Getting Eateries to Fork Over Tips: Justin Swartz Serves Warning to Hotspots that Stiff the Staff

Daily News - Alison Gendar
December 22, 2009

Lawyer Justin M. Swartz is taking on some of the city’s top hotspots.

Justin Swartz is working for tips.

Swartz is making a career out of taking on some of the city’s biggest chefs and hotspots – Bobby Flay’s Bar Americain and Mesa Grill, Tom Colicchio’s Craft, and Tao and Buddha Bar – for workers who say they were stiffed out of gratuities.

“People come to New York City, see a show, stay at a hotel, eat in a good restaurant, spend a lot of money and tip the servers,” Swartz said. “But they have no idea that the restaurant that charged $35 for a steak made even more money by keeping the tips.”

The employment lawyer got his first big restaurant case in 2006, when he sued Shelly’s Prime Steak, which owns several tourist favorites.

From there, word got around.

He and his firm, Outten & Golden, won $3.2 million for workers from Shelly’s Prime Steak, $1 million for staff at Tao and $710,000 for those at Buddha, records show.

Colicchio’s Craft, Craftbar and Craftsteak settled in July, but the terms were sealed. None of the restaurants admitted wrongdoing but agreed to settle and change how they operated, records show. Swartz is barred from talking about most cases.

Right now, he is in final negotiations with Flay, court records show. Just last night, he filed a lawsuit against Cipriani, accusing the Manhattan glamour spot of keeping the “hefty service charge” it charges customers for events instead of turning those tips over to waitstaff.

Restaurants have different ways of keeping tips – holding onto the service charge tacked onto bill for parties, forcing employees to pool tips or even just “misappropriating” them, according to court papers.

“The restaurant industry, at least in labor practices, has always been a renegade industry in New York City,” Swartz said.

Suing famous restaurants may push other, less well-known eateries to change their ways before they wind up in court, he said.

Former waitress Jamie Yuenger sought Swartz out after she says she complained about tip practices at Frankies 17, a hip red sauce joint on the lower East Side.

She earned a flat $25 an hour for private parties – and says never saw a dime of the mandatory “service charge” the restaurant charged customers.

When Yuenger raised the issue, she said she was fired. She is now working with Swartz on a class action suit against the restaurant.

“This is a chance to change the restaurant industry one restaurant at a time,” Swartz said.