Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

130 | Massachusetts Wage & Hour Peculiarities, 2022 ed. © 2022 Seyfarth Shaw LLP reasonable expectations. Several courts have held that where a banquet menu clearly lists additional flat fees separate from gratuities, no reasonable patron would expect those fees to be remitted to wait staff in lieu of or in addition to a tip. 738 The Tip Statute permits an employer to retain “administrative” or “house” fees charged to customers, if “the employer provides a designation or written description of that house or administrative fee, which informs the patron that the fee does not represent a tip or service charge for [covered employees].” 739 The SJC held in Hovagimian that this safe harbor does not apply when customer invoices referred to the fee as a service charge, despite that the event contracts referred to the fee as an administrative fee. 740 In addition, the Massachusetts Appeals Court has interpreted this provision to mean that even where a charge is labeled “administrative fee,” the employer still must provide an explicit disclaimer notifying customers that the fee is not a service charge in order to avoid liability. 741 Thus, simply indicating that a fee is a house fee or an administrative fee is not sufficient to distinguish it from a service charge. 742 B. The Sharing of Tips and Service Charges While the prior iterations of the Tip Statute have been interpreted as protecting only those employees whose “primary duty is to engage in the service of food and beverage,” 743 the law as established three categories of employees who are eligible to share in tips and service charges: • A wait staff employee, defined as “a person, including a waiter, waitress, bus person, person in a quick service restaurant who prepares or serves food or beverages as part of a team of counter staff or any other counter employee who: (i) serves beverages or 738 See DePina v. Marriott Int’l, Inc. , No. SUCV2003-5434-G, at 17 (Mass. Super. Ct . July 28, 2009) (Henry, J.) (“plaintiffs have no reasonable expectat ion of proving that the failure to include stat ion fees in the service charge pool violated the [T ip Statute]” where stat ion fees were listed on checks as “separate and dist inct from the percentage based service charge”). 739 M.G.L. ch. 149, § 152A(d); see also Lazo v. Sodexo, Inc. , 2018 WL 4696740, at *4 (D. Mass. Sept . 28, 2018), aff’d , 931 F.3d 29 (1st Cir. 2019) (fee qualified as administ rat ive fee and not service fee where explanat ion on invoices explicit ly stated the charge was not a gratuity and was not remit ted to employees).. 740 488 Mass. at 246-47. 741 Bednark v. Catania Hospitality Grp., Inc. , 78 Mass. App. Ct . 806, 815-17 (2011) (holding “administ rat ive fee” label “neither indicates whether all or any part of the fee is . . . a gratuity nor necessarily comport s with customer expectat ions”). 742 Court s have disagreed as to the precise language an employer must use to inform customers that an “administ rative” or “house” fee is not a t ip or service charge. In DiFiore v. American Airlines, Inc. , the federal Dist rict Court for the Dist rict of Massachuset t s held that despite several signs posted adjacent to bag-check podiums that read “U.S. Domest ic Flight s: $2 per bag. Gratuity not included,” a reasonable passenger could have thought the two dollar fee was given to airline skycaps as a t ip. 561 F. Supp. 2d 131, 136 (D. Mass. 2008), cert ified quest ion answered, 454 Mass. 486 (2009). Similarly, in Carpaneda v. Domino’s Pizza, Inc. , Domino’s Pizza charged customers a $2.50 “delivery charge,” that Domino’s did not give to delivery drivers. 991 F. Supp. 2d 270, 271 (D. Mass. 2014). When a customer placed an order online, Domino’s provided a disclaimer at the bot tom of the page that provided that the delivery charge did not const itute a t ip. Id. at 272. The court deniedDomino’s Pizza’s mot ion to dismiss and found that , despite the disclaimer, a reasonable customer could interpret the delivery charge as a t ip. Id. at 274. In Lazo v. Sodexo, Inc. , an invoice list ing a “StaffingCharge” or “Support Charge” that was accompanied by language stat ing the fee was “not a gratuity” and then amended to also include language stat ing that the fee “does not represent a t ip or service charge paid direct ly to wait staff, employees or bartenders,” was sufficient to indicate that the fee was not a service charge. Lazo v. Sodexo, Inc., 2018 WL 4696740, at *4 (D. Mass. Sept . 28, 2018). 743 See, e.g. , Williamson , 2004 WL 1050582, at *11.