Court Opinion

ID: 4419352
Source: CourtListenerOpinion
Date Created: 2019-07-23 21:00:11.565402+00
Date Added: 2024-06-11T13:32:45.882989
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 18-2009

              TRACEY LAZO; JAMEN HARPER; MUSTAPHA JARRAF,

                        Plaintiffs, Appellants,

                         NY'COLE YOUNG THOMAS,

                              Plaintiff,

                                  v.

                             SODEXO, INC.,

                         Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

       [Hon. George A. O'Toole, Jr., U.S. District Judge]

                                Before

                      Lynch, Kayatta, and Barron,
                            Circuit Judges.

     Edward A. Prisby, with whom Kajko, Weisman & Colasanti, LLP,
John P. Regan, and Employee Rights Group, LLC were on brief, for
appellants.
     Douglas J. Hoffman, with whom Jonathan R. Shank and Jackson
Lewis P.C. were on brief, for appellee.

                             July 23, 2019
            KAYATTA, Circuit Judge.               Employees of a food services

and facilities company sued the company for alleged violations of

the     Massachusetts       Tips     Act.         The   employees        sought       class

certification, which the district court denied.                    Three individual

cases    proceeded     to    summary        judgment,      at    which       point     each

subsequently    failed.            The    plaintiffs     now    appeal       the     class-

certification and summary-judgment rulings.                      For the following

reasons, we affirm the entry of summary judgment without reaching

the merits of the class certification issue.

                                            I.

            Sodexo,     Inc.       provides      food   services       and    facilities

management to a variety of educational, health care, and business

institutions.         It    operates        at   various      locations       throughout

Massachusetts, including at One Lincoln Street in Boston.                            At One

Lincoln, Sodexo has two clients:                 K&L Gates LLP and State Street

Bank.    Sodexo operates a cafeteria for these clients' employees.

It also operates an Executive Dining Room ("EDR") for both clients,

offering    on-site     dining      and     catering,    as     well    as    non-direct

services such as drop-off catering and unmanned buffets.                              These

clients pay the invoices from Sodexo.                   Plaintiffs Tracey Lazo,

Jamen Harper, and Mustapha Jarraf worked for Sodexo in the EDR in

service capacities (e.g., as wait staff).                   Each began working in

the EDR prior to September 2015.

                                          - 2 -
            Since June 2008, Sodexo has subjected any orders placed

through the EDR to an eighteen percent "administrative charge."

Sodexo retains the proceeds generated from this charge.                   The

administrative charge appears on invoices seen by the individuals

who book the order, not the people dining in the EDR.                 As of

September     2015,   invoices    for   EDR    services      state:    "The

administrative charge does not represent a tip or service charge

for wait staff employees or bartenders."            There is no evidence

these invoices were seen by people dining there.

            Sodexo    also   operates   at   the   Plimoth   Plantation    in

Plymouth, Massachusetts.       Plaintiff Jarraf worked at Plimoth as a

server.     At Plimoth, Sodexo provides catering for private events

such as weddings, showers, and meetings.              From 2009 to 2015,

invoices for these events contained a twenty percent "staffing

charge" or "support charge."       The invoices stated that the charge

was "not a gratuity, but covers labor expenses for staffing your

event and may exceed our actual labor cost."              In October 2015,

Sodexo changed the language to read:

            [A]ll food and beverage is subject to a 20%
            administrative fee and applicable state and
            local tax.    The administrative fee does not
            represent a tip or service charge paid
            directly   to    wait  staff,   employees  or
            bartenders but is a charge to cover our
            operational costs and no additional gratuity
            is required.

                                   - 3 -
            The plaintiffs brought suit against Sodexo for alleged

violations of the Massachusetts Tips Act, Mass. Gen. Laws ch. 149,

§ 152A.      In   a   nutshell,   their    claim   is   that   the   various

administrative, support, and staffing charges belonged to them as

tips.     After conducting relevant discovery, the plaintiffs moved

for class certification.      Their proposed class encompassed "[a]t

least 604 Sodexo food and beverage wait staff and service employees

working at thirty-five (35) Massachusetts Sodexo locations where

[Sodexo] has imposed, and improperly retained, a 'service charge,'

on patron food and beverage purchases."        The district court denied

the motion for lack of sufficient commonality and typicality.           See

Lazo v. Sodexo, Inc., No. CV 15-13366-GAO, 2017 WL 5147098, at *5

(D. Mass. Nov. 6, 2017); see also Fed. R. Civ. P. 23(a)(2)-(3).

            The three individual plaintiffs' cases proceeded to

summary judgment, at which point the district court held that

Sodexo's actions at both One Lincoln and Plimoth Plantation were

protected under the safe harbor provision of the Tips Act and

granted the defendants' summary-judgment motion.               See Lazo v.

