A dealer who works at Boyd Gaming Corporation’s Kansas Star Casino recently scored a legal victory on tip pooling. The decision will likely benefit other gaming floor employees, too.
In a recent memorandum, Kansas US District Court Judge Daniel Crabtree mostly agreed with claims made by attorneys representing the plaintiff, Roger James, in the lawsuit. He alleged Boyd Gaming violated the Fair Labor Standards Act (FLSA) when it came to tips. The FLSA is a key federal employment law.
James received a base hourly wage. He also received tips through Boyd Gaming’s tip pooling that was shared among dealers at the casino.
Under the FLSA, an employer can pay tipped employees less than the minimum wage, Crabtree explained. But the employer has to provide a “tip credit” to make up the difference.
But James’ lawsuit said Boyd Gaming paid tipped employees below the minimum wage without complying with the FLSA tip credit provisions. A mandatory tip pool also failed to comply with the FLSA, the lawsuit adds.
Since James filed his lawsuit, 16 other current or ex-employees of Boyd Gaming casinos joined as co-plaintiffs.
When asked for comment on Crabtree’s memo, Ryan McClelland, a Missouri-based lawyer who represented James, told Casino.org the legal team is “happy with the court’s thorough decision conditionally certifying two Fair Labor Standards Act claims — failure to provide notice of the FLSA’s tip credit requirements and unlawful tip pooling — across 13 Boyd Gaming casinos.”
The memo has a wider impact than just the Kansas case, too.
“That is a big victory for our clients and will allow upwards of 8,000 sub-minimum wage casino workers across the country to band together in one case to vindicate their minimum wage rights,” McClelland said.
He noted the case is part of Stueve Siegel Hanson’s and McClelland Law Firm’s broader efforts in the field. That includes about 20 cases over the last five years to enforce federal and state minimum wage and overtime laws at casinos around the country on behalf of hourly employees who are typically paid less than the federal minimum wage due to the FLSA’s tip-related exceptions, McClelland said.
Casino.org also reached out to Boyd Gaming for comment. A spokesman declined to issue a statement.
Employers Often Abuse FLSA Tipping Exception
When asked for comment on the judge’s memo, Robert Jarvis, a professor at Nova Southeastern University’s Shepard Broad College of Law, who is not involved in the case, said it was a clear victory for the plaintiff. “Indeed, the plaintiff got almost everything he wanted, including certification of both collectives — meaning that the case can move forward — and detailed contact information — which will make it easy for the plaintiff to contact potential class members,” Jarvis said.
Jarvis further points out there is “a lot of abuse of the FLSA’s tipping exception across many different types of industries.” He suggested the FLSA be amended to remove the exception.
“But because Congress has shown no interest in doing so, it falls to the courts to make sure that employers are scrupulously following the FLSA,” Jarvis said. “Judge Crabtree’s lengthy and carefully-balanced opinion is an example of a judge taking this responsibility very seriously.”
And what is the impact on Boyd Gaming and other casinos?
“For well-run casinos that are carefully following the FLSA’s tipping rules, there shouldn’t be any impact. But for casinos that are not following the law (or have failed to follow the law in the past), the decision reconfirms that there can be serious — and very costly — consequences,” Jarvis said.
He further called it “remarkable … how hard Boyd tried to avoid what it surely knew was the only possible outcome (and how poor its arguments were, once one got through the various smokescreens it set up).”
Boyd Likely To Settle Case, Jarvis Predicts
Jarvis also expects that Boyd Gaming will settle the case “relatively quickly.
“When a judge basically tells you that he is going to rule in favor of the plaintiff if the case goes to trial, it’s best to avoid going to trial.”
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