Leighton v. Old Heidelberg, Ltd.

• Decision Date: 24 April 1990
• Docket Number: No. B045636,B045636
• Citation: 219 Cal.App.3d 1062,268 Cal.Rptr. 647
• Court: California Court of Appeals Court of Appeals
• Parties: , 58 USLW 2657 Marilena LEIGHTON, Plaintiff and Appellant, v. OLD HEIDELBERG, LTD., Defendant and Respondent.

Page 647

268 Cal.Rptr. 647

219 Cal.App.3d 1062, 58 USLW 2657

Marilena LEIGHTON, Plaintiff and Appellant, v. OLD HEIDELBERG, LTD., Defendant and Respondent.

No. B045636.

Court of Appeal, Second District, Division 7, California.

April 24, 1990.

[219 Cal.App.3d 1064] Dennis F. Moss, for plaintiff and appellant.

Robert S. Wolfe, John A. Marder, and Morris, Polich & Purdy, for defendant and respondent.

LILLIE, Presiding Justice.

Plaintiff sued defendant Hoppe's Old Heidelberg Restaurant in the municipal court for damages for wrongful discharge alleging she was fired from her employment as a waitress for refusing to share her tips with the busboys; breach of the covenant of good faith and fair dealing, based on the same facts; unpaid split shift premiums (California Industrial Welfare Commission Wage Orders) and attorney's fees (Lab.Code, § 218.5); and repayment of all monies paid by her to busboys and bartenders under an employer-mandated tip pooling arrangement. On defendant's motion, summary judgment in favor of defendant and against plaintiff was entered. The judgment was affirmed by the Appellate Department of the Superior Court which certified its opinion for publication. We deemed the issue of the legality of employer-mandated tip pooling among employees to be of statewide importance and issued an order transferring the cause to this court. (Cal. Rules of Court, rule 62(a).)

MOTION FOR SUMMARY JUDGMENT

The following facts were undisputed: Plaintiff was hired as a waitress by defendant restaurant in August, 1984, and terminated on February 14, 1987 for refusing to pool her tips with the busboys; she worked split shifts--lunch (11 a.m.-2 p.m.) and dinner (6 p.m.-10 p.m.); between shifts, she did not work and went home. Plaintiff was told when she was hired that she must share her tips with the busboys, and the general procedure was that she share the tips with the busboy who works the same tables on which she waits; she refused to automatically pay the busboys 15 percent; she had no written agreements or contracts regarding her employment with defendant.

In support of its motion, defendant submitted a portion of plaintiff's deposition taken August 16, 1988, and copy of Determination of California Office of Administrative Law (1987 AOL Determination No. 4 [docket No. 86-010] ).

On deposition plaintiff testified that after she was hired in August 1984 she worked the first couple of months at night, then started working lunch and dinner; she did not work in the hours between; such shifts are known in the restaurant business as split shifts; she went home between 2 p.m. and 6 p.m.; while working at the restaurant, she remembered talking about the split shift but did not recall if she signed any document concerning it; shown the affidavit signed by her under penalty of perjury, and asked if she recognized it, she answered, "I really don't know exactly. I don't remember, I don't remember it," then admitted she recognized her signature at the end but, asked if she signed it, said, "I didn't say that, I just don't remember." Further, she testified that when she was hired, the manager told her she was required to share her tips with the busboys, and explained one of the procedures was that the waitresses had to pool their tips with the busboys; on February 14, 1987 she refused to do so.

The following affidavit was signed by appellant:

"TO WHOM IT MAY CONCERN

"I am employed as a waitress by Hoppe Enterprises, Inc., dba Old Heidelberg at 13726 Oxnard Street, Van Nuys, California 91411.

"Under the penalty of perjury, I state, that my services as a waitress are available to the Old Heidelberg only during their luncheon and/or dinner business and not during any hours falling between those two periods.

"Obligations to my family and other personal commitments prevent me from working at the Restaurant during any of the afternoon hours. By limiting my working hours in that manner, I am able to earn adequate compensation during hours of my choice and at my convenience."

In opposition to motion for summary judgment, plaintiff submitted her declaration, and a statement signed by defendant for the Office of Unemployment.

