Wage Law

Labor Code § 351 does not prohibit mandatory tip pooling in California casinos. Labor Code § 351 and Labor Code § 450 do not provide for a private right of action, but either may serve as predicates for suits under the unfair competition law (Business & Professions Code § 17200). Lu v. Hawaiian Gardens Casino (2009) __ Cal.App.4th __. Therefore, most of the trial court's order granting summary judgment of this casino worker wage-and-hour class action is upheld.

A triable factual issue about whether some tip pool recipients are “agents” in contravention of section 351 precludes summary judgment of the UCL cause of action based on that statute only. In all other respects, summary judgment was properly granted. Accordingly, we affirm the judgment in part and reverse it in part.

There was a prior District Court case holding that Labor Code § 351 does not contain a private right of action. Matoff v. Brinker Restaurant Corp. (C.D.Cal. 2006) 439 F.Supp.2d 1035. Labor Code § 351 reads:

“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for. An employer that permits patrons to pay gratuities by credit card shall pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. Payment of gratuities made by patrons using credit cards shall be made to the employees not later than the next regular payday following the date the patron authorized the credit card payment.”

Labor Code § 450 reads, in relevant part,

“No employer, or agent or officer thereof, or other person, may compel or coerce any employee, or applicant for employment, to patronize his or her employer, or any other person, in the purchase of any thing of value.”

We still believe that there is a private right of action under Labor Code § 450 as it applies to the compelled purchase of clothing that constitutes a uniform. See Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084, 1088, 1091-1092 (where the employer requires its employees to wear uniforms at work, the employer must furnish the uniform and pay for its upkeep; these payments are "wages." 8 CCR § 11070, ¶9(A).) There is clearly a private right of action to recover wages. Labor Code § 218.

You can read the entire text of Lu v. Hawaiian Gardens Casino here in PDF or Word format.