A Massachusetts federal court has awarded exotic dancers tips that they were unlawfully required to share with company managers. Under Massachusetts law it is impermissible for managers to share in tip pools.
United States District Court District of Massachusetts
SUMMARY: (court decision – opens in PDF)
“The Consolidated Plaintiffs, Leah Saad, Deanna Gallo, Brittany Duchaine and Sanchere Kelly (‘Plaintiffs’), have filed a Second Amended Complaint (Docket No. 71)(‘Complaint’) against JOLO, Inc. d/b/a Hurricane Betty’s (‘JOLO’), Myles O’Grady, individually (‘Myles’), and Joseph O’Grady, individually (‘Joseph’ and, together with Myles and JOLO, ‘Defendants’) alleging claims for: violation of the Massachusetts Wage Act (‘MWA’), Mass.Gen.L. ch. 149, §§148, 150 for failure to timely pay them and other similarly situated individuals their wages and overtime (Count I); violation of Mass.Gen. L. ch. 151, §§1,7 (minimum wage law), for failure to pay them and other similarly situated individuals minimum wage and overtime (Count II); violation of Mass.Gen.L. ch. 149, §152A (the Massachusetts Tips Act), for failure to allow them and other similarly situated individuals to retain their tips (Count III); violation of Mass.Gen. L. ch. 149, §148B for improperly classifying them and other similarly situated individuals as independent contractors rather than employees (Count IV); unjust enrichment and quantum meruit as the result of Defendants having improperly received and required them and other similarly situated individuals to pay house fees and share tips with non-service employees in violation of the Massachusetts Tips Act (Counts V and VI); violation of the Fair Labor Standards Act, 29 U.S.C. §201 et seq. (‘FLSA’) for failure to pay them and other similarly situated individuals minimum wage and overtime (Count VII); and violation of 26 U.S.C. §7434 for unlawful filing of IRS W-2 Tax Information Returns. …
“… The Plaintiffs have established that on this record, the Defendants’ conduct violated the Massachusetts statutory wage law scheme, and in particular, Mass.Gen.L. ch. 149, §§148 & 149 (failure to pay for work performed), Mass.Gen. L. ch. 151 §§1 & 7 (Massachusetts minimum wage law), and Mass.Gen.L. ch. 149, § 152A (the Massachusetts Tip Act). More specifically, Defendants unlawfully required Plaintiffs to pay over a portion or ‘split’ of tips they received from customers (for private/non-private dances) to Defendants’ DJ, Barrow, and security guard, [Kevin] Morgan. Defendants violated the Massachusetts Tip Act by requiring that Plaintiffs tips be shared with [Jack] Barros and Morgan, both of whom held supervisory positions. … Additionally, Defendants retained a portion or ‘split’ of the tips Plaintiffs’ received from customers for private/non-private dancers. By doing so, Defendants failed to comply with the Service Rate requirements set forth in Mass.Gen.L. ch. 151 §7 and 454 Mass. Code Regs. 27.03(2)(b), and necessarily constituted a violation of the minimum wage law, ch. 151, §1. …
“Accordingly, summary judgment shall enter in favor of the Plaintiffs on Counts I-III to the following extent: the Court finds as a matter of law that Defendants required Plaintiffs to share their tips with non ‘service employees’, that is, persons who have supervisory or managerial responsibility, including Barrow and Morgan, and Defendants unlawfully retained a portion or ‘split’ of the tips Plaintiffs’ received from customers for performing private and/or semi-private dances, thereby, violating the Mass.Gen.L. ch. 149, §§148 & 150, Mass. Gen. L. ch. 151 §§1& 7, and Mass.Gen.L. ch. 149, §152A and entitling them to unpaid wages, and statutory damages in an amount to be determined. …”