Entrepreneurial lawyers have filed numerous suits against New York City restaurants over alleged violations of tip-splitting and overtime rules, a trend helped along by wage rulings from the state Labor Department. Now one of the town’s best-known restaurateurs says he’s had enough, per the New York Post:
“Money-hungry lawyers, through frivolous lawsuits, are shaking down the very foundation of Manhattan’s restaurant industry,” fumed Joe Bastianich, co-owner of Eataly, Del Posto and Babbo.
Bastianich said the litigation — he has been sued twice — has left such a bitter taste that he’s done with setting up new ventures in New York.
“We opened Eataly and put 700 jobs in the New York economy. Since then we haven’t opened another restaurant in New York, nor will we,” Bastianich told The Post. “We opened three other restaurants, in California and Connecticut, worth 1,000 jobs that could have been here in New York. Someone in Albany needs to understand the agenda, what this is really costing the greatest restaurant city in the world.”
Earlier here, etc.
12 Comments
I don’t know much (if anything) about the restaurant business, but I am surprised that even a high-end restaurant has 700 employees.
I’m not a lawyer, I’m a waiter. I’m also relatively new to New York. In looking for a job in this city waiting tables, one of the first things out of the mouths of waiters has been “to look out for getting cheated.” From what I can glean, many of this city’s restaurants (including the one for which I work) have been sued for managers and owners taking tips, not paying proper wages, using accounting tricks to pay people less than minimum wage, and simply stealing money. These things are illegal. They are not frivolous, especially when you make $5/hour and are counting on the tips you make from people to make a living (and which, by the way, incentivize good service) . Tips should not have to be shared with people who are salaried and have guaranteed incomes. Not paying for training, or anytime work is being done is illegal. It should not matter what that work is.
Most of the problems lie with restaurant managers and owners who, typically, at least in my experience, will usually blame employees for any inconsistencies rather than getting to the bottom of something like illegal tip sharing mandates, not paying people what they are contractually obligated to pay, and the like. The leaders in these companies will fight tooth and nail to deny employees their due compensation for work done so that they can make their bonuses or, in extreme cases, because they are on the take. This is usually what forces employees to go to lawyers in the first place. Not to mention the fact that I have never worked in a restaurant, even the chains, where something was not going on that was against the rules.
I am a capitalist. I believe that workers should be able to go to the best place for the best money with the best people in charge and be paid the best they can get for the time and work they put into a business. I believe in as little regulation as possible to run businesses. I also believe that employees should be able to sue an employer when they believe they have been wronged monetarily through graft, greed, or theft.
And like bad tippers getting stuck with a required service charge for a large party, I believe that, most of the time, the ones who complain are the ones who were going to try to give you the shaft in the first place.
Also, I want to talk to Mr. Bastianich, because if he thinks California will take it any easier on him then I have some wonderful property in Arizona that has a lovely view of the Atlantic Ocean I’d like to sell him. Of course, I’ll probably need a lawyer for that.
@Frank: I’m sure he’s counting up- and downstream employment, like food suppliers and garbage men (or is that ‘sanitation engineers’?).
I’m slightly skeptical about the “frivolity” all all these lawsuits. I would have liked it if the article had explained what, exactly, the restaurants were being sued for and what law that violated. It would seem to be fairly easy to prove if tips were being split or not, etc.
From what I could tell on Google, Eatly is a pretty large facility (50,000 square feet) that’s part restaurant, part “artisan market” for Italian goods. 700 jobs may not be out of line.
Restaurant business is fungible. Mr. Bastianich’s absence will be filled by some other entrepreneur less bothered by frivolous lawsuits, more willing to shrug them off as another “cost of doing business” and mark up his prices accordingly.
I recall a similar article a few months back about a disgusted restaurateur in California, but the last I heard California still had restaturants.
Silly greasy-spoon owner. Doesn’t he realize that the way you get sharks to go away is to offer them another (the bigger the better) victim on which to feed? Look at the following from an article in today’s NY Post:
“Protesters march on Wall St. after park cleanup postponed, get into scuffle with cops,” By FRANK ROSARIO and DANNY GOLD (Oct. 14, 2011) :
***
Brookfield [Properties] , a publicly traded real estate firm, had planned to power-wash the plaza section by section over 12 hours and allow the protesters back — but without much of the equipment they needed to sleep and camp there. The company called the conditions at the park unsanitary and unsafe.
The company’s rules, which haven’t been enforced, have been this all along: No tarps, no sleeping bags, no storing personal property on the ground. The park is privately owned but is required to be open to the public 24 hours per day.
***
http://www.nypost.com/p/news/local/manhattan/zuccotti_park_cleanup_postponed_7FyMGft7IABwkMxaEW1sYP
So, who do you think is a more interesting target? A publicly traded real estate firm and the City of NY, for allowing the unsafe and unsanitary conditions which expose all sorts of people to all sorts of harm and emotional distress (those in the Park and those trying to get to their homes on Park Ave.), or going after a restaurant on behalf of a waiter who makes min. wage? Brookfield admits to assuming a duty to keep the Park safe and sanitary, which duty it obviously has breached. And, in front of a Manhatten jury, who needs to actually have proof of damages?
I suggest an Overlawyered Pool to see who gets the closest to the exact date and time that the first suit is filed against Brookfield Properties. I believe that it will be 11:03 AM, Eastern Daylight Savings Time, Monday, Oct. 17, 2011. (That also leaves time for the press conference on the courthouse steps, and you can still get to your table for lunch).
Restaurant business is fungible. Mr. Bastianich’s absence will be filled by some other entrepreneur less bothered by frivolous lawsuits, more willing to shrug them off as another “cost of doing business” and mark up his prices accordingly.
Well there you go. Higher prices for consumers. Sounds like a win for everyone. The Lawyers get their pay. The waiters may get their tips and I get to go out to dinner less (saving me money!).
“Someone in Albany needs to understand the agenda…”
Someone in Albany clearly understands the agenda. His name is Sheldon Silver, Majority Leader in the Assembly for a thousand years. He is a partner in the biggest slip and fall law firm, and he makes a fortune keeping all lawsuit reform from ever seeing the legislative light of day.
Frank, John, are you familiar with NYC? Eataly is not “a restaurant”. It’s nearly a city-block-full of multiple restaurants, markets, wine stores, cheese shops, and other Italy-themed foodie places. It’s not hard at all to conceive of the entire enterprise employing several hundred people given its size, scope, and operating hours. Eataly is really a neat place. I recommend you visit if you can. Beyond it’s obvious attraction as a place to eat – it has become the 3rd or 4th most popular tourist destination in the city.
That said, Bastianich’s remarks underscore the lie behind almost every politician who bleats that the City of New York is “pro-business”.
Who am I? Just a customer and a taxpayer – nothing more.
@Hugo If the local economy would support the same number of restaurant jobs with higher prices, we’d already see the higher prices. If restaurants have to raise their prices to afford the lawyers, fewer consumers can afford restaurants, and there will be fewer restaurants and fewer restaurant jobs.
@wfjag If I had been a neighbor living in FiDi, I would’ve sued Brookfield for public nuisance a week ago, but apparently the only role for public nuisance in the New York area is to sue handgun and electricity vendors.