Servers at Yankee Stadium Sue for Misappropriation of “Service Charges”

The New York Yankee’s food and drink vendor, Legends Hospitality, has been hit with a lawsuit which seeks to recover misappropriated mandatory charges for “in-seat servers” who have been employed at Yankee Stadium. The lawsuit, which was filed in New York State Supreme Court in the Bronx, claims that from the start of the 2009 baseball season until June of 2011, the menu for in seat service at Yankee Stadium stated that a 20% service charge would be added to the listed prices, and that “additional gratuity is at your discretion.”  The Complaint alleges that by retaining the 20% mandatory charges paid by patrons in addition to the cost of food and beverages, gratuities were unlawfully misappropriated from the servers. The practice of retaining mandatory charges intended for employees was held by the New York Court of Appeals in Samiento v. World Yacht Inc. to be unlawful.  New York’s law now provides that, “a charge purported to be a gratuity must be distributed in full as gratuities to the service employees or food service workers who provided the service” and that there shall be a “rebuttable presumption” that any charge in addition to charges for food or beverage (including any charge for “service” or “food service”) is a “charge purported to be a gratuity.” Additionally, regulations under the New York Labor Law currently provide that “the employer has the burden of demonstrating, by clear and convincing evidence, that the notification was sufficient to ensure that a reasonable customer would understand that such charge was not purported to be a gratuity.”  Attorneys for the workers claim that the service and supplemental charges were added automatically and were not voluntary payments, but rather purported gratuities that should have been distributed in full to the servers.