Sodexo, Inc., No. CV 15-13366-GAO, 2018 WL 4696740, at *3-4 (D.

Mass. Sept. 28, 2018).

            The plaintiffs now appeal the district court's class-

certification and summary-judgment decisions.

                                   - 4 -
                                   II.

             At    the   plaintiffs'     urging,     and    with    Sodexo's

acquiescence, we turn first to the summary-judgment issues.               We

review the district court's summary-judgment rulings de novo.           See

Zurich Am. Ins. Co. v. Elec. Me., LLC, 927 F.3d 33, 35 (1st Cir.

2019).

                                   A.

             Section 152A(d) of the Tips Act states, in part:

             If an employer or person submits a bill,
             invoice or charge to a patron or other person
             that imposes a service charge or tip, the
             total proceeds of that service charge or tip
             shall be remitted only to the wait staff
             employees, service employees, or service
             bartenders in proportion to the service
             provided by those employees.

Mass. Gen. Laws ch. 149, § 152A(d).

             Section 152A(d) also contains a safe harbor provision,

providing:

             Nothing in this section shall prohibit an
             employer from imposing on a patron any house
             or administrative fee in addition to or
             instead of a service charge or tip, if the
             employer provides a designation or written
             description of that house or administrative
             fee, which informs the patron that the fee
             does not represent a tip or service charge for
             wait staff employees, service employees, or
             service bartenders.

Id.

             The   plaintiffs   first    argue     that    Sodexo   violated

section 152A(d) because diners who were served in the EDR were

                                  - 5 -
"patrons," as defined by the Tips Act, and were not informed that

Sodexo's administrative charge was not a tip or service charge.

We agree that EDR diners fall within the definition of "patron"

because they were "served by . . . wait staff employee[s] or

service employee[s] at a[] place where such employees perform

work."    Id. § 152A(a).     However, we disagree that Sodexo had a

duty to inform those diners that the administrative charge does

not represent a tip or service charge.       Under section 152A(d), the

"designation or written description" need only be provided to

patrons upon whom an employer "impose[s]" an administrative fee.

Id. § 152A(d); see also Meshna v. Scrivanos, 27 N.E.3d 1253, 1260

(Mass. 2015) (explaining that section 152A(d)'s designation or

written   description   requirement       "reflects   the   Legislature's

concern that, absent such information, customers charged a fee by

employers of wait staff employees will assume that the employer

will remit that amount to its wait staff employees" (emphasis

added)); Impose, Black's Law Dictionary (11th ed. 2019) ("To levy

or exact.").   Those patrons upon whom a charge is imposed are the

ones who are at risk of confusing an administrative charge with a

service charge to the detriment of the service employees.             See

Bednark v. Catania Hosp. Grp., Inc., 942 N.E.2d 1007, 1015 (Mass.

App. Ct. 2011) (noting that the purpose of the designation or

written   description   is   to   "dispel   the   possibility"   of   such

confusion).    Nothing in the language of section 152A(d) indicates

                                  - 6 -
that a patron who does not have to pay an administrative charge

must be informed that the charge paid by someone else is not a

service charge.

            Here, because there is no evidence that Sodexo imposed

any charge on diners who were served in the EDR, section 152A(d)

does not require that any disclaimer be conveyed to those diners.

To the extent that the plaintiffs are arguing that non-paying EDR

diners would have nevertheless tipped the service employees but

for being told by Sodexo employees that gratuities had already

been covered, section 152A(d) does not provide the relief they

seek.     Section 152A(d) prohibits employers from retaining tips

that customers intended to give to service employees -- it does

not restrain employers from preventing tipping generally.                      Cf.

Meshna, 27 N.E.3d at 1260 (holding that section 152A does not

"require   that     employers   of    wait       staff   employees . . .     permit

customers to give tips to such employees").

            The   plaintiffs      also      challenge      the   district   court's

disposition    of     their   claim      regarding       administrative     charges

imposed by Sodexo on K&L Gates and State Street prior to 2015.

Until that time, Sodexo had not included on its EDR invoices any

written description stating that the administrative charge was not

a tip or gratuity for wait staff.                  But the plaintiffs do not

dispute    Sodexo's    position      that    a    verbal    or   oral   designation

suffices in lieu of a written description. See Bednark, 942 N.E.2d

                                      - 7 -
at 1013 n.18 ("We also observe that the Act does not explicitly

require a 'designation' to be in writing to be effective, just

that it be 'provide[d]' and that it 'inform[]' the patron in the

statutory sense." (alterations in original)).          And the district

court found that Sodexo made K&L Gates and State Street "aware of

the purpose of the administrative charge."       Lazo, 2018 WL 4696740,

at *3.   This finding is supported by one of Sodexo's interrogatory

responses, as well as by the declaration of Sodexo's resident

district manager for its State Street account, Roger Dubois.             In

the interrogatory response, Sodexo stated:

             During the relevant time period, State Street
             Bank and K&L Gates have been made aware of the
             purpose of the administrative charge, that it
             is retained by Sodexo, and is not a tip or
             gratuity for the wait staff.     In addition,
             Sodexo management has explained the charge
             numerous times to any individual who has asked
             about it.

