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Court rules a Dunkin' Donuts franchisee can prohibit tips - and keep any that customers insist on giving workers
By adamg on Fri, 04/10/2015 - 10:56am
The Supreme Judicial Court ruled today state law lets take-out owners prohibit tips and, as long as they prominently alert visitors to that, keep any of the money customers insist on giving anyway.
The ruling comes in the case of employees of Dunkin' Donuts franchisee Constantine Scrivanos, who owns 66 Dunkin' shops in eastern Massachusetts and who bans tipping in about two-thirds of those.
In those stores, employees are told they can lose their jobs if they accept tips and have to maintain an "abandoned change" cup in which to put tips from insistent customers - which are then used to help out other customers, similar to the "take a penny/leave a penny" containers some stores have.
The employees sued, claiming the state's tipping law prohibits Scrivanos from barring tips, because it:
Does not permit an employer to take any "deduction from a tip," and that the defendants' prohibition on employees accepting tips in effect results in a "deduction from a tip" that the employee would have received absent the notipping policy.
The reply from the state's highest court can basically be summed up as: Seriously?
Still, the justices consulted three separate dictionaries for the meanings of the words "deduction" and "given," in addition to looking at past decisions and the tip law itself, to conclude the law only applies to establishments that allow tips, that it does not prohibit no-tipping policies, and that as long as Scrivanos posts prominent signs alerting customers that tips are banned, the money some customers leave anyway is not really a "tip" under the law.
Free tagging:
| Attachment | Size |
|---|---|
 Complete ruling, RON MESHNA and others vs. CONSTANTINE SCRIVANOS and another. | 109.34 KB |
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Comments
What a hero of capitalism
What a hero of capitalism this franchise owner Mr. Scrivanos is, prohibiting his low-paid employees from receiving any tips.
If you want to write Mr.
If you want to write Mr. Scrivanos a letter, the business address of NGP Management, LLC is available online.
Tipped workers in restaurants
Tipped workers in restaurants generally make something like $2-4/hour. Dunkin' workers at these non-tipping restaurants would legally be required to be paid at least minimum wage ($8-something in MA). Would you like to see them converted to tipped workers? Maybe that's what the franchisee should do.
You make a great case, here
A great case for ending tipped wages (not all states have those) and for raising the minimum wage.
In fact, this guy's behavior will probably be used as a good reason for that raise.
Not either or
Why can't a person chose to tip an employee, regardless of how much that employee makes?
Part of the problem is that
Part of the problem is that the employer is responsible for tip reporting and paying the employer portion of FICA on tips. That's a lot of hassle for a small transaction.
And how does this have
And how does this have anything to do with Scrivanos pocketing money intended for his employees?
Does the tipped minimum wage
Does the tipped minimum wage apply at low-price counter-service places, where it's likely the tips won't bring the employee's total wage up to the regular minimum of $9/hour?
Ouch!
Hopefully Ms.Liss-Riordan will have more luck in her Uber suit.
Constantine Scrivanos may own
Constantine Scrivanos may own many businesses but he must be a sad and awful person if he insists on taking money away from people who have been rewarded by customers for working hard.
He work hard, they no
work hard.
Come now!
You think tuxes and attending star studded receptions at the Ritz Laguna Niguel comes cheap?
Which ones?
Is there a map of these businesses available anywhere? Because I don't want to inadvertently let my caffeine addiction benefit this man.
Boycott and boycott hard.
We need a list of the franchises he owns and make them known.
Public humiliation will eventually hurt his bottom line which is all he obviously cares about.
This looks like a job for......4CHAN!!!!
Right Principle, Wrong Outcome?
If people start boycotting his stores, and his bottom line falls, how many of his employees will be laid off?
Yes, it will hurt him, but it will also hurt the people who have already been hurt by him.
Suldog
http://jimsuldog.blogspot.com
So they should just keep quiet and be thankful?
For working for a petty multi-millionaire?
Workers rights, while much maligned by the right, are essential if this country ever hopes of having some semblance of a healthy and expanding middle class.
Why?
Why does he ban tips in some stores and not others?
Shady owner. If I choose to
Shady owner. If I choose to tip the person who pours my coffee and the owner takes it then he is stealing in my opinion, which of course has no bearing on the law... but regardless he is a thief in my opinion.
A la Amy's Baking Company
On Kitchen Nightmares
Although he comes off as a chiseler there
must be some rationale behind this decision. Was the focus on tips and the potential inter employee fights over the same overtaking the service to customers? Do we know if the chaos that can be caused by the distribution of shared tips cause this guy to pull a Herod and say no more BS I'm splitting the baby by taking away all tips? Inquiring minds want to know.
