Now that’s a big tip.
In what is believed to be the largest settlement of its kind, celebrity chef Mario Batali agreed to pay $5.25 million to resolve a lawsuit alleging that he and his business partner violated the Fair Labor Standards Act through a tip-skimming policy at eight of their popular New York restaurants.
The class-action lawsuit, which could cover 1,100 current and former servers, busboys, runners, and bartenders who worked at those restaurants between 2004 and 2012, alleges that Mr. Batali and his business partner, Joseph Bastianich, withheld money from tips that amounted to between 4 and 5 percent of the nightly wine sales and didn’t pay minimum wage or overtime.
The settlement with Batali is only the latest, and highest-profile, case of restaurant workers suing to make sure they get their tips.
“This is a very widespread problem. A lot of restaurants withhold tips,” says D. Maimon Kirschenbaum, a lawyer for the restaurant employees in the case. Mr. Kirschenbaum estimates that his firm has worked on more than 100 cases since 2006 that involve tips being withheld from restaurant employees.
“Most restaurants have tip pools, and the law clearly states that only workers who provide direct customer service can receive tips,” he said in a phone interview. The recent rise in such lawsuits can be attributed to the laws regulating tip pools becoming clearer as a result of litigation, says Kirschenbaum, who would not comment on the Mario Batali case specifically.
Lawyers for both sides would say only that the matter is resolved to the satisfaction of both parties. The settlement still requires the approval of a federal judge.