Hundreds of current and former nightclub employees are entitled to damages after the Minnesota Supreme Court ruled their employer broke state law by using their tips to make up for cash register shortages.
More than 750 people who worked for the Drink and Spin nightclubs sued owner Uptown Drink LLC and related companies in 2010, alleging they were violating the Minnesota Fair Standards Act by using their tips to make up for missing money in the cash registers and to pay for customers who walked out without paying or did not sign credit card receipts.
The Supreme Court on Wednesday sent the case back to Hennepin County District Court to determine damages for the servers, bartenders and security guards, the Star Tribune reported.
"This ruling deals with a practice that is sort of the dirty little secret of Twin Cities bars and restaurants — where if the till's short, you've gotta pay if you want to keep your job," said Steven Andrew Smith, a lawyer for the plaintiffs in the class-action lawsuit. "It sends the message that you can't do that."
Employees testified at trial that failing to make the payments could get them fired. Drink countered that employees voluntarily paid the shortages rather than be written up for failing to properly handle cash.
"There is no dispute in this case that the employees were required to pay the employers back for register shortages, walkouts and unsigned credit-card receipts," Chief Justice Lorie Gildea wrote. "Under the plain language of (the law), these deductions from the employees' wages were unlawful."
Both Drink locations, in Uptown and downtown Minneapolis, have since been shuttered, as has Spin. Uptown Drink filed for Chapter 11 bankruptcy, but has since reopened as Uptown Tavern. The company was ordered to pay $700,000 in attorneys' fees and costs as part of the initial lawsuit. However, the bankruptcy has placed any payout on hold.
Thomas Rupp, who began bartending at Drink as a college student in 2007 and now works in government finance, couldn't say how much money might recoup. However, he said the ruling is about more than just money.
"It's a great victory for bartenders and servers who don't have to be afraid and be bullied by their bosses," he said. "This is their money that they rightfully earned, and it should be up to the business to account for these losses through better management."