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Battle on tip sharing on tap

30 September 2008

LAS VEGAS, Nevada -- Nineteen former employees of the Hofbrauhaus Las Vegas are suing the owners over a tip-pool arrangement they claim violates the federal Fair Labor Standards Act.

The lawsuit, filed in the U.S. District Court of Nevada, claims servers, busboys, food runners and bartenders of the German beer hall were forced "to participate in an invalid tip pool" that paid gratuities to company managers who kept a "substantial portion" for themselves and distributed other parts of the pool to workers "who do not customarily" receive tips.

The remaining funds were then distributed to the plaintiffs and their co-workers, the lawsuit alleges.

A breakdown of how the gratuities were distributed by percentage was not described in the lawsuit.

The lawsuit, which seeks class action status, is asking for an undisclosed amount in compensation for unpaid wages, compensatory damages and punitive damages.

Hofbrauhaus Las Vegas founder and managing partner Stefan Gastager could not be reached for comment Monday.

Lani Esteban-Trinidad, the local attorney for the workers, said the group asked Nevada Labor Commissioner Michael Tanchek to pursue the case before filing the lawsuit, but he declined.

Tanchek said his denial of the plaintiffs' complaint was a procedural step necessary for the lawsuit to be filed.

"They want to take it to court, and I didn't want to get in the way," said Tanchek, who said his office wanted to determine if the plaintiffs could afford an attorney.

In addition to the allegations about how the tip pool was divided, the lawsuit claims that the Hofbrauhaus, which is at Paradise Road and Harmon Avenue, lowered the plaintiffs' base pay below the federal minimum wage, then applied a tip credit to make up the difference, a practice prohibited by state law.

Service charges applied to patrons' bills misappropriated the workers' tips, the lawsuit charges, because the fees were not reported to the government as part of the company's receipts.

Additionally, the money did not show up on the plaintiffs' W-2 forms as wages.

New York-based labor attorney Steven Bennett Blau is assisting Esteban-Trinidad on the lawsuit.

A similar lawsuit was filed two years ago against Wynn Las Vegas over the company's tip-pooling plan. That lawsuit has been in limbo since the spring.

The seven-member Supreme Court heard arguments April 8 from attorneys for the resort and the two dealers who sued the property after it changed its tip-pooling policy in September 2006.

The appeal was filed after District Court Judge Douglas Herndon rejected arguments that the hotel-casino's dealers are contract employees and that the new policy, which reclassified some supervisors and allowed them to share some of the tip money that had been given exclusively to dealers in the past, illegally changed employment agreements.

The justices could uphold Herndon's dismissal of the lawsuit, which was brought by dealers Daniel Baldonado and Joseph Cesarz, or they could overturn the lower court decision. The justices could also send the dispute to the labor commissioner to resolve.

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