Cafe Gratitude Says It's Closing Over a Tip Pooling Lawsuit. Is Pooling Tips Even Legal?

The blowup of the Cafe Gratitude empire, yesterday's biggest food-news story, was ostensibly brought on by the owners' response to several lawsuits that waiters have filed over the restaurants' tip-pooling policies. In recent months, several nationally renowned New York restaurants have also been hit with lawsuits over tip pooling.

Is tip pooling even legal in California? SFoodie posed that question to several San Francisco attorneys specializing in employment law.

The answer, in brief, is yes. Matt Marca, a labor employment lawyer with the San Francisco office of Littler, which is representing Cafe Gratitude,* told SFoodie that California state courts first ruled in 1990 that tip pooling is legal among staff who provide direct service to customers — waiters, bussers, bartenders. 

In 2009, the California Appellate Court ruled in Etheridge v. Reins International that the pool could be expanded to include anyone in the chain of service. “The court took a pragmatic look at service,” Marca explains. “The restaurant doesn't know everything that goes into a tip that a customer gives for service. When you talk to a maitre d' and he's unpleasant, maybe you leave less of a tip. Maybe he's nice to you and you leave a better tip. If you sat down, and your waiter was wonderful but the food was horrible, maybe you left less of a tip, and the kitchen's the issue. Maybe your plate arrives and the food is wonderful and the service is great, but the plate had leftover food from the last meal on it, so you're not going to leave as good a tip. That's the dishwasher's fault.” 

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