Williamson v. DT Management, Inc., 17 Mass. L. Rptr. No. 26, 606 (MA 3/10/2004), No. 021827D.
| Decision Date | 10 March 2004 |
| Docket Number | No. 021827D. |
| Citation | 17 Mass. L. Rptr. No. 26, 606 |
| Parties | Fred Williamson et al.<SMALL><SUP>1</SUP></SMALL> v. DT Management, Inc. d/b/a Boston Harbor Hotel, Inc. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Master and Servant — Wage and Hour Laws — Gratuities to Service Employees — Mass. Tips Statute Bars the Sharing of an Itemized "Service Charge" Among Banquet Managers. The provision of the Massachusetts Tips Statute that authorizes the sharing of "service charges" that have been itemized on a customer's bill (primarily applicable to banquet events), authorizes sharing only among employees that provide direct table service; the Act bars sharing of "service charges" with non-service employees. Therefore it is improper for a restaurant to have a compensation arrangement pursuant to which an 18% gratuity added to banquet charges is divided with 15% going to direct service personnel and 3% to banquet supervisory personnel. The defendant unsuccessfully argued that only the first provision of the Statute, which applies only to shared tip pools, limits management's ability to share gratuities among employees not directly involved in providing table service. The opinion also holds, however, that a separately itemized "administrative charge" is not a "service charge" and therefore may be distributed solely to non-service banquet supervisory personnel.
Fred Williamson, Stephan Man, Howard Chang, and Mark Peters (collectively, "the plaintiffs") were each employed as Servers by DT Management, Inc., d/b/a Boston Harbor Hotel, Inc. ("the defendant") for varying periods of time at the Boston Harbor Hotel ("the Hotel"). The plaintiffs filed their complaint on April 30, 2002, based on acts that occurred during the plaintiffs' employment at the Hotel. In their amended complaint, the plaintiffs set forth the following allegations and requests for relief against the defendant: violation of G.L.c. 149, §152A (Count I); quantum meruit (Count II); intentional interference with contractual relations (Count III); breach of contract (Count IV); breach of the covenant of good faith and fair dealing (Count V); conversion (Count VI); and unjust enrichment (Count VII).
The matter is currently before this Court on the defendant's motion for summary judgment as to all Counts of the plaintiffs' amended complaint; on the plaintiffs' cross motion for summary judgment as to their statutory claim (Count I); and on the plaintiffs' motion for class certification.
Prior to the filing of these motions, on November 27, 2002, the parties jointly moved to bifurcate liability and damages in the discovery phase of litigation. This motion to bifurcate was allowed on December 2, 2002 (Borenstein, J.). As a result, the motions currently before this Court deal with the issue of the defendant's liability only and, therefore, this Court will decide the propriety of summary judgment solely with respect to liability, making no determinations with regard to damages. For the reasons discussed herein, the defendant's motion for summary judgment is ALLOWED in part and DENIED in part; the plaintiffs' cross motion for summary judgment is DENIED; and the plaintiffs' motion for class certification is DENIED.
The material undisputed facts as revealed by the summary judgment record are as follows.2 The plaintiffs are former Servers for the banquet department and restaurant at the Hotel, which is owned and operated by the defendant. Each plaintiff had an at-will employment relationship with the defendant. The plaintiffs readily admit that from the beginning of their employment at the Hotel, they were aware of and disagreed with the defendant's service charge distribution practice. This practice, upon which the plaintiffs' complaint is primarily based, involved the defendant's collecting the service charges paid by the event customers and distributing them among both the Servers and various employees in management positions at the Hotel, who also played roles in ensuring that the events were successful. The duties of various employees at the Hotel who received portions of the service charges, as well as the methods by which the defendant distributed these service charges, will be discussed below.
The plaintiffs were employed at the Hotel for the following periods of time: Fred Williamson, from April 27, 1993 until September 22, 1999; Mark Peters, from August 10, 1987 until December 12, 1999; Stephen Man, from August 10, 1987 until January 27, 2000; and Howard Chang, from November 7, 1990 until May 25, 1999.
The Banquet Department at the Hotel provides catering and banquet services to guests who hold private functions at the Hotel, and it coordinates, caters, staffs, and serves such functions for groups of as few as 20 and as many as 300 people.
An 18% "Service Charge" or "Banquet Gratuity" was added to Hotel customer invoices from the Banquet Department until June 1998. The Hotel distributed 84% of the charge (15% of the total bill) to the Servers who had waited on the banquet guests. Until 1995, each Server received a share of the charge based on his or her hours worked; and since 1995, the Servers
have received their portion of the charge based on his or her "level" and hours worked.3 The remainder of the service charge (3% of the total bill) was distributed to Catering Managers, Banquet Managers, Assistant Managers, and the House.
From July 1998 to April 2001, the Hotel altered its practice, adding a 14% "Banquet Service Charge" or "Banquet Gratuity" and a 4% "Banquet Admin Charge" or "Banquet Admin Fee" to banquet customers' bills. The service charges/gratuities were distributed solely to the Servers based on their level and hours worked; and the admin fees/charges were distributed among Catering Managers, Banquet Managers, Assistant Managers, and the House. Since May 2001, the service charges/gratuities have been 14.5%; and the admin fees have been 4.5%; both distributed in the same manner as noted above. Additionally, Directors of Catering have occasionally received a portion of the administrative fees for their services performed at the banquet events. The duties of those who receive portions of either the service charges or the administrative fees are as follows:
Position: Catering Manager
Duties:
annual base salary: $15,000-$20,000
gross annual pay: $55,000-$65,000 (including admin fees)
responsible for generating new banquet business
coordinates banquet events
maintains Hotel's mission statement
manages sales of banquet events
does not manage employees or have authority to make or influence employment decisions affecting any Hotel employee
sole contact at Hotel for guest planning banquet
with guest, selects wine and menu for event
orders all special items for event (i.e. audio visual; etc.) and special meals
selects linen, china, and silverware for tables
prepares Banquet Event Order ("BEO") which is sent to customers and sets estimated bill for event
if appropriate, prepares and mails contract to customer itemizing estimated cost of event
informs customer of service charge and admin fee; which is also stated in contract
meets with guest before event and introduces Banquet Manager(s) for the event
assists the Servers and the kitchen staff for the duration of the banquet
occasionally, may (1) assist the Servers in setting up the function room; (2) ensure that special order items are present and working properly; (3) ensure that service of the meal to guests is timed properly; (4) take, from time-to-time, beverage orders, serve beverages, pour water and wine, serve salads, soups, entrees, and desserts, and clear plates if necessary; and (5) assist in cleaning the room at the conclusion of the event
Duties:
annual base salary: $15,000-$20,000
gross annual pay: $55,000-$65,000 (including admin fees)
generally performs same duties as Catering Managers for the events he or she coordinates
on occasion may stay to oversee large or important events that are coordinated by Catering Managers; majority of time is spent coordinating banquet events
responsible for the catering department's finances, forecasts revenue, orders equipment as needed, and administers payroll
supervises Catering Managers and has authority to approve employees' requests for vacation time
works with the Executive Chef to change the menus seasonally
Duties:
annual base salary: $20,000
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