Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

On August 8, 2010, in Lu v. Hawaiian Gardens Casino (pdf), the California Supreme Court held that employees do not have a private right of action under Labor Code § 351 to pursue remedies for misappropriated tips. The decision does not, however, address whether or not a cause of action for unfair competition may be predicated on Labor Code § 351, leaving employers exposed to unfair competition law (UCL) claims for providing tips to “agents” of the employer.

While the decision finally puts to rest the issue of whether the Legislature created a private cause of action under Labor Code § 351, employers should still carefully review their tip pooling policies. As a practical matter, this decision does not prevent employees from filing suit alleging a UCL cause of action based on Labor Code § 351. For a detailed discussion of this decision, please see Littler ASAP, “California Supreme Court Rejects Employees Right to Sue for Misappropriated Tips But Unfair Competition Law Cause of Action Remains" by Matthew Marca and Guissu Raffat.

This entry was written by Matthew Marca.

Photo credit: Thomas_EyeDesign

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The Nevada Labor Commissioner announced that, effective July 1, 2010, Nevada’s minimum wage increased as follows:

• Employers not offering qualifying health insurance benefits must pay employees a minimum wage rate of $8.25 per hour (up from $7.55 per hour).
• Employers offering qualifying health insurance benefits must pay employees a minimum wage rate of at least $7.25 per hour (increased from $6.55 per hour).

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On September 9, 2009, the California Supreme Court declined to review an appellate court order reversing an $86 million trial award against Starbucks. As discussed in detail in our earlier blog entry, in Jou Chau v. Starbucks Corporation, the court of appeal reversed the trial court's award to a certified class of Starbucks "baristas" who had challenged Starbucks’ tip policy on the ground that certain service employees, known as “shift supervisors,” had improperly shared in the customer tips left in a collective tip box. Since a denial of review by the California Supreme Court is done without comment, it is hard to predict what this means for other tip pooling cases. However, it is important to remember that the appellate court made a clear distinction between a collective tip box and service companies that pool tips. According to the appellate court, the Starbucks policy passed muster because (1) “shift supervisors” were part of the “team” of employees who provided service to the customers (along with baristas) and (2) a collective tip box was used.

 This blog entry was authored by Matthew Marca.

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