Most waiters and baristas consider tips, whether added to a check or tucked into a jar near the cash register, to be an important part of their compensation. So important, in fact, that at least three Minnesota businesses are facing class action lawsuits over forcing workers to pool tips and give managers a cut.
The most recent, filed in May against Caribou Coffee in Beltrami County, alleges the locally based specialty coffee giant violated state labor laws with its policy of employees combining tips and sharing them with managers.
Minneapolis-based Nichols, Kaster and Anderson has filed two lawsuits involving tipping. The firm first filed suit in December against Schiek's Palace Royale, a downtown Minneapolis strip club, where owners allegedly skimmed two out of every 20 "dance dollar" tips from dancers, bartenders and other employees.
The firm filed suit in March against Starbucks in Washington County for similar mandatory tip-pooling practices as the Caribou case. That suit came a week after a California judge ordered Starbucks to pay more than $100 million in back tips to its baristas.
Troy Poetz of St. Cloud-based Rajkowski Hansmeier Ltd., who filed the Caribou lawsuit, currently represents one former employee, Lindsey Savage, but is trying to get it certified as a class action.
Savage, who declined to comment, worked for two Caribou locations in 2005 and 2006, one in Bemidji and one in Minneapolis. Poetz estimated the Caribou team members make about $1.70 per hour in tips -- a significant addition to their hourly wage of $7 or $8.
Caribou employees were required to combine their tips at the end of each shift, according to the complaint. Shift supervisors and store managers who took shares from the tips were in direct violation of state law, the lawsuit said.
"It all comes down to the fact that it's that employee's money," Poetz said in an interview. "Minnesota law has a specific provision which is to protect that employee."
Lawyers for Caribou at Dorsey Whitney law firm in Minneapolis declined to comment on the case.
"We intend to vigorously defend ourselves in this matter," Caribou spokeswoman Lauren Mihajlov said in an e-mailed statement, but would not offer further comments on the case.
The law in question, the Fair Labor Standards Act, is "a law that many employers have been slow to respond to" in the 35 years since it was passed in 1973, said Minneapolis-based labor and employment lawyer Andrew Parker.
"Fair Labor Standards Act claims are one of the fastest growing employment related claims nationally," he said, citing large court decisions like the recent Minnesota-based lawsuit against Wal-Mart Stores Inc.
The cases have been on the rise, Parker said, because employees' rights advocates are increasingly following high-profile lawsuits.
Poetz said the tip statute is one that's very easy for businesses to violate because "most employees don't know their rights."
The violations could easily be happening in any number of service industries, such as restaurants and hotels, he said.
"We think the law is pretty clear on it," Poetz said. "And we're hoping a judge or jury will see it the same way."
Emma L. Carew • 612-673-7405