In New York, it is reported that celebrity chef Mario Batali has settled a wage-and-tip class action law suit, believed to be the largest-ever in a New York wage-and-tip suit, by agreeing to pay $5.25 million on behalf of approximately 1,100 current and former workers, including waiters, captains and other employees that accused the restaurants of illegally deducting a portion of their tips to increase profitability. The law suit alleges that at eight restaurants that Mr. Batali co-owns with Joseph Bastianich, tip-skimming was commonly practiced. The restaurateurs did not respond for comment; however lawyers on both sides stated that, "The matter has been resolved to the satisfaction of all parties."
The suit alleged that Batali and Bastianich "misappropriated" 4 to 5 percent of each shift's wine and drink sales from the workers' tip pool. It is also alleged that the restaurants' unlawful "tip credit" practice caused employees' pay to fall below minimum wage and employees were not paid extra for their shifts that were more than 10 hours in duration.
With regard to the tip pool mismanagement, Richard J. Holwell, a judge in the matter, wrote in a ruling of a bartender informing he was told that "it was a policy across the Batali restaurant group" and that the funds "went to the house." The judge noted that the explanation to employees regarding this practice was that the tip money was taken to cover expenses for wine research and to pay for damages such as broken glassware. Judge Holwell went on to write that at a staff meeting, one of the executives "refused to justify the policy and said it was not going to change."
Other similar law suits have been filed recently, alleging that famous chefs and restaurants violated labor laws in New York and other locations. According to the filing, the settlement defines employees that are eligible to be included as any employee who worked at the restaurants as "captains, servers, waiters, bussers, back waiters, bartenders and/or barbacks from July 22, 2004 to Feb. 14, 2012."
The filing explains that, "Class members will receive a proportional share of the fund based on the number of hours they worked, the restaurant at which they worked, the percentage of total tips received during their employment, and whether they opted in to the collective."
Mr. Bastianich, who is the son of Lidia Bastianich, a featured cooking instructor on Public television, was also accused of encouraging employees at the Italian restaurant, Babbo, to retaliate against employees and named plaintiffs for filing the law suit. There are 10 named plaintiffs in the lawsuit and since the case was certified last year as a class-action case, 117 people have joined the case.
In a quote published last year by The Post, Bastianich said that he and Batali would not open another restaurant in New York, saying: "Money-hungry lawyers, through frivolous lawsuits, are shaking down the very foundation of Manhattan's restaurant industry."
Mario Batali, Partner to Fork Over $5.25M to Waiters in Tip Dispute, by Bruce Golding, New York Post, March 7, 2012.
Mario Batali Agrees to $5.25 Million Settlement Over Employee Tips, by BENJAMIN WEISER, New York Times, March 7, 2012.