California Supreme Court: Employees Cannot Sue Under Labor Code Section 351 for Alleged Unlawful Tip Pooling


Does California Labor Code Section 351, which prohibits employers from taking “any gratuity or part thereof that is paid, given to, or left for an employee by a patron,” create a private right of action for employees? In Lu v. Hawaiian Gardens Casino, Inc., the California Supreme Court holds that Section 351 does not contain a private right to sue.

This decision, issued on August 9, 2010, forecloses employees from bringing class action lawsuits for alleged violation of California’s tip-pooling statute, which until now has been one of the engines driving wage and hour class action litigation in California.

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