I’m adding Lu v. Hawaiian Gardens to my track list. Link to the docket is here.
I’m hoping that the California Supreme Court will articulate a clear rule on tip pooling. I’m not asking for a pro-employer (or pro-employee) decision. I’m asking for a clear one. I’m aware of the justice theory arguments that oversimplified rules can be oppressive, but I think this is a sufficiently narrow area to begin with that the problem is absent—we’re not talking about failing to distinguish between manslaughter and murder just to have one and only one rule of homicide.
Lu (link to WageLaw) was the first in a series of three 2009 cases on tip pooling. It stands for the rule (or did, since it’s not uncitable) that Labor Code sections 351 and 450 contain no private right of action outside the UCL. Then there was Budrow v. Dave & Buster’s of California, Inc., which put the kibosh on the DLSE’s opinion letter an older 2AD case. And most recently, Etheridge v. Reins Int’l Calif., Inc. (link to Shaw Valenza’s great summary) which set out the “chain of service rule.”
Now, here’s the rub. The Order granting review only sets forth one issue: whether the private right of action under those statutes exists. I’m inclined to agree with WageLaw that if the tips are wages, there’s a non-UCL action for them, and just because they’re tips doesn’t change that. I agree as far as that goes. But if they aren’t yet wages, if they’re just potentially wages pursuant to an agreed upon mechanism, then we have a different question.
It’s possible that the Supreme Court can use this discussion to set out a rule about when they become wages/property, and, therefore a rule about how they become so, we might be somewhere.
I’m very unsatisfied by some of the decisions trying to say what people “intend” when they give tips. Was there survey evidence on the record on appeal? Expert psychologist testimony? Restaurant consultant testimony? Casino consultant testimony?
Personally, I’m the kind of person that tips 20% at restaurants unless something goes horribly wrong. I do that both because I like to think I’m a person that respects work harder than what I do, and because the math of 20% is easier to do in your head than 15% which may contradict the former rationale. I suppose I do that because of my encounter with the waiter. Anyway, I’m not sure what I intend is really relevant. Is it wrong for others who work to get a share? Is it even wrong for the management to get a share?
I don’t think so, not on its face, at least not enough to lay down a blanket rule against it when the statute it silent. Does a different rule lend itself to abuses? Yes. But will the old DLSE rule eliminate them? No.
That’s my longwinded $0.02. The short of it is, just give us a simple rule. The beauty of simple rules is the people who don’t want to abuse will follow it, and the people who need to face enforcement won’t.
