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Lazo v. Sodexo, Inc.

United States District Court, D. Massachusetts

September 29, 2018

TRACEY LAZO, JAMEN HARPER, MUSTAPHA JARRAF, NY'COLE YOUNG THOMAS, and all others similarly situated, Plaintiffs,
SODEXO, INC., Defendant.



         Tracey Lazo, Jamen Harper, and Mustapha Jarraf bring suit against Sodexo, Inc., for alleged violations of the Massachusetts Tips Act, Mass. Gen. Laws ch. 149, § 152A.[1] The plaintiffs claim that Sodexo unlawfully retained money collected from patrons as service charges, rather than remitting the monies to wait staff and service employees as the statute requires. Sodexo has moved for summary judgment.

         I. Facts

         The following facts are undisputed unless otherwise noted:

         A. Sodexo's Operations at One Lincoln Street

         Sodexo provides a number of different food service options at One Lincoln Street, Boston, for the two companies located in the building, State Street Bank and K&L Gates LLP. It operates a cafeteria for State Street and K&L Gates employees, which offers traditional cafeteria-style food service and delivery of items, such as boxed lunches, to meetings throughout the building. It also operates an Executive Dining Room (“EDR”). Like the cafeteria, the EDR only offers services to State Street and K&L Gates, and not the general public. Services offered by the EDR include on-site dining, on-site catering (with or without wait staff), drop-off catering, unmanned buffets, service ware, linen rental, stationary displays, and provision of items such as balloons and flowers. Drop-off catering and unmanned buffets typically do not involve the direct service of food to a customer as a guest; rather, food is dropped off before guests arrive or guests serve themselves.

         Since June 2008, any order placed through the EDR has been subject to an 18% “administrative charge, ” which is retained by Sodexo.[2] (Aff. of Douglas J. Hoffman in Supp. of Sodexo's Mot. for Summ. J. (“Hoffman Aff.”), Ex. A. Decl. of Roger Dubois (“Dubois Decl.”) ¶ 13 (dkt. no. 100-1).) The charge applies to any service provided through the EDR, whether or not any wait staff employees are involved in the transaction. (Dubois Decl. ¶ 14-16.) The administrative charge appears on an invoice transmitted to the individual who books an order. With respect to State Street, the bills for EDR services are sent to the State Street accounts payable department for payment and are not presented to any person dining in the EDR or attending the event. State Street and K&L employees involved in booking have asked members of Sodexo management about the administrative charge many times, and Sodexo management always explained the purpose of the administrative charge, that it is retained by Sodexo, and that it is not a tip or gratuity distributed to wait staff. Beginning in September 2015, additional language was added to all EDR invoices: “The administrative charge does not represent a tip or service charge for wait staff employees or bartenders.” (Hoffman Aff., Ex. E Sodexo's Am. Resps. & Objects. to Lazo's First Interrogs. (“Sodexo's Interrogs. Resps.”) 5-6 (dkt. no. 100-5).)

         At least two Sodexo employees, the plaintiff, Mustapha Jarraf, and a co-worker, Constance Passanisi, aver that they were told by customers that they wanted to leave a tip, but that it had already been paid as part of the bill. Additionally, Passanisi avers that Sodexo management told customers that they did not need to tip and would not permit wait staff or bartenders to put out a tip jar.

         Sodexo's Operations at Plimoth Plantation

         Sodexo also provides services at Plimoth Plantation in Plymouth, Massachusetts. Sodexo offers a variety of different food service options, including a quick-service cafeteria and a series of themed dining opportunities for guests, such as a Thanksgiving Day Buffet and Harvest Dinner with the Pilgrims. Sodexo provides catering for private events such as weddings, showers, and meetings.

         From 2009 through October 2015, invoices for catered events applied a 20% fee described as a “Staffing Charge” or “Support Charge.” The invoice stated that the fee “is not a gratuity, but covers labor expenses for staffing your event and may exceed our actual labor cost. Additional line item labor charges may still apply.” (Hoffman Aff., Ex. F Decl. of Elizabeth Derosier (“Derosier Decl.”) ¶ 10 (dkt. no. 100-6).) In October 2015, the language was revised to state: “[A]ll food and beverage is subject to a 20% administrative fee and applicable state and local tax. The administrative fee does not represent a tip or service charge paid directly to wait staff, employees or bartenders; but is a charge to cover our operational costs and no additional gratuity is required.” (Id. ¶ 10 n.1.)

         Members of Sodexo management have sometimes been asked questions by Plimoth Plantation customers regarding the charge. Typically the questions have come from the customer booking the event. When asked, Sodexo managers confirmed to the customer that the charges are not tips or gratuities distributed to wait staff.

         Jarraf avers that he was told by a customer that the customer wished to leave a tip but that the tip was already included with the price.

         B. ...

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