West Ashley restaurants sued over tip out schemes

(Alan Hawes/Staff) 7/16/03

Two West Ashley restaurants are being sued for allegedly requiring employees to share their tips with owners and managers.

Attorney Marybeth Mullaney, who filed the separate suits against Gene’s Haufbrau and Bear E. Patch Café-West, says, “A tip is presented by a customer in recognition of some service performed by the server that waited on the customer: It is not meant as a gift to the business owner.”

Under federal law, tips are the sole property of the employee. In order for a tip pool to be considered legal, it must be restricted to “employees who customarily and regularly receive tips, such as waiters, waitresses, bussers and service bartenders.”

When reached by phone, Bear E. Patch’s owner John Hawes couldn’t immediately recall his attorney’s name; he didn’t return a follow-up call. Jason Stalker and Liam Tyrrell of Gene’s Haufbrau are being represented by Allan Holmes.

Holmes declined to speak about the details of the case, but suggested it’s not clear that managers can’t participate in tip pools. According to Holmes, courts have found that low-level managers who don’t qualify as employers – a designation based partly on the authority to set schedules; keep records and hire and fire employees -- are eligible to receive tips when performing tasks that are usually tipped, such as mixing drinks.

“The question under the law is whether the service bartender is the ‘employer,’” Holmes says. “Needless to say that question is answered differently by different courts.”

The lawsuit claims Stalker, the bar’s owner, and Tyrrell, its general manager, each bartended or barbacked about four or five shifts a week. When they worked, servers were required to pay them a percentage of their gross alcohol sales.

A similar arrangement was allegedly in place at Bear E. Patch-West, where the owners and general managers charged the servers’ tip pool $60 or more every time they worked the cash register.

“In these cases, my clients came to me because the owners were regularly taking a substantial amount of their tips,” Mullaney says. “When you are paid less than minimum wage and rely upon tips to earn your living, this can be financially devastating.”