract InterpretationTennessee Supreme Court
References
23
Case No. 2021 NY Slip Op 02769 [195 AD3d 140]
Regular Panel Decision
May 04, 2021

Robinson v. Great Performances/Artists as Waitresses, Inc.

This class action sought unpaid gratuities under Labor Law § 196-d. The central question was whether an employer has a right to contractual indemnification from a third party for claims brought under this statute. The court determined that contractual indemnification in this context is against public policy, citing similar rulings on other labor laws like the FLSA. The Supreme Court had dismissed the third-party complaint, and this appellate decision affirmed that dismissal, stating that allowing such indemnification would undermine employers' willingness to comply with their statutory obligations.

unpaid gratuitiesLabor Lawcontractual indemnificationpublic policyemployer liabilitywage violationsFair Labor Standards Act (FLSA)third-party claimsclass actionappellate review
References
12
Case No. MISSING
Regular Panel Decision

Andruszkiewicz v. Doherty

The court confirmed the respondent's determination dated October 9, 2009, which terminated the petitioner's employment as a sanitation worker. The petition, brought pursuant to CPLR article 78, was denied and the proceeding dismissed without costs. The court found that substantial evidence, including a videotape and hearsay testimony from an investigator, supported the finding that the petitioner accepted a gratuity for collecting trade waste. The court also found no basis to disturb the administrative law judge's credibility determinations and concluded that the penalty of termination did not shock its sense of fairness.

Employment TerminationPublic Employee MisconductGratuity AcceptanceSanitation WorkerSubstantial EvidenceHearsay TestimonyCredibility DeterminationsPenalty ReviewArticle 78 ProceedingJudicial Review
References
4
Case No. MISSING
Regular Panel Decision

Fujiwara v. Sushi Yasuda Ltd.

This Memorandum & Order addresses a class action settlement in an FLSA and NYLL case against Sushi Yasuda. Plaintiffs, former wait staff, alleged unpaid minimum wages, overtime, spread of hours premiums, and gratuities. The parties reached a $2.4 million class-wide settlement, which the court grants final approval for. However, the court reduces the requested attorney's fees from $800,000 to $480,000, citing issues with inflated hourly rates and a need for greater judicial scrutiny in class action settlements. Additionally, the application for separate service awards for Class Representatives is denied, as their increased share in the settlement fund is deemed sufficient compensation.

Wage and HourFair Labor Standards Act (FLSA)New York Labor Law (NYLL)Class ActionSettlement ApprovalAttorney's FeesService AwardsJudicial ScrutinyLodestar MethodPercentage of Fund Method
References
71
Case No. MISSING
Regular Panel Decision

Barenboim v. Starbucks Corp.

In this dissenting opinion, Judge Smith argues that Labor Law § 196-d, which prohibits employers from demanding or accepting parts of employee gratuities, is inapplicable to disputes over how a common tip pool is shared among employees. The dissent contends that the statute's purpose is to prevent employers from retaining tips meant for employees, not to regulate the internal distribution of pooled tips. Drawing a distinction from federal law and referencing a similar California case, Jou Chau v Starbucks Corp., the judge concludes that extending the statute to tip pooling among employees unnecessarily complicates the law and creates avenues for excessive regulation and litigation, despite agreeing with the majority's outcome in favor of Starbucks.

tip poolingLabor Law § 196-dgratuitieswage disputesemployer responsibilityemployee rightsstatutory interpretationdissenting opinionNew York lawCalifornia Labor Code
References
3
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