By Mass. Lawyers Weekly Staff
Late in 2010, waiters at Maggiano’s Little Italy in Boston reached a $1.3 million settlement with the chain’s owners over alleged tip misappropriations.
The plaintiffs had complained that when the eatery hosted banquet and private party events, it charged customers a gratuity or service charge, but never passed along some of the charge to the servers. Confused customers allegedly tipped less because they thought the charge was going to the restaurant’s employees.
But while the settlement for the Boston servers was approved in federal court, it won’t be going national.
U.S. District Court Judge Joseph Tauro rejected the plaintiffs’ motion to certify a national class that potentially could have included wait staff at the chain’s 42 other locations.
Part of the problem, Tauro found, was that once the named plaintiff in the Boston case settled, it could “no longer be fairly said that Plaintiff has the same interest in zealously pursuing the litigation as members of the proposed national class … [who] may have live claims under the tip and wage laws of other states.”
Because Maggiano’s service charge policies varied not just from restaurant to restaurant but also from event to event within the same franchise, Tauro decided it would not be “possible or advantageous to attempt to prove liability for breach of implied contract on a class-wide basis, because the very existence of a contract as to each event at each restaurant will be subject to individual proof and defense.”
The settlement of the Massachusetts case meant that “the court would be in the awkward position of presiding over a class action where all of the discovery would take place outside of the Commonwealth, and the law to be applied is the law of twenty-one other states, but not the Commonwealth of Massachusetts,” Tauro wrote.
The judge noted that evidence had been produced showing that banquet customers who inquired about the service charge were generally informed that part of it went to the restaurant, and part was given to the staff.
“It is also clear that the banquet checks used by Defendants had a separate line for a gratuity, and that banquet servers did, in fact, receive gratuities on top of the service charge,” Tauro said.
Boston attorney Shannon Liss-Riordan of Lichten & Liss-Riordan, who represented the plaintiffs, writes in an e-mail that she was “disappointed” by the ruling. “At the same time the court said the case was not suitable for class certification, the court said the case would be more properly litigated through statewide classes. Unfortunately, however, the wait staff in these other states are not aware that they have a claim to challenge Maggiano’s deceptive collection of a service charge that is not distributed in full to the wait staff.”
Jeffrey Brody and Douglas Hoffman, of the Boston office of Jackson Lewis, represented the defendant. Neither attorney responded to a request for comment.
The November settlement created a $1.25 million settlement fund, with Lichten & Liss-Riordan receiving $416,000, plus expenses.
Ironically, the settlement included a clause that the defense could not use the named plaintiff’s receipt of settlement funds as support for an argument “that he is not an adequate or typical class representative for the purported National Class.”