Duff on Hospitality Law

Fourteen lawsuits were filed last week against employers at the Seattle-Tacoma International Airport for paying less than the $15 minimum wage approved by Sea-Tac voters in 2013. Defendants include baggage handling firms, rental car agencies, food-service establishments and logistics firms. These lawsuits have been filed by defendants represented by Attorney Duncan Turner of Badgley Mullins Turner and seek class action status. The lawsuits currently cover about 40 plaintiffs, although Mr. Turner estimates this could grow to 1,500 plaintiffs and that total back-pay sought could be $14 to $21 million.

Alaska Airlines and three other plaintiffs had filed a lawsuit arguing that the Sea-Tac minimum wage should not apply to the airport. The State Supreme Court ruled against them in August, 2015, and in December, 2015 rejected a request to review the case.

If you have any questions about these lawsuits, would like to review a copy of one of the complaints, or would like to discuss applicable wage & hour issues, please feel free to contact Greg Duff.

In the latest of a series of twists and turns regarding the legality of certain tip pools in Western states, on February 23, 2016, a divided three judge panel of the Ninth Circuit Court of Appeals validated regulations by the Department of Labor (“DOL”) that significantly limit employers’ ability to have tip pools that include more than “customarily and regularly tipped” employees. This development means that employers operating in states or territories in the Ninth Circuit (covering Washington, Oregon, Alaska, Idaho, Montana, Nevada, California, Arizona, Hawaii, Guam, and the Northern Mariana Islands) cannot include in their tip pools “back of the house” employees (such as cooks or dishwashers) or other employees who are not customarily tipped. We examine the impact of and history behind this decision below.

In a recent blog post, we highlighted the trend amongst hoteliers and restaurateurs toward adopting service charge models to meet the rise in state and local minimum wage requirements. Although “no-tip” and “service charge” policies are receiving their fair share of attention in the news, employers with improperly designed tip pools are garnering their own headlines—and lawsuits. For example, Red Robin recently agreed to a $1.3 million settlement in response to class action claims against the company that it impermissibly included back of house kitchen staff in the servers’ tip pool. If your company requires employees to pool their tips, or is considering doing so, it will want to avoid some common and costly pitfalls that have beleaguered others. For starters: