Tamburino v. Madison Square Garden, LP

115 A.D.3d 217, 980 N.Y.S.2d 83

This text of 115 A.D.3d 217 (Tamburino v. Madison Square Garden, LP) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tamburino v. Madison Square Garden, LP, 115 A.D.3d 217, 980 N.Y.S.2d 83 (N.Y. Ct. App. 2014).

Opinion

OPINION OF THE COURT

Renwick, J.

Plaintiffs have all worked during the last decade as food and beverage servers at Madison Square Garden. The Garden, owned by defendant MSG Holdings, LLC (MSG), formerly known as Madison Square Garden, LP, is one of the largest sports and entertainment complexes in the world. Plaintiffs bring this action, premised on Labor Law § 196-d, on behalf themselves and a class of individuals similarly situated, claiming that the Garden retained a portion of a mandatory “service charge” that should have been allocated to them as a gratuity. The Garden, however, argues, inter alia, that the gratuities claims are preempted by federal law, and, alternatively, that the claims are subject to mandatory grievance and arbitration under a collective bargaining agreement. For the reasons stated below, we reject both arguments and therefore affirm the denial of defendant’s motion to dismiss the complaint.

The complaint alleges that, at sports and entertainment events, MSG charges and collects “service charges” in the amount of 20% of the total charge assessed for all food and beverages. This charge is added to the bill because, unlike ordering restaurant services, during which customers tip the server individually, the servers in the Garden are presumably not permitted to collect tips from customers attending Garden events. Plaintiffs claim that MSG led its customers and patrons to believe that the service charges were entirely gratuities for the service staff who served the food and drinks at these events. The complaint alleges that MSG did not distribute to the service staff all the service charges it collected.

Plaintiffs belong to Unite Here Local 100 (the Union), which represents members who work predominantly in the hotel, food service, laundry, warehouse and casino gambling industries. [220]*220The terms and conditions of plaintiffs’ employment are governed by a collective bargaining agreement (CBA) entered into between the Union and MSG. Article 15 of the CBA sets forth detailed provisions regarding the MSG’s obligation with regard to conditions under which gratuities must be distributed and the manner of distribution of gratuities to different classifications of employees. Articles 29 and 30 of the CBA contain a mandatory grievance procedure. Under that process, any “dispute, claim or complaint concerning the interpretation or application of the terms of th[e] [CBA]” may not be the subject of judicial action; rather it must be asserted through a three-step grievance procedure. Any dispute which remains unresolved after pursuing such process is subject to mandatory binding arbitration before an arbitrator.

As a threshold consideration, we find that plaintiffs’ well-pleaded complaint states a valid claim under Labor Law § 196-d. Section 196-d states, in relevant part, that

“[n]o employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee.”

The plain language of section 196-d prohibits any retention or withholding of gratuities by the employer (see Samiento v World Yacht Inc., 10 NY3d 70, 78 [2008]).

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Bluebook (online)
115 A.D.3d 217, 980 N.Y.S.2d 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tamburino-v-madison-square-garden-lp-nyappdiv-2014.