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PLATEK v. DUQUESNE CLUB

December 13, 1995

STANLEY PLATEK, LASZLO VARGA, SAM McCULLOUGH, THOMAS HANEY, SR., MARK RIMLINGER, THOMAS VON GEIS, HARRY WRIGHT, JOHN MALEZI, FRANK TRIPODI, and NICK ROMAN, Plaintiffs,
v.
DUQUESNE CLUB, a Pennsylvania corporation, Defendant.



The opinion of the court was delivered by: BLOCH

 BLOCH, District J.

 Presently before this Court is defendant Duquesne Club's (Club) motion for summary judgment with regard to various claims asserted by plaintiffs. For the reasons stated in this opinion, the Court will grant the Club's motion in part and will deny it in part.

 I. Background

 This action stems from the Club's alleged failure to pay plaintiffs minimum wages and proper overtime compensation and to keep proper payroll records as required by the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. Briefly stated, the undisputed facts are as follows.

 The Club is a private social organization located in Pittsburgh, Pennsylvania. The Club provides a variety of services to its members and guests of its members. In particular, Club members have the privilege of reserving private suites or banquet rooms at the Club's premises for private dining functions. These "private parties" range from two-person dinners to wedding receptions, and they typically occur at lunch or dinner time. The Club also provides catering services for its members at other locations, including its members' homes and business offices. The Club's food and beverage director and two assistant food and beverage directors *fn1" are responsible for organizing and overseeing these functions.

 Plaintiffs are employees of the Club who hold the position of "banquet captain." *fn2" Banquet captains function as head waiters at the Club's private parties and at the parties that the Club caters off-premises. Their job responsibilities include setting up dining tables and bars, transporting supplies, supervising wait staff, bartending, and waiting on tables.

 Since their employment at the Club, the plaintiffs have been members of the Duquesne Club Employees Association Union (Union). *fn3" Over the years, the Union and the Club have negotiated a series of collective bargaining agreements, including an agreement which has been in effect since October 1, 1992. Pursuant to this contract, plaintiffs are paid an hourly wage of $ 5.37--$ 1.12 in excess of the current minimum wage of $ 4.25.

 In addition to their hourly wages, plaintiffs receive tips from Club members and guests. In 1993, plaintiffs' average total earnings (i.e., wages and tips combined) before taxes were approximately $ 37,000; in 1992, the average figure was approximately $ 36,000; and in 1991, the average figure was approximately $ 35,700. (See defendant's Exhibit 22). Plaintiffs also receive various benefits from the Club, including life and health insurance.

 The dispute currently before the Court centers around the Club's past and present "tip pooling" arrangements--arrangements under which tips collected at private parties are combined and divided among various Club employees. The mechanics of the tip pooling practices of the Club have varied over time. From June, 1991 to March, 1992, the banquet captains collected and distributed the tips among wait staff, including themselves, who worked a private party. Three management employees also shared in the tip pool. Although the banquet captains were allegedly displeased with the management employees' participation in their tip pool, they allegedly included them because of one manager's threats and intimidating actions.

 Subsequently, in March, 1992, the Club and the Union entered into an amendment to the parties' collective bargaining agreement that slightly changed the prior tip pooling practices. Under the amendment, the parties agreed that the Club itself would take control over the three shares of the tip pool formerly given to the management employees, and in turn would distribute these shares to its managers as incentive compensation in its discretion.

 Ultimately, as part of further negotiations between the Union and the Club, the Club took even greater control over the tip money received by its employees. A provision of a new collective bargaining agreement effective January 1, 1993, formalized the earlier March amendment insofar as it provided that three management employees will participate in the Club's tip pool; in actuality, the Club retains control over these three shares. In addition, the contract provides that the Club, instead of the banquet captains, will handle the accounting and distribution of all tip money. *fn4"

 Partially as a result of the Club's increased role and participation in the tip pool, the plaintiffs initiated the instant litigation. The complaint alleges that the tip pooling practices previously described violate the minimum wage and overtime compensation provisions of the FLSA, see 29 U.S.C. §§ 206 and 207, and that the Club violated the FLSA by failing to properly keep wage and hour records, see 29 U.S.C. § 211. The Club has filed a motion for judgment in its favor with regard to these claims.

 The plaintiffs have also alleged that the Club violated the FLSA by failing to use the plaintiffs' compensation obtained at catered parties held off of the Club's premises when computing the plaintiffs' overtime compensation and that the plaintiffs were not compensated for various work that they performed before and after their shifts. The Club admits that issues of material fact remain with regard to these claims and, therefore, it does not seek summary judgment thereon.

 II. Discussion

 Fed. R. Civ. P. 56(c) provides that judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In addition, Fed. R. Civ. P. 56(e) provides in pertinent part:

 
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does ...

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