Yankee Stadium Workers Win Appeal

On April 1, 2014, the First Department Appellate Division of New York unanimously reversed a decision made by the New York Supreme Court in Mendez v. Legends Hospitality, LLC that dismissed a complaint brought by waiters seeking to recover service charges and tips kept by Yankee Stadium’s catering company, Legends Hospitality. As a result, the case will be moving forward in New York Supreme Court.

Mendez v. Legends Hospitality, LLC arose from claims brought by 32 waiters working at Yankee Stadium that Legends Hospitality improperly retained a 20 percent mandatory service fee added to patrons’ checks from 2009 to 2011. The practice of withholding mandatory service charges has been expressly illegal since 2008, when the New York Court of Appeals held that such charges must be passed to servers since they are assumed to be tips.

In its dismissal motion, the Defendants argued that waiters’ wages were governed by a previously negotiated collective bargaining agreement with the waiters’ union, which stated that the Defendants were entitled to keep service charges. The lower court sided with the Defendants on July 10, 2013 when they stated “Defendants reasonably notified patrons that the mandatory service charge was not a gratuity.”

The First Department disagreed with the lower courts sentiment though as they promptly overturned that holding, ruling that the Plaintiffs stated a valid claim under Section 196-d of New York’s labor code, which prevents employers from retaining gratuities meant for employees. More specifically, the Court stated:

Contrary to the motion court’s determination, defendants did not establish for all the pertinent period they sufficiently notified patrons that the mandatory service charge at issue was not a gratuity

In response to First Department ruling, Fitapelli & Schaffer, LLP attorney representing the Plaintiffs stated “The Company shouldn’t be allowed to hide behind the CBA when it comes to paying wages and violating labor laws.”

The Employment Lawyers at Fitapelli & Schaffer, LLP have successfully represented many stadium employees and other service workers for wage and hour violations violating the FLSA and NYLL. You may have a wage and hour claim if you have ever been worked at a stadium or arena as a server, runner, bartender, host, or any other tipped position. If you believe you have a wage and hour claim, please contact the lawyers at Fitapelli & Schaffer, (212) 300-0375, to schedule a free consultation so that we can discuss your rights under the FLSA and NYLL.