Following a bench trial, Judge Aleta A. Trauger of the Middle District of Tennessee has ruled that bouncers at various Coyote Ugly saloons sufficiently interacted with saloon guests to validate their sharing in the tip pool. Stewart, et al. v. CUS Nashville, LLC, et al., M.D. Tenn., No. 11-cv-00342, 8/8/13.

In Stewart, Plaintiffs consisted of a putative class of bartenders, barbacks and waitresses, with the lead Plaintiffs alleging that that group was unlawfully required to share tips with bouncers. Plaintiffs alleged the bouncers simply screened patrons and provided outdoor security, but had no true service-related interaction with customers. While acknowledging that those were duties of the bouncers, the Court ruled that Coyote Ugly’s security guards “are expected to, and do, in fact, play a prominent role in enhancing the customer experience.” The Court cited the following duties, among others, supporting this customer-interaction finding:

·         Attempts to “grab potential customers’ attention when ‘barking’” in an effort to attract patrons;

·         Greeting customers; and

·         Dancing with customers, participating in games, and helping them on and off of Coyote Ugly’s infamous bar.

Because these findings established “more than de minimis interaction with customers,” the court held that the bouncers were eligible to participate in the Coyote Ugly tip pool under the Sixth Circuit’s widely-cited precedent in Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.2d 294 (6th Cir. 1998).

Stewart is an encouraging decision for hospitality employers, in that it bolsters the practical, common sense “interaction” test set forth in Kilgore. Industry employers, however, must continue to analyze their tip splitting arrangements under applicable federal and state law.