In a recent case regarding an issue of first impression, a Massachusetts Superior Court judge held that employers may adopt policies that prohibit employees from accepting tips without violating the Massachusetts Tips Law. To be valid, these policies must be clearly and conspicuously announced to customers in a manner that a reasonable customer would understand that any money left by the customer would not be given to the employees as a tip.
In Meshna v. Scrivanos, a number of employees working in various Dunkin’ Donuts franchises filed a class action suit against the owner/operator claiming that the no–tips policy, which require employees to return all tips to the customers, violated Massachusetts law. The employees claimed that the policy required all employees to return tips to the customers, and any tips that employees were unable to return would be retained by management. The owner/operate argued that Massachusetts laws permit employers to establish no-tipping policies, and the court agreed with this argument. Ultimately the court held that the Massachusetts Tips Law does not prohibit a “no-tipping policy that is clearly and conspicuously announced.”
The court noted that in this case, customers routinely left, or attempted to leave tips and reasoned that these actions supported an inference that customers believed tips would go to employees. This inference, coupled with the fact that management retained any unreturned tips, did not support arguments that the policy was clearly and conspicuously announced to customers.
Consequently, employers may adopt a no-tipping policy without violating Massachusetts Tips Law, so long as the employer “takes responsibility for communicating that policy to its customers effectively,” so customers will not reasonably expect that money left for employees will be treated as tips.
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