So, again, why is he
So, again, why is he pocketing the tips himself?
If he wants to pull & split the tips among all employees, okay. But this case was specifically about him keeping the tips himself, because he imposed a "no tipping" policy.
No, that's not quite right.
He was pocketing the tips at one point, but not recently.
At first, employees were to put the money in the register, but once the case started (4ish years ago), the owner switched to cups that were treated as Leave a Penny/Take a Penny (where all money would be used by customers, not employees or owners), and the employees amended their case to say that THAT was a violation.
So, he's NOT keeping the tips for the store any longer, but the court said that he could if he wanted to.
Once the workers put the tips
Once the workers put the tips in the register, what happened to the money?
And while I see what you're saying about leave-a-penny, I'm not quite sure how that would factor in if someone left a dollar, for example, or even fifty cents-- some amount clearly more than what a patron would drop in a leave--a-penny dish. Were the employees supposed to put a deliberately left tip in a leave-a-penny fund (as opposed to <.10 change)? If so, then what happens at the end of the day, when $5 is in the "leave a penny" dish? Could the employees take it then?
I guess my point is that eventually, when the books are balanced, there will be money left over if folks have been leaving change or tips. If we're talking about a buck or two a week, big deal. But if the owner is pocketing $20/week that was left by patrons under the impression that the money would go to the wage workers, then he's scum even if he's not criminal.
the one down the street from me...
Obv he kept it, but I was making the point that he hasn't been doing that in the last few years, and this case wasn't about him specifically keeping the tips/money, it was about him not giving the tips/money to the employees, regardless of whether he kept the money, used it for customers, or lit it on fire.
One of the franchises is right down the street from me. I rarely see any dollars in the cup ever, TBH, but that's probably because of the no tipping sign, and the fact they try to push the money back to you if you leave it on the counter. I have seen them use the cup money to pay for Hard Hat Harry's coffee (an older local with some issues, but who everyone likes), and other than that, I've seen them use the change same as I've seen liquor stores use it.
Mixed Biblical Metaphor
I believe you meant Solomon. Herod was the one who murdered all male infants two and under.
Suldog
http://jimsuldog.blogspot.com
Either way... dead baby.
Either way... dead baby.
Remember when "no tips" used
Remember when "no tips" used to be really common at DD's and other small places? A big part of it was to avoid the paperwork (and cost, because they owe the employer's FICA on tips). It wasn't really expected to be a big deal and employers didn't really care if an employee kept the change. Having a sign and an official policy got you off the hook and let the employees keep the rare tip that came through.
But now, we have built a huge tipping economy (and it's only going to get worse when people use pay apps on their phones that suggest tipping amounts on every purchase). There are lawsuits and big money involved because it has become a bigger piece of the action. Before it was just a minor point, but there's too much money involved for it not to get attention.
No Tipping
In high school I worked for a to be un-named bread establishment that did not allow tips. The reason we were given was the different taxation (and thus reporting) requirements and the different (i.e. lower) payment options available if we were to be tipped, as previous comments have noted. That said, the management were not so adamant about it, and if someone insisted on leaving a tip we could keep them. Come on Dunkos!
Not a real reason
The tax-reporting would certainly be more work (although it's so common that pro bookkeepers are certainly not challenged by it), but the "different (i.e. lower) payment options available" is smoke. Even if the bakery explicitly encouraged tipping, that does not stop them from paying minimum or higher wages.
I think historically a lot of
I think historically a lot of small businesses didn't want the hassle of tracking tips officially. They didn't care if you got them, they just wanted an official way of not being bothered by them (with the added benefit that no taxes came out of tips that aren't reported).
Taxes
The business needs to report it as income if they handle the money -- for example if the customer pays with a credit card and charges the tip to the card. The business in that case is the one processing the money and payment to the employees and thus it's taxable.
For cash transactions it's still taxable but the employees are on their own for reporting it. The idea being that the restaurant owner doesn't know how much money is left in tips -- that's something between the customers and servers.
I understand why someone might want to say no tips (it's easier for the owner to deal with disputes) but I still think this is really scummy on their part.
I'm surprised the owner keeps
I'm surprised the owner keeps the "not tip". Most Dunkins that ban tipping have a change box that benefits Children's Hospital instead. If he did this rather than take the "abandoned change", I doubt any one would have any problems with his policies.
I think there is more than
I think there is more than one side to this story and we should remember that three employees allege that money went into the register. We do not know that for certain. We should think twice before calling for a boycott.