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Best of Liz Benston

Gaming Guru

Liz Benston

Starbucks tips case gives hope to dealers

26 March 2008

LAS VEGAS, Nevada -- Serving coffee is a lot different from dealing cards. But not to casino dealers in Las Vegas, who are cheering a landmark ruling last week by a California court against a tip-sharing policy at Starbucks they hope will build public support for a similar lawsuit filed by dealers at Wynn Las Vegas.

Despite the similarities between the two lawsuits, the case underscores significant differences between the legal landscape in California and Nevada, a state with nearly 30 years of case law supporting casino employers in tip disputes.

For Wynn dealers, the Starbucks decision is a ray of hope in an uphill, 18-month legal battle attempting to reverse a casino policy of splitting dealer tips with supervisors. That policy costs dealers at least 15 percent of their tips — most of their total pay, which before the new policy could reach more than $80,000 a year.

The lawsuit is part of a multiprong strategy by Wynn dealers, who also voted to be represented by the Transport Workers Union and filed a state ballot initiative to fight the policy. Nevada's labor commissioner is expected to rule on the matter this year after a state court determined that, absent a formal decision by the agency, the courts had no authority to hear the case.

"Our whole point was this wasn't about a bunch of spoiled dealers at a high-end property but the principle of the thing," said Kanie Kastroll, a Wynn dealer and union organizer.

"Maybe people don't understand what we do but they understand the barista who makes their coffee just the way they like it every morning, with a smile. This (tip dispute) could happen to someone who makes less money and with less to spare. It's like a light has been turned on and people now will get it."

Wynn dealers argue the casino's tip-sharing policy violates Nevada law, which prevents employers from taking tips belonging to workers. In an attempt to fend off the Transport Workers the eve of the union vote, casino boss Steve Wynn admitted to dealers that the policy was a mistake. But he continues to defend the policy, joining a lawsuit against the ballot initiative and refusing to abandon the tip-sharing plan in contract negotiations with dealers.

Wynn says he isn't confiscating worker tips but merely splitting them with supervisors who work alongside dealers and therefore deserve a share of tips. But dealers say Wynn is using the tips to supplement supervisors' salaries.

In the California case against Starbucks, the coffee giant argued that supervisors are entitled to share in the tips because they often make and serve drinks alongside the workers they manage. It would be unfair, the company said, to deny tips to workers who also serve customers.

The former barista who filed suit against Starbucks said having shift supervisors share in the tip pool helped the company offset labor costs.

Kastroll says dealers appear to have the stronger of the two cases because Wynn's floor supervisors, recast as "team leaders" after the policy was implemented, don't deal and therefore don't typically receive tips, which are intended for dealers rather than for the supervisors who oversee the games.

Wynn attorney Gregory Kamer says that's unfair to the team leaders, who greet returning players and make sure their cocktail glasses are filled, among other tasks.

The Starbucks case highlights California's four decades-old tip law, which states that employers as well as "agents" of the employer who manage or supervise employees can't share in workers' tips. This definition proved critical in the case, as a San Diego Superior Court judge said the tip-sharing was illegal because Starbucks supervisors were considered agents. Starbucks plans to appeal.

By comparison, Nevada's tip statute doesn't contain any specific references to supervisors, instead stating that "it is unlawful for any person to take all or part of any tips or gratuities bestowed upon his employees."

For more than a year, attorneys for both sides have hotly debated the meaning of "person" and "take" — especially in light of the fact that Wynn dealers no longer count or account for their own tips, contrary to the common practice in the casino industry.

Wynn's attorneys say the law should be interpreted in the context of federal and state court decisions that permit employers to create tip pools among workers and supervisors.

One federal court concluded in 1975 that casino "floormen" also are entitled to tips and that "a tip or gratuity need not be considered a personal donation to the employee receiving it ... There is no reason to suppose that the last person in a service line is the only one entitled to share in the customer's bounty." The Ninth Circuit Court of Appeals in 1977 affirmed the Moen v. International Hotel decision, a key part of Wynn's defense.

Dealers dismiss the decision, saying it overstepped the scope of the case, brought by a dealer who refused to pool tips with fellow dealers.

California courts are widely thought to be more liberal and worker-friendly than Nevada's, which are more pro-employer. And yet, the question of tipping out supervisors — even in California — seems far from decided.

The practice of sharing dealer tips with supervisors in California card rooms has spawned several lawsuits in recent years that have resulted in settlements for dealers. Other cases are in litigation, including one in which a court decided that floor managers could receive tips but that shift managers, who oversee the floormen, could not.

As recently as 2005, California's labor commissioner issued an opinion to the Commerce Casino Club near downtown Los Angeles permitting the casino's policy of sharing tips with supervisors.

Kamer says the Wynn dealers' argument is self-serving.

"They say, 'It's all about me' when it's all about the enterprise and the entire experience," he said. "And Nevada law, in a state that's very attuned to service, has long recognized that there's a chain of service and that all workers should share in the bounty."

Kastroll said dealers deserve every dollar that players push across their tables.

"We dealers spend more one-on-one time with players than anyone in the hotel," she said. "We tell them about shows and restaurants. We tell them to keep their chin up if they have a bad streak. Wynn created this palace for high-rollers. But if our service slipped, they'd leave and go across the street."