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Banquet Servers Disappointed by SDNY Ruling Depriving Them Of Tips

Recently, a federal district judge in the Southern District of New York dismissed a class action lawsuit, Bejjani et al v. Manhattan Sheraton Corporation et al, brought by banquet servers against the Sheraton Hotel in Manhattan and the New York Hotel & Motel Trades Council.  According to these servers, the hotel and the union conspired to prevent them from receiving the gratuities and other terms of employment promised to banquet staff in a previous legal settlement agreement.

Within this 2008 agreement, the hotel agreed to pay each banquet server a total of $47,000 dollars for issues arising from prior “outstanding banquet issues,” like an invalid tip pool policy.  Once the settlement was approved, the servers released the hotel from all claims, including those that were and could have been asserted.

However, during the settlement proceedings, the hotel and the union entered into an agreement with the hotel’s restaurant which could have significantly changed the value of the 2008 settlement. The terms of the Adour agreement gave full banquet rights to the hotel’s a la carte restaurant, Adour, while exempting it from the hotel’s banquet pay rates and gratuity policies. This meant that the hotel could host banquet events in the Adour restaurant without having to pay higher banquet rates and gratuities required by the Omnibus agreement. In their allegations, the servers state that they did not become aware of the Adour agreement until 2012 and were therefore mislead by the hotel and union before finalizing the 2008 Omnibus agreement.

In his order, Judge J. Paul Oetken dismissed the case against the hotel and union stating that the servers had failed to establish how they were “mutually aggrieved” by the Omnibus agreement, how or why the hotel and union conspired to harm them, and how the hotel and union “departed from the standard obligations of negotiation and agreement” required by Federal and New York Labor Laws.   Additionally, Judge Oetken explained that the Omnibus agreement did not protect the servers from any “future reduction in benefits,” and was therefore not breached by the Adour agreement.

Here is one major tip: if you are a restaurant worker in Brooklyn or New York City, make sure that you know the terms of your employer’s agreement with its server workforce regrading tip pooling, banquet gratuities and any other wage payment arrangements.  As with the banquet servers in Bejjani, failing to understand your rights could cost you the ability to recover your wages which, in this case, was an enormous amount.  If you believe that your employer is not paying you the wages that you are lawfully entitled to, contact an attorney who specializes in wage and hour laws.

Christopher Davis is an experienced employment litigator specializing in class actions, overtime wage recovery, discrimination, whistleblower retaliation, and Wall Street bonus disputes. Before entering private practice, Mr. Davis served as an Assistant District Attorney in the Manhattan District Attorney's Office where he prosecuted violent crimes as a member of the Sex Crimes Unit.