First-of-their-kind lawsuits over pooling tips can proceed

In rulings believed to be the first of their kind, federal courts in Kansas and Missouri have held that casino employees may collectively pursue claims that their employers illegally paid tips to workers who were ineligible to receive them.

In 2019, tipped minimum-wage workers brought Fair Labor Standards Act claims against Boyd Gaming Corporation in the U.S. District Court for the District of Kansas and Pinnacle Entertainment Inc. in the Western District of Missouri. 

Judges conditionally certified the plaintiffs’ claims in both cases. The rulings could affect thousands of casino workers who work in nearly 20 casinos across the country.

George Hanson of Stueve Siegel Hanson in Kansas City, who is representing the plaintiffs in both suits, said in an email that the Boyd and Pinnacle cases are unique in that the judges have ruled that the FLSA’s tip-pooling rules may be applied to the casinos’ practice of paying out paid time off from a mandatory employee tip pool. 

What makes the cases even more unusual, he said, is that the FLSA is being applied to the payment of PTO using pooled tips for employees who work dual jobs — that is, employees who rotate between shifts working in tip-eligible positions, such as table games dealers, and positions that are not tip-eligible, such as supervisor roles.  

“On the one hand, these employees work part of the time as table games dealers, and as such are eligible to lawfully participate in a tip-pooling arrangement,” he said, noting that the casinos require employees to pool tips as a condition of employment. 

“However, on the other hand, these employees also work as table games supervisors and cannot participate in the dealers’ tip pool because they are not tipped employees and are working in a supervisor role,” he said, alleging the casinos failed to differentiate between the two types of employees.  

If the plaintiffs prevail on summary judgment or at trial, the tip pools will be invalidated and the casinos will owe employees the difference between their sub-minimum direct cash wage — which is as low as $2.13 an hour — and the federal minimum wage of $7.25 an hour for every hour they worked during the past three years, Hanson said.

“These are significant sums,” he said. 

Denise Drake of Polsinelli in Kansas City is representing both Boyd and Pinnacle. She declined to comment for either client. 

Hanson and his co-counsel also recently secured a third win for casino workers in the Eastern District of Missouri. 

On March 23, a federal judge granted conditional certification for claims brought by employees of Tropicana Entertainment Inc., which operates Lumiere Place Casino & Hotels in St. Louis. 

Hanson said the class attorneys are pleased with the decision. 

“This hard-fought victory will allow these employees to band together in pursuing their wage claims,” he said. “As Class Counsel, we are eager to try these claims and get these unpaid wages out of Lumiere’s coffers and back into the workers’ pockets.” 

Amanda Colvin of Bryan Cave Leighton Paisner in St. Louis represented Tropicana. She declined to comment.

The cases are James v. Boyd Gaming Corporation, 2:19-cv-02260; Lockett v. Pinnacle Entertainment Inc., 4:19-cv-00358; and MacMann v. Tropicana Entertainment Inc., 4:19-cv-00404.