The Tipping Point
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“We realized it was unusual. In my heart of hearts I thought ‘this is not quite right,’” Sorensen says. “But it was an environment where you don’t question. Most of us just went ‘That’s the way it is’ and turned [the tips] in.” Now a lawsuit filed by Sorensen and four other former employees–Paul Larson, Sarah Brown, John Winterman, and Belinda Chang–alleges that Trotter’s regularly shortchanged waitstaff on hourly pay and overtime and illegally kept millions of dollars in tips. Federal fair labor standards, says their lawyer, Douglas Werman, mandate that employers who pay less than the minimum hourly wage aren’t allowed to keep any of their servers’ tips. According to the suit, only 15 to 50 percent of the money patrons left for the vaunted service they got came back to their servers.
“I think this is a more refined way to compensate the staff,” says Trotter in Lessons. Lawler notes that since the guaranteed income is derived from the pooled tips, “the potential flaw in the system is that there might be a deficit in the tips, although that has yet to happen.” On the other hand, he writes, a substantial surplus in the pool would be paid out to the servers as a bonus. Werman says that, according to court documents, that’s never happened. The complaint alleges that Trotter’s used the tip money to pay other employees such as managers and office staff, which it argues is forbidden by federal law. Sorensen says Trotter’s changed its compensation plan last fall and also began adding an 18 percent service charge to bills. “When they changed it I started wondering, were they doing it wrong before? They didn’t address that. This is nothing against the Trotter organization. It’s really just about following the laws and getting paid what we were supposed to get paid.” Werman is attempting to get the case certified as a class-action lawsuit, which would include 24 to 30 people who worked at Trotter’s during the four-and-a-half-year period it covers (from 1998 to 2002).
When the trusts were established in January 2002, they were funded with nearly four million shares of Eli Lilly and Company stock. But, as everyone knows, it’s a bad idea to keep your assets in one basket, especially, say, when patents are running out. The beneficiaries claim the bank, as trustee, was supposed to dump the Lilly stock and diversify, pronto. According to the legal documents, the bank indicated that it would. (National City did not return calls.) But no Lilly stock was sold in January or February, and the bank continued to sit on most of it through the spring and summer while it took a sickening dive. In September and October, with the price down to about $48 (from about $75 nine months earlier), every bit was sold. The trusts, worth a total of $286 million in January, had shrunk to $183 million. In November 2002 the bank took the unusual step of asking the Indiana court to “exonerate” its actions, and Americans for the Arts (based in D.C.) filed a counterclaim and spurred the other beneficiaries to join it. The bank has moved to dismiss the suit; Poetry has until August 1 to respond.
Art accompanying story in printed newspaper (not available in this archive): photo/Robert Drea.