In her declaration, plaintiff stated that shortly after she was hired, defendant presented her with the affidavit and told her to sign it; she signed it because, "I did not want to make waves"; she did not know at the time that she would be entitled to extra pay if she worked split shifts, and she was available to work between shifts even though she signed the affidavit, and when the owner asked her to work during that period, she did; the restaurant did not require a full complement of waitresses between lunch and dinner, and she signed the affidavit for the restaurant's convenience. She further stated in her declaration that when she was hired, and throughout her employment she was told to give 15 percent of her tips to the busboys and 5 percent to the bartender; she complied to keep her job; she felt the tips were hers to do with as she pleased and it was the responsibility of management to pay bartenders and busboys; on February 14, 1987, she felt the "busboys were not nearly as helpful or cooperative as [she] felt they should be" and refused to share her tips with them that day; she was suspended for 10 days; when she returned to work she was asked by management if she would comply with their tip requirements, and when she indicated she might if the busboys did their job, she was fired.

In a statement to the Unemployment Office regarding plaintiff's termination, defendant stated that plaintiff well knew that tip pooling was a "house rule and is with nearly all Restaurants"; she refused to pay the busboy 15 percent of the tip and he was going to quit because of it; management requested she pay the busboy and she refused; she was suspended for a week; when she returned, her attitude was unchanged and she would give no tips to the busboy unless he gave her special attention; she was discharged because she gave less than first class service and was insubordinate and uncooperative.

I EMPLOYER-MANDATED TIP POOLING NOT PROHIBITED BY SECTION 351, LABOR CODE

Plaintiff contends there is a triable issue of material fact as to whether or not she was wrongfully discharged, thus the judgment must be reversed. However, we perceive only a question of law, for her wrongful termination suit can succeed only if employer-mandated tip pooling among employees is prohibited by section 351, Labor Code.

No reported California judicial decision has interpreted section 351 to apply its prohibitions to employer-mandated tip pooling. Industrial Welfare Com. v. Superior Court, 27 Cal.3d 690, 166 Cal.Rptr. 331, 613 P.2d 579 and Henning v. Industrial Welfare Com., 46 Cal.3d 1262, 252 Cal.Rptr. 278, 762 P.2d 442 detail the legislative history of section 351 and deal with the matter of subminimum wage, but neither case addresses the issue. While the language of the statute expressly prohibits various employer practices, there is no mention therein of employer-mandated tip pooling, or of any kind of tip pooling among employees. Tip pooling has been around for a long time, as has section 351, and had the Legislature intended to prohibit The Legislature expressly provided ¹ that no employer shall "collect, take, or receive" any part of a gratuity left for an employee by a patron or engage in certain other enumerated practices, declaring each such gratuity to be the "sole property" of the "employee or employees" for whom it was left. The purpose of section 351, as spelled out in the language of the statute, is to prevent an employer from collecting, taking or receiving gratuity income or any part thereof, as his own as part of his daily gross receipts, from deducting from an employee's wages any amount on account of such gratuity, and from requiring an employee to credit the amount of the gratuity or any part thereof against or as a part of his wages. And the legislative intent reflected in the history of the statute, was to ensure that employees, not employers, receive the full benefit of gratuities that patrons intend for the sole benefit of those employees who serve them. Thus, our Supreme Court has prohibited a reduction, either directly or indirectly, of an employer's minimum wage obligation by virtue of tips received by an employee (Industrial Welfare Com. v. Superior Court, 27 Cal.3d 690, 730, 166 Cal.Rptr. 331, 613 P.2d 579), and employers from paying tipped employees a subminimum wage. (Henning v. Industrial Welfare Com., 46 Cal.3d 1262, 1265, 252 Cal.Rptr. 278, 762 P.2d 442.)

or regulate such practice, it could have easily done so, just as it prohibited the various enumerated employer practices. Further, we find nothing in the legislative history of section 351 or related sections, which precludes such an arrangement. And, as far as we can determine, California has no established policy against tip pooling among employees mandated by the employer. To the contrary, the restaurant business has long accommodated this practice which, through custom and usage, has become an industry policy or standard, a "house rule and is with nearly all Restaurants," by which the restaurant employer, as part of the operation of his business and to ensure peace and harmony in employee relations, pools and distributes among those employees who directly provide table service to a patron, the gratuity left by him, and enforces that policy as a condition of employment.

But Old Heidelberg has engaged in none of these practices. It does not "take, collect, or receive" as its own any part of a gratuity left by a patron; it does not credit tips against wages it owes the employee; it pays none of its tipped employees a subminimum wage, but a minimum wage or greater; and it deducts no tip income from any employee's wages. Old Heidelberg has simply followed a "house rule" which is the industry practice, that tips left on table be pooled and...