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Class Action Defense Cases–Budrow v. Dave & Buster’s: California State Court Affirms Defense Judgment In Labor Law Class Action Holding California Law Does Not Prohibit Sharing Tip Pools With Employees That Do Not “Directly Serve” Tables

Trial Court Properly Granted Defense Motion for Summary Judgment in Class Action Alleging Violation of California Labor Code by Sharing Tip Pools with Non-Managerial Employees that only “Indirectly Service” Tables because California Law does not Impose “Direct Table Service” Requirement on Participation in Tip Pools California State Court Holds

Plaintiff filed a class action in California state court against, their employer, Dave & Buster’s, alleging labor law violations; the class action complaint was premised “on the theory that distributions from the ‘tip pool’ to persons who did not provide direct table service violated [California] Labor Code section 351.” Budrow v. Dave & Buster’s of California, Inc., ___ Cal.App.4th ___ (Cal.App. March 2, 2009) [Slip Opn., at 1-2]. According to the allegations underlying the class action, defendant – an owner and operator of restaurants – “requires that servers contribute one percent of their gross sales to bartenders and other employees.” Id., at 2. (The class action did not allege that any manager participated in the tip pool, id., at 3.) The theory underlying the class action claims was that this policy violates Section 351, which plaintiff interpreted as limiting tip pools to those persons who “provide ‘direct’ table service.” Id., at 2. Defense attorneys successfully demurred to two of the three causes of action in the class action, and then moved for summary judgment on the last class action claim, which asserted an unfair business practice violation of Business & Professions Code section 17200 (“the UCL claim”). Id. The parties “disputed whether bartenders serve food and drink to patrons sitting at tables,” but the trial court found no triable issue of fact existed sufficient to preclude summary judgment in favor of the defense. Id., at 3. The trial court granted summary judgment on the UCL claim and entered judgment in favor of defendant on the class action. Id., at 2. The Court of Appeal affirmed.

Plaintiff’s class action was premised, in part, on the argument that California law imposed a “direct table service requirement” that excluded employees from sharing in tip pools unless they “directly serve the table.” Budrow, at 3. The Court of Appeal held that California law does not distinguish between “direct” and “indirect” table service, see id., at 3-5, and that the case relied on by plaintiff, Leighton v. Old Heidelberg, Ltd., 219 Cal.App.3d 1062 (Cal.App. 1990), did not impose such a requirement, see id., at 5-10. Accordingly, the appellate court affirmed judgment for the defense in the class action, id., at 11.

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