Workers lose suit on tip distribution

Thursday, Jan. 27, 2000 | 10:48 a.m.

CARSON CITY -- The Nevada Supreme Court Wednesday dismissed the appeal of a group of bartenders and food servers who complained that nearly $100,000 of their tips for serving at banquets was improperly diverted to their superiors at the Reno Hilton.

The court said the employee handbook at the Hilton does not contain any mention of how the tips should be divided. The court said the Hilton could unilaterally change any oral agreement it had with its employees.

The workers filed suit for negligence, breach of contract and related claims after their tips were split with their superiors. District Judge James Hardesty granted a pre-trial judgment in favor of the Hilton, and the Supreme Court upheld the decision.

The Supreme Court said there may be criminal sanctions in the law for taking tips away from workers, but it said there is nothing in the law to allow a civil suit.

The employees contended the Hilton entered into an oral contract with them over the division of tips in an equal amount. The Hilton said this oral agreement could be modified by the hotel because the workers were at-will employees.

The 16 employees in their suit said the Hilton took 14.75 percent out of the total tips and distributed the money among four management executives such as the director of catering and the banquet manager, even though they never took part in the actual service of customers. In some cases, the tips actually doubled the salary of the executives.

The practice existed from 1992 until 1996. According to court documents, the director of catering received $1,321 every two weeks as part of the share of the tips. Other employees received from $666 to $832 every two weeks. When the tip pooling was stopped, the four executives got pay raises.