In cases challenging participation of food service workers other than the quintessential roles with which most diners are familiar (e.g., server/waiter, busboy, etc.) in tip sharing/pooling/splitting arrangements, some courts focus on whether the position lacked sufficient direct customer interaction to warrant receipt of tips. See generally Kilgore v. Outback Steakhouse, 160 F.3d 294, 301 (6th Cir. 1998). In Etheridge v. Reins Internat. California, Inc., 172 Cal. App. 4th 908 (Cal. App. 2d Dist. 2009), California appellate Justice H. Walter Croskey addressed a claim brought pursuant to California Labor Code § 351 challenging the tip pool participation of dishwashers and kitchen staff. Acknowledging distinctions between the California Labor Code’s regulation of tip pooling and the FLSA, the judge rejected the claim that the employees should not have shared in tips, and observed that such industry employees “are encouraged to give their best possible service as they know they will participate in the financial rewards if the customers are pleased with their work, even though the customers do not personally see them doing it.”
Since that time, concepts similar to this “chain of service” analysis (which one can envision being a favorite of economics-minded judges such as Seventh Circuit Justice Richard Posner) has been taken up by a handful of courts. Turner v. Millennium Park Joint Venture, LLC, 2011 U.S. Dist. LEXIS 22295 (N.D. Ill. Mar. 7, 2011)(upholding inclusions of silverware roller in tip pool under FLSA because “employees receiving tips directly from customers may agree to share tips when they believe that the employees with whom they share help them to serve the customers better and more fully and thus to obtain additional tips and sweeten the pot for everyone”).
“Many if not most hospitality professionals believe in chain of service not in terms of a legal defense to wage-and-hour claims, but as a key component of successful operations,” observes Jackson Lewis Shareholder and industry expert Paul DeCamp. Indeed, popular culture, as demonstrated by the influx of restaurant renovation shows on the Food Network and Cooking Channel, now focuses its attention on the provision of these services and improvement of the customer experience. Counsel and industry employers must continue to assert the viability of this doctrine at every opportunity.