Chili's Waiters and Waitresses Win Appeal over Tip Sharing

A Big Win for Tipped Employees / Chili's Got "Served"

The 5th Circuit Court of Appeals just upheld a jury verdict in favor of 55 Chili’s Restaurant waiters and waitresses who claimed they were forced to share their tips with “expediters” or “Quality Assurance” workers who were not legally eligible to share in a tip pool. The appeal was argued by our good friend and overtime / wage and hour law guru, Richard “Rex” Burch of Bruckner Burch. Congratulations to Rex on a resounding victory for his clients and all the hard-working men and women who rely on tips to support themselves and their families.

The federal wage laws allow employers to pay less than minimum wage to employees who “customarily and regularly receive tips” so long as all tips received by a tipped employee are retained by the employee. There is, however, an exception that allows the pooling of tips among those employees who customarily and regularly receive tips. The waiters and waitresses in this case alleged that they did not retain all of their tips because they were forced to pool their tips with employees who did not customarily and regularly receive tips. A company memo discovered during the litigation acknowledges that “QA positions (with little to no customer interaction), dishwashers, cooks, and janitors” were “occupations that would invalidate a tip pool.”The jury trial focused on Brinker’s defense that QAs were entitled to share in a mandatory tip pool. The jury found that Brinker had not proven “that QAs/Expos work in positions or an occupation that customarily and regularly receive tips. Customarily, front-of-the-house staff like servers, busboys and bartenders receive tips. Back-of-the-house staff like cooks, salad preparers and dishwashers do not, and thus cannot participate in a mandatory tip pool. Direct customer interaction is one of the factors distinguishing these two categories of workers.

On a final note, the appellate court reviewed the award of attorney’s fees given to the lawyers for the plaintiffs and decided that it was reasonable.

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