             Similarly, Dubois's declaration stated that, "[o]n a

number of occasions," he or another management staff member had

been   asked   about   the   administrative   charge   by   State    Street

employees and that, "[i]n all such instances," he or another

management     staff   member    "explained    the     purpose      of   the

administrative charge, that it is applied to all events booked in

the EDR, is retained by Sodexo, and that it is not a tip or gratuity

that is distributed to wait staff."       Dubois also stated that other

Sodexo management staff had informed him that they had "verbally

                                  - 8 -
spoken with employees from K&L Gates when they . . . booked events

in the EDR" and that they offered the same explanation of the

administrative charge.1

          Once Sodexo took the position at summary judgment that

the record failed to generate a genuine dispute of material fact

as to whether it had made State Street and K&L Gates aware of the

purpose of the administrative charge, it became the plaintiffs'

burden   "to   proffer    facts   sufficient   to   rebut   [Sodexo's]

assertions."   Nansamba v. N. Shore Med. Ctr., Inc., 727 F.3d 33,

40 (1st Cir. 2013). We reject the plaintiffs' claims because there

is no evidence that Sodexo failed to make one of the foregoing

disclosures to the paying entity regarding any event at which a

plaintiff served.2

     1 To the extent that this statement is inadmissible hearsay
that would ordinarily not be considered on summary judgment,
Evergreen Partnering Grp., Inc. v. Pactiv Corp., 832 F.3d 1, 12
(1st Cir. 2016), we note that the district court was permitted to
consider it because the plaintiffs did not raise any objection to
the declaration below, see Bellone v. Southwick-Tolland Reg'l Sch.
Dist., 748 F.3d 418, 420 n.2 (1st Cir. 2014).
     2  Plaintiff Jarraf also challenges the district court's
finding that he "was not a wait staff employee [at the EDR] as he
had at least some managerial responsibility," which precluded him
from recovering under the Tips Act. See Matamoros v. Starbucks
Corp., 699 F.3d 129 (1st Cir. 2012). We need not consider this
argument, because even assuming that Jarraf is eligible under the
Tips Act, his arguments concerning Sodexo's liability are
unavailing, as explained above.

                                  - 9 -
                                            B.

             Plaintiff        Jarraf     also    focuses       his    appeal     on    the

administrative charge Sodexo levied at Plimoth Plantation.                        Jarraf

argues that there is a question of fact as to whether patrons

understood the nature of the administrative charge.                      Specifically,

Jarraf explains that during a Thanksgiving dinner event at Plimoth

in 2016, a patron expressed his belief that a tip had already been

included in the price for a ticket to the event. However, Sodexo's

general    manager      for    Plimoth      stated    that     Sodexo    only    charges

additional fees -- such as an administrative charge -- for private

events, not for its Thanksgiving dining programs.                        Ticket prices

to   the    Thanksgiving       programs       include      only      admission,       food,

beverage,    and    tax.        Consistent       with    that     testimony,      Jarraf

testified that he did not give the patron any invoice containing

an administrative charge, nor did he know if the patron ever

received such an invoice.            On this record, we cannot conclude that

there is a genuine issue of material fact concerning Sodexo's

billing practices at Plimoth.

             To   the    extent      that    Jarraf     also    argues    that    Sodexo

violated the Tips Act when billing for private events (in contrast

to the public Thanksgiving programs), we similarly find this claim

unavailing.        Up until October 2015, private event invoices at

Plimoth    stated    that      the   twenty      percent     "staffing     charge"      or

"support charge" was "not a gratuity."                   In October 2015, Sodexo

                                         - 10 -
amended the language to explain that the administrative fee "does

not represent a tip or service charge paid directly to wait staff,

employees or bartenders but is a charge to cover our operational

costs and no additional gratuity is required."    Jarraf does not

assert that these written descriptions were inadequate, and the

presence of such written descriptions precludes liability.    See

Mass. Gen. Laws ch. 149, § 152A(d).

                                III.

          Having found that the plaintiffs' individual claims

fail, we need not address whether the district court erred in

denying class certification.    For the reasons stated above, the

district court's summary judgment decision is affirmed.

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