UnderCover Waitress: Bribery, Blackmail, Extortion

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Tuesday, November 13, 2012

Bribery, Blackmail, Extortion

Ask the Waitress!

Got a question about an extremely sticky and slimy situation on the dining room floor.
I have a question about tip pooling. We have several stations that are money makers, several stations that are moderate money makers, and other sections that don't seem to do as well as the other stations. Every server is aware of this and obviously wants to be in a money making section.
These "good sections" are given to the servers who tip the head guy more money. Every server knows that if you tip this person more (5%  or more of sales $1000- $1500) you are immediately scheduled in the big money stations. It is killing morale. 
Anyone who has approached management has had their schedule altered. One server was threatened with termination if he complained again. Are they breaking the law? And if there is no law, shouldn't there be? 

Really, there is two different questions. "Is this illegal" and "Shouldn't it be illegal?" Easy to answer the second question: Yes! The first question, however, demands more discussion. Let's start with some definitions.

Bribery: According to the Free Online Legal Dictionary, bribery is "the offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties."

Blackmail: "The crime involving a threat for purposes of compelling a person to do an act against his or her will, or for purposes of taking the person's money or property."

Extortion: "The obtaining of property from another induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right."

We can rule out extortion because there is no threat of violence or force. This situation sounds like bribery to me.

The Portland Restaurant Worker's Association has a good page that describes tip legal jargon.

Tip Pool: Tip pools may be mandatory. Servers may be required by restaurant owners to give a certain amount to other, traditionally tipped employees, such as bussers, hostesses, bartenders. The Department of Labor (DOL) spells out that reasonable tip pools may require servers to share either 15% of their tips, or 2% of their sales.

Please note that the DOL does not specify how large or small a percentage of tips must go into the tip pool. Requiring waitresses to put in more than 15% is legal.

Tip Out: When the term "tip out" is used in legal documents, it refers to voluntary sharing of tips. For example, a waitress may want to tip the dishwasher for giving extra help on a busy night. She is not required to.

Okay, back to the original question. Is the extra tip out truly voluntary?

The restaurant owner is requiring waitresses to pay 2% into the tip pool; this is considered reasonable by the DOL. But, this head FOH employee wants an additional 3% in return for good sections. That 3% is voluntary in that nobody will be fired refusing to tip out extra. It is also bribery.

Employers aren't legally required to have a workplace that feels fair, only one which doesn't discriminate on the basis of impermissible criteria such as race, gender, disability, age over 40, religion, in some places sexual orientation, national origin, etc. For example, if black, Jewish, or older waitresses were encouraged to tip out 5% of sales and other waitresses were given the best sections without any extra tip out, that is illegal discrimination. Everybody must be held to the same rules. The problem here is that this rule smells like bribery or blackmail.

The Equal Employment Opportunity Commission (EEOC) has this to say about Job Assignments:
It is illegal for an employer to make decisions about job assignments and promotions based on an employee's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not give preference to employees of a certain race when making shift assignments and may not segregate employees of a particular national origin from other employees or from customers.
Nothing about favoring some employees for other reasons. Sometimes, an employee gets favored because the manager thinks she is highly skilled, other times because she has worked for the employer for a long time, and sometimes because the manager wants her friendship. In this case, people are paying money in the hopes of being favored.

Unfair Management Practices

Most information about management and labor practices is relevant to unions and organized labor. At-will employees enjoy less protection.

Whistle Blowing

There are two general types of whistle blowing: internal and external. Internal whistle blowing is complaining to management. External whistle blowing is complaining to the EEOC, for example.

Deskin Law Firm writes Retaliation by Your Employer After Making an Employment Complaint or for Whistleblowing. This document states that you can not be retaliated against for asserting a protected right. That means that if you complain to your employer that you are being discriminated against for being Asian, you can not be fired or put on a bad shift as a result of your complaint.

However, it is also my understanding that not all internal whistle blowing is protected. If you complain to management about something that is not a protected right, you may be fired or otherwise punished. It seems that the restaurant the original question asker works at is not worried that they are guilty of anything illegal; therefore, they feel comfortable threatening those who complain with job termination.

If somebody gets fired for complaining and fights for unemployment, I'd love to see the judge's face when the restaurant representative attempts to justify the tip out arrangement.

Conclusion

I want very much to find something saying that this bribery is illegal. Unfortunately, food servers are almost always (if not always) at-will employees. Tip outs are common and allowed; tipping out extra is not illegal. Rewarding those who tip out extra seems immoral and unethical, however, it may not be illegal. I would love for somebody to tell me different, and include a source.

In the end, sometimes the best thing to do is look for other opportunities.

Thanks for asking the waitress!

8 comments:

  1. If this was in California, Penal Code 641.3 should be applicable, yes?
    "Any employee who solicits, accepts, or agrees to accept
    money or any thing of value from a person other than his or her
    employer, other than in trust for the employer, corruptly and without the knowledge or consent of the employer, in return for using or agreeing to use his or her position for the benefit of that other person, and any person who offers or gives an employee money or any thing of value under those circumstances, is guilty of commercial bribery."

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  2. Interesting thought, Andrea! However, I don't think it applies. According to the inquiry, Employer is on board with the situation. We know this because the asker tells us that anyone who complains about it to management has their schedule altered. So the element of the commercial bribery statute that requires the transaction to occur "without the knowledge or consent of the employer" cannot be met. Management knows about this. So it's not happening without Employer's consent. Ergo, not commercial bribery, even if it is taking place in California.

    In my humble opinion.

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    Replies
    1. Thank you for that eloquent explanation! (and, my thoughts exactly.)

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  3. Management is not the employer. The corporation is the employer.

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    Replies
    1. We don't know if the restaurant is chef-owned or a corporation. If it's a smaller operation, the owner is most likely aware and working with management. If it's a huge chain, then I wonder if that might make a difference...?

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    2. Corporations only act through their agents. Employer hires, manages, and fires through management. Unless management is some third-party entity hired to supervise employees, management *is* the employer, at least from the standpoint of employees, which is the standpoint that counts. And any prosecution of "commercial bribery" that turns on niceties of whether management is "the employer" for purposes of the statute, or some other corporate officer, is going to run afoul of "reasonable doubt," which is the standard of conviction in criminal cases. I guarantee it!

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    3. You must work at the Men's Wearhouse... ;-D

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    4. Illegal or not... it's profoundly unethical

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