Workers Sue Upscale Rooftop Bar and N.Y. Nightlife Mogul for Withheld Tips and Unpaid Wages, According to Outten & Golden LLP

September 10, 2008

A group of restaurant workers allege that restaurant and nightlife entrepreneur Steven Greenberg’s posh hot spot, 230 Fifth, misappropriated tips and paid workers less than the minimum wage in violation of the federal Fair Labor Standards Act (“FLSA”) and New York state labor laws.

According to the Complaint filed late Monday, Mr. Greenberg and 230 Fifth, New York City’s largest rooftop bar, have “enjoyed great success at the expense of their hourly service workers.” The four workers who brought the suit allege that the defendants broke various labor laws by “refusing to pay them the proper minimum wage, refusing to pay them proper overtime compensation, and compelling them to participate in a mandatory tip pool.” They also allege that the defendants have “misappropriate[d] ‘service charges’ and/or mandatory gratuities paid by customers” and have “led customers … to reasonably believe that such ‘service charges’ and/or mandatory gratuities were for the workers.”

Justin M. Swartz, an attorney at Outten & Golden LLP, stated, “Keeping workers’ tips and failing to pay them minimum wages may reduce restaurant overhead, but blatant labor law violations can generate tremendous legal liability. We and our clients hope that this case and others like it will put the New York restaurant industry on notice that cheating workers costs more than it saves. I am surprised that New York City restaurant owners have not yet cleaned up their acts.”

One of the lead plaintiffs in the case, Christopher Schiffer, a barback from Brooklyn, said, “I filed this lawsuit not just for me but also for all of the other people who are too afraid to speak up. I don’t think I am the only person who worked private parties but didn’t get a share of service charges or mandatory gratuities, and I don’t think I am the only one who worked off-the-clock for free.”

Linda A. Neilan, an attorney at Outten & Golden LLP, added, “The New York state labor law means what it says: tips belong to the servers who worked for them, not to their employers. Our clients’ goal is simple — they want to be paid the wages they and their co-corkers worked so hard to earn. They join thousands of other restaurant workers city-wide who are speaking up against what they see as time theft and tip theft.”

Adam T. Klein, Justin M. Swartz, and Linda A. Neilan, of Outten & Golden LLP in New York, represent the Plaintiffs and the class. The case is “Sand et al. v. Greenberg et al.,” (U.S. District Court for the Southern District of New York, Case No. 08 cv 7840).

Greenberg, who is named as an individual defendant in this case, reportedly once owned the Palladium, the Roxy, and the Cobalt Club in the Gramercy Park Hotel, and is a “consultant” for the Hotel Gansevoort.

Outten & Golden LLP will seek to have the lawsuit certified as a class action that includes all bartenders, barbacks, waiters, bussers, runners, and other hourly service workers who have worked at 230 Fifth.

Attorney Contacts: Justin M. Swartz and Linda A. Neilan, Outten & Golden LLP, New York, NY, (212) 245-1000,

Media Contact: Erin Powers, Powers MediaWorks LLC, for Outten & Golden LLP, 281-703-6000.