Unless you’ve been sleeping for the past decade, you know that Minnesota is an at-will employment state. Thus, either an employee, or an employer, may terminate the employee’s employment at any time, with or without notice. But what happens if an employee is terminated for not sharing tips with other employees? Despite not losing tips (the employee didn’t share the money as requested, after all), the Minnesota Court of Appeals held in Burt v. Rackner, Inc. d/b/a Buny’s Bar & Grill (MN App. June 27, 2016), that the employee’s termination of employment for refusing to share tips resulted in lost employment, and thus, he had an actionable claim to recover future lost wages:
Where an employer requires, as a condition of employment, that an employee consent to working rules expressly prohibited by the MFLSA, the employee is authorized by the statute to sue for damages normally associated with a wrongful-discharge cause of action.”
In other words…although the server’s employment was “at-will”, because his employment was terminated for failing to follow the employer’s directives to share tips, which were in violation of the Minnesota Fair Labor Standards Act (MnFLSA), he was “wrongfully discharged” contrary to law. Thus, an exception to at-will employment is born.
Recall, the MnFLSA prohibits employers from requiring employees to share tips. Minn. Stat. 177.24, Subd. 3. This is not new. Though most servers will share tips out of respect for their teammates in the back of the house, an employer cannot require tip sharing or tip pooling. Often, the back of the house will self-regulate this bad form, whether conscious or subconscious (providing faster service and help to those who share tips). What is new, is the Court holding that an employee can sue an employer when that employee is fired for refusing to comply with an employer’s illegal condition of continued employment based on a violation of the MnFLSA.
In this case, the employee did not lose any wages – he didn’t share after all – but he was fired for not sharing wages (which he can’t be required to do by an employer) and thus, he lost future wages. The takeaway? Employers should not require tip-sharing or terminate an employee for failing to share tips. Chances are the employee will figure it out soon enough with the help of his or her teammates in the back of the house.