A group of Dunkin' Donuts employees who sued their franchise owner over a no-tipping policy have lost their case before the state's top court.
The Supreme Judicial Court ruled Friday that Massachusetts restaurants could impose no-tipping policies and require workers not to accept extra money left by customers. The case was sent back to a lower court to be reconsidered.
Constantine Scrivanos, who owns about 66 Dunkin' Donuts restaurants in Massachusetts and imposes no-tipping policies at two-thirds of them, was sued by three employees. At the beginning of the trial, any money that customers left on the counter would be put into the register, but that policy was changed to require the money be dropped into an "abandoned change" cup, similar to a take-a-penny-leave-a-penny tray. The employees' attorney, Shannon Liss-Riordan, alleged both policies were illegal.
"I'm disappointed," she said. "The issue was not entirely clear under Massachusetts tip law, but I thought we had a good case."
The top court said that Massachusetts's tipping law, which prevents management from taking a cut of employees' tips, didn't ban managers from having a no-tipping policy in the first place. As long as the policy is clearly communicated, a restaurant's owners can keep extra money that customers leave behind, the court ruled.
Diane Saunders, who represented the restaurants' management, said her client was happy with the decision because research showed the expectation to tip can make customers uncomfortable. She added that signs posted in the restaurants saying things like "thank you for not tipping" and employee instructions made the policy clear, and any customer who insisted on leaving money behind would be "unreasonable."
"That money does not need to be treated as a tip," Saunders said. "There's huge anti-tipping sentiment out there."