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Lazo v. Sodexo, Inc.

United States Court of Appeals, First Circuit

July 23, 2019

TRACEY LAZO; JAMEN HARPER; MUSTAPHA JARRAF, Plaintiffs, Appellants,
v.
SODEXO, INC., Defendant, Appellee. NY'COLE YOUNG THOMAS, Plaintiff,

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS Hon. George A. O'Toole, Jr., U.S. District Judge

          Edward A. Prisby, with whom Kajko, Weisman & Colasanti, LLP, John P. Regan, and Employee Rights Group, LLC were on brief, for appellants.

          Douglas J. Hoffman, with whom Jonathan R. Shank and Jackson Lewis P.C. were on brief, for appellee.

          Before Lynch, Kayatta, and Barron, Circuit Judges.

          KAYATTA, CIRCUIT JUDGE.

         Employees of a food services and facilities company sued the company for alleged violations of the Massachusetts Tips Act. The employees sought class certification, which the district court denied. Three individual cases proceeded to summary judgment, at which point each subsequently failed. The plaintiffs now appeal the class-certification and summary-judgment rulings. For the following reasons, we affirm the entry of summary judgment without reaching the merits of the class certification issue.

         I.

         Sodexo, Inc. provides food services and facilities management to a variety of educational, health care, and business institutions. It operates at various locations throughout Massachusetts, including at One Lincoln Street in Boston. At One Lincoln, Sodexo has two clients: K&L Gates LLP and State Street Bank. Sodexo operates a cafeteria for these clients' employees. It also operates an Executive Dining Room ("EDR") for both clients, offering on-site dining and catering, as well as non-direct services such as drop-off catering and unmanned buffets. These clients pay the invoices from Sodexo. Plaintiffs Tracey Lazo, Jamen Harper, and Mustapha Jarraf worked for Sodexo in the EDR in service capacities (e.g., as wait staff). Each began working in the EDR prior to September 2015.

         Since June 2008, Sodexo has subjected any orders placed through the EDR to an eighteen percent "administrative charge." Sodexo retains the proceeds generated from this charge. The administrative charge appears on invoices seen by the individuals who book the order, not the people dining in the EDR. As of September 2015, invoices for EDR services state: "The administrative charge does not represent a tip or service charge for wait staff employees or bartenders." There is no evidence these invoices were seen by people dining there.

         Sodexo also operates at the Plimoth Plantation in Plymouth, Massachusetts. Plaintiff Jarraf worked at Plimoth as a server. At Plimoth, Sodexo provides catering for private events such as weddings, showers, and meetings. From 2009 to 2015, invoices for these events contained a twenty percent "staffing charge" or "support charge." The invoices stated that the charge was "not a gratuity, but covers labor expenses for staffing your event and may exceed our actual labor cost." In October 2015, Sodexo changed the language to read:

[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.

         The plaintiffs brought suit against Sodexo for alleged violations of the Massachusetts Tips Act, Mass. Gen. Laws ch. 149, § 152A. In a nutshell, their claim is that the various administrative, support, and staffing charges belonged to them as tips. After conducting relevant discovery, the plaintiffs moved for class certification. Their proposed class encompassed "[a]t least 604 Sodexo food and beverage wait staff and service employees working at thirty-five (35) Massachusetts Sodexo locations where [Sodexo] has imposed, and improperly retained, a 'service charge,' on patron food and beverage purchases." The district court denied the motion for lack of sufficient commonality and typicality. See Lazo v. Sodexo, Inc., No. CV 15-13366-GAO, 2017 WL 5147098, at *5 (D. Mass. Nov. 6, 2017); see also Fed.R.Civ.P. 23(a)(2)-(3).

         The three individual plaintiffs' cases proceeded to summary judgment, at which point the district court held that Sodexo's actions at both One Lincoln and Plimoth Plantation were protected under the safe harbor provision of the Tips Act and granted the defendants' summary-judgment motion. See Lazo v. Sodexo, Inc., No. CV 15-13366-GAO, 2018 WL 4696740, at *3-4 (D. Mass. Sept. 28, 2018).

         The plaintiffs now appeal the district court's class-certification ...


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