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Lawsuit says tip policy at Wynn violates federal rules

Three Wynn Las Vegas dealers are taking their claims of unfair tip pooling to federal court with a new lawsuit that claims the resort’s tip sharing policy violates federal labor laws.

Attorneys for three of the plaintiffs named in a state lawsuit against Wynn Las Vegas filed the lawsuit in U.S. District Court in Nevada late Thursday. The federal lawsuit claims the Wynn tip-pooling policy violates the Fair Labor Standards Act.

The move could mean more monetary damages against Wynn, the attorneys said.

Attorneys for Quy Ngoc Tang, Leopold Gemma and Daniel Baldonado are seeking class action status for the new complaint, Reno-based attorney Mark Thierman said. The case would be an “opt-in” class, meaning plaintiffs would have to seek to join it.

The decision to file in federal court was made in response to a U.S. Department of Labor brief that was filed siding with a worker in Oregon in a tip-pooling case — Misty Cumbie v. Woody Woo. The case is now before the 9th U.S. Circuit Court of Appeals, Thierman said.

The Labor Department’s brief says the worker in Oregon was correct in challenging her company’s tip-pooling policy, which the department said violates the Fair Labor Standards Act.

“The Labor Department has said tip pooling violates minimum wage and overtime provisions in the law,” Thierman said of the Oregon case.

Wynn dealers attorney Robin Potter said the Oregon case marks the first time the Department of Labor has come out against tip pooling in cases in which the employer was not taking part in a “tip credit” system. Tip credits allow employers to pay less than the minimum wage to workers who can expect to earn most of their salary from tips.

Wynn Las Vegas doesn’t use tip credits and pays its workers minimum wage.

But the Labor Department said in the Woody Woo case that the tipped employees were paid minimum wage but were still required to contribute their tips to “an invalid tip pool,” and a portion of that pool was shared with nontipped employees.

Lawyers for Wynn dealers say any potential damages Wynn faces could be doubled under federal law. So far, those damages are approximately at least $600,000 to $800,000 a month for the 34 months the case has gone on, Potter said.

Wynn management takes 15 percent to 20 percent of the pooled tips, she added.

Wynn Las Vegas’ attorneys could not be reached for comment.

The dealers have claimed their tips were wrongfully diverted through a tip-pooling system implemented by Wynn in the fall of 2006. A lawsuit was filed at that time in state court, but the Nevada Supreme Court sent the case to the Nevada labor commissioner after ruling he was the proper person to consider the case.

The labor commissioner heard arguments from both sides this week, with more hearings before the commission scheduled for Aug. 18.

Contact reporter Valerie Miller at vmiller@lvbusinesspress.com or 702-387-5286.

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