Defendants argue that this information is necessary for purposes of impeachment or corroboration of the plaintiff's claims. A similar argument concerning payroll records arose in Davis v.B S, Inc., 38 F.Supp.2d 707 (N.D. Ind. 1998). Davis likewise involved an employee's action to uphold the tip credit provision of the FLSA, and the plaintiff's financial information, as well as the defendant's burden of maintaining payroll records, became central to the court's decision on a motion for summary judgment. Davis, 38 F.Supp.2d at 712-14.

Class Certification Order at 36. The Court reiterated that observation in its Order denying the Defendants' Motion for Reconsideration, see Doc. 143 at 5 (“[E]ven assuming the Kitchen Tip Pool was voluntary, Defendants admit that they have retained employees' tips by virtue of the kitchen managers withholding tips from kitchen employees for disciplinary reasons.”), and the cases the Court cited in that order stand for the same basic proposition: that an employer's interference with an employee's right to retain his tips through the employer's own retention or use of the proceeds of a mandatory tip pool is unlawful, see Dorsey v. TGT Consulting, LLC, 888 F.Supp.2d 670, 681 (D.Md.2012) ; Whitehead v. Hidden Tavern, Inc., 765 F.Supp.2d 878, 882–83 (W.D.Tex.2011) ; Davis v. B&S, Inc., 38 F.Supp.2d 707, 712, 714, 717 (N.D.Ind.1998) ; Brennan v. Haulover Shark & Tarpon Club, Inc., No. 74–1276–Civ, 1986 WL 587, at *16 (S.D.Fla. Jan. 27, 1986) (unpublished). Thus, the Court's prior decisions on class certification were also premised on the understanding that the evidence would show that the Defendants retained some of the Kitchen Tip Pool proceeds.

“[A]n employer is not eligible to take the tip credit, and will be liable for reimbursing an employee the full minimum wage that employee would have earned, if the employer exercises control over a portion of the employee's tips.” Id. at 894 (quoting Davis v. B & S, Inc., 38 F.Supp.2d 707, 714 (N.D.Ind.1998)). As a result, “[t]o the extent Plaintiffs were not permitted to retain their tips to pay for shortages and unpaid tabs, Defendants disqualif[y] themselves from taking advantage of the FLSA tip credit provisions.”

An employer can also convey notice by way of a prominently displayed poster containing information about the tip credit provision. See Davis v. B & S, Inc., 38 F.Supp.2d 707, 719 (N.D.Ind.1998), Marshall v. Gerwill, Inc., 495 F.Supp. 744, 753 (D.Md.1980); Bonham v. Copper Cellar Corp., 476 F.Supp. 98, 101 n. 8 (E.D.Tenn.1979). It has even been held that information conveyed through co-workers was sufficient notice.

"Congress, in crafting the tip credit provision of section 3(m) of the FLSA did not create a middle ground allowing an employer both to take the tip credit and share employees' tips." Chung v. New Silver Palace Restaurant, Inc., 246 F. Supp. 2d 220, 230 (S.D.N.Y. 2002); see also, e.g., Morgan v. Speak Easy, LLC, 625 F. Supp. 2d 632, 652 (N.D. Ill. 2007) (quoting Chung, 246 F. Supp. 2d at 230); Ayres v. 127 Restaurant Corp., 12 F. Supp. 2d 305, 308-09 (S.D.N.Y. 1998) (finding tip pool invalid as a result of general manager's participation); Davis v. B S, Inc., 38 F. Supp. 2d 707, 714 (N.D. Ind. 1998) ("an employer is not eligible to take the tip credit, and will be liable for reimbursing an employee the full minimum wage that employee would have earned, if the employer exercises control over a portion of the employee's tips"). Despite the clear weight of authority holding that employers may not participate in employee tip pools, Defendants seek to carve out a novel legal question where there is none.

The theory behind this "tip credit" is that employers may use "a portion of the employee's tip income to supplement its minimum wage obligation to the employee, so long as the employee's combined cash wage and tip income meets or exceeds the minimum wage." Davis v. B S, Inc., 38 F. Supp. 2d 707, 711 (N.D. Ind. 1998). To qualify for this tip credit, an employer must demonstrate that (1) the employee was notified of the tip payment plan; and (2) "all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips."

"[T]ip pools in which some employees receive money from the pool without contributing to it are not per se invalid." Davis v. B S, Inc., 38 F. Supp. 2d 707, 717 (N.D. Ind. 1998) (citing Kilgore, 160 F.3d at 301-02 (upholding a tip pool in which certain employees derived their tip income solely from the tip pool; these employees were not allowed to take tips from customers and therefore had no tip income to contribute to the pool)); Dole v. Continental Cuisine, Inc., 751 F. Supp. 799, 801-03 (E.D. Ark 1990) (upholding a mandatory tip pool that benefitted a maitre d' who did not receive tips himself or contribute to the pool; waitstaff contributed 40 percent of the tip income to the pool); Marshall v. Krystal Co., 467 F. Supp. 9, 13 (E.D. Tenn. 1978) (finding that waiters, bus persons, and bartenders were permitted to derive their tip income from a tip pool); 29 C.F.R. § 531.54 (noting tip pools may include employees such as busboys). "It is customary for waiters/waitresses to receive gratuities and share them with the busboys/busgirls who assist in serving the patrons."

Put differently, the law establishes a minimum amount that employers must pay tipped employees in regular hourly wages, regardless of how much employees make in tips. See 29 U.S.C. § 203(m); New York Labor Law § 652(4); New Silver Palace I, 246 F. Supp. 2d at 228; Davis v. B S, Inc., 38 F. Supp. 2d 707, 711 n. 4 (N.D. Ind. 1998). These requirements are not at issue here.

Rasp., at 8-9.) See Davis v. BS, Inc., 38 F. Supp.2d 707, 714 (N.D. Ind. 1998) ("an employer is not eligible to take the tip credit, and will be liable for reimbursing an employee the full minimum wage that employee would have earned, if the employer exercises control over a portion of the employee's tips"). Defendants respond that in similar circumstances, "courts have not turned to the extraordinary remedy of unjust enrichment to award employees all of the tips collected during the applicable period" but, instead, have awarded employees an amount equal to the minimum wage. (Def.

Although the Third Circuit has not yet addressed the issue, courts have recognized that an employee may qualify as a "tipped employee" under the FLSA even though they do not receive tips directly from a customer. See Kilgore v. Outback Steakhouse of Fla., Inc., 160 F.3d 294, 301 (6th Cir. 1998) (affirming summary judgment after finding hostesses, bussers, and bartenders were tipped employees allowed to be included in the tip pool despite not receiving tips directly from customers because this approach is consistent with the statutory language and the employees sufficiently interacted with customers); Davis v. B&S, Inc., 38 F. Supp. 2d 707, 717 (N.D. Ind. 1998) (explaining "the mere fact that the bartenders may have received money from the tip pool but were not required to contribute to the pool does not render the pool invalid as a matter of law").