When folks hosting glittering parties at Cipriani 42nd Street, Cipriani Wall Street, Cipriani 23rd Street, and the Rainbow Room pay the 23 percent “service charge” on their banqueting bills, do they think it’s going directly to those poor bastards in the monkey suits who were serving them drinks and hauling out bus buckets?
Some “current and former” servers for the hospitality empire say they do, and are filing a lawsuit against Giuseppe Cipriani, his companies, and the personnel companies through whom they were hired for not passing that money on to them.
The Cipriani Group prevailed in a similar suit in 2003, on the grounds that the aggrieved workers were employed by third-party agencies, not Cipriani. We asked Joseph Fitapelli of Fitapelli & Schaffer, LLP (which with Outten & Golden LLP is representing the workers) why he expected a different result.
“Things have changed since that case,” he said. “The law’s evolved.” He cited Samiento v. World Yacht, in which the New York State Court of Appeals held that if it looks like a tip, the customer has reason to believe it’s a tip, and it may be argued that it should go to the server, not the caterer.
Also, said Fitapelli, “The employees, I believe, in the earlier case went through independent contractors, and received 1099s.” The current plaintiffs were given W-2s from a staffing company — which was “basically [Cipriani’s] in-house staffing company,” and hence a creature of Cipriani, not a true independent contractor.
The plaintiffs also say they were shortchanged on hours worked. “The organization had a policy that essentially amounted to, you show up a half-hour early because if you show up at call time, you’re late,” said Fitapelli. The workers claim they were not paid for these half-hours.
Cipriani spokesman Matthew Hiltzik hasn’t seen the complaint yet, but “based on the misinformed statements made by Plaintiffs’ counsel,” he says, “it seems like a desperate attempt to conjure up the same claims that were dismissed several years ago by the State’s Highest Court.”
Hiltzik also says Cipriani “has been ahead of the curve in clearly notifying its customers that the service charge, which is a catering industry standard, is not a gratuity and is not paid to the staff. The Plaintiffs are employed by a staffing agency which is independently owned and operated from Cipriani.”
Cipriani also showed us the Service Charge section of their standard banquet contract:
“SERVICE CHARGE: A mandatory Service Charge in the amount equal to twenty-three percent (23%) of the total food and beverage charge for the Event will added to the account of the Patron, and Patron agrees to pay such amount. The Service Charge is not a gratuity and is subject to applicable sales taxes. Patron is not obligated to pay gratuities to the wait staff for the Event.”
It’s up to the reader — or, rather, to a judge — to determine whether that clause sufficiently warns the customer that none of the charge will go to the server.