Summary: The Superior Court held that no statute prohibits employers from adopting and enforcing a policy that prohibits employees from accepting tips from customers. Wait Staff employees of a Dunkin’ Donut brought this action against the franchisee-owner who instituted a policy that required employees to return any tips to the customers who left them. One of the main issues was whether G.L. c. 149, §152A(b), also known as the Tips Act, prohibited employers from instituting a no-tip policy for their employees and patrons. Court held that the language of the Tips Act does not explicitly prohibit employers from adopting such policies and there was no valid reason to adopt a broader interpretation of the statute.
Discussion:The language of the statute forbids employers from requiring or accepting payment from the tips collected by its employees but it does not specifically state that employers are forbidden from instituting a no-tipping policy. Although the Court indicated that a broader interpretation prohibiting such a policy may be proper when customers of the establishment have a reasonable expectation that their tips would go to the employees, there was nothing in the statute or its legislative history suggesting that employers are prohibited from enacting a “policy that is clearly and conspicuously announced, so as to preclude any such reasonable expectation.” The Court further recognized that employers may have a legitimate interest in adopting a no-tipping policy, such as preventing undue favoritism or unfair pressures. The Court noted that employers may also decide that tipping is inconsistent with the desired atmosphere of the establishment or that accounting for the tips may cause undue administrative burden. Finally, the Court emphasized that even if such interests do not conflict with the Tips Act, a no-tipping policy must be “clearly and effectively announced to defendant’s customers, such that they could not reasonably believe that money left as tips would benefit employees.”
Implications: This case is the first to directly address the issue of no-tipping policies. The employer bears the responsibility of effectively communicating this policy to its customers. Although this case law applies generally to private sector service employees, it does not apply to public employees, as G.L. c. 248A prohibits them from accepting any gratuities.