In an Advice Memorandum released Thursday, the NLRB’s Division of Advice concluded that employees who discussed an employer’s tip-pooling practices engaged in protected concerted activity, such that discharging the employees for this activity violated Section 8(a)(1) of the NLRA.

Employees working at a steakhouse in New York City often complained about the restaurant’s tip-pooling system. Under the system, management counted and divided tips among employees regardless of the employees’ shift.

The Advice Memorandum noted some employees “objected to the non-transparency and unfairness of the Employer’s tip compensation system” during various pre-shift and staff meetings. In response, the Employer repeatedly warned employees “to not complain or talk to each other about the tip issue, and that doing so could endanger their jobs.” The Employer repeatedly told employees that continuing to talk about the tip-pooling system would result in adverse consequences, including job losses. The four charging employees were eventually discharged pursuant to the Employer’s progressive disciplinary policy, for stated reasons including alleged insubordination and common infractions that were inconsistently disciplined.

The Advice Memorandum concluded that “employee discussions and complaints about employers’ tip policies are ‘undeniably’ protected by Section 7.” The Memorandum compared the issue here to the Board’s recent decision in Alstate Maintenance, which we previously discussed here. Alstate involved a statement made by a skycap working for a contractor at JFK International Airport. A supervisor told the skycap and three of the skycap’s co-workers that an airline had requested skycap assistance handling a soccer team’s equipment. In front of the other skycaps, the charging party employee stated that they had done a similar job earlier and did not receive a tip for it. When the soccer team arrived and the skycaps walked away, the employee told a manager that the skycaps did not want to complete the job because of the anticipated small tip.

The Board in Alstate found that the skycap’s first statement was not intended to induce group action about a workplace concern; rather, it amounted only to a mere gripe. In this case, however, the charging party employees “acted concertedly by repeatedly bringing employees’ concerns” regarding tip-pooling to management.

Also unlike the steakhouse here, the Alstate employer had no control over the customer’s tip practice, so the skycap’s statement was not for the purpose of mutual aid or protection. The steakhouse employees’ conduct was protected concerted activity as the Employer controlled the tip-pooling policy.

The Advice Memorandum also concluded there was “a nexus between the Charging Parties’ protected activity and the Employer’s discharge decisions.” The Advice Memorandum pointed to various aspects of the record that showed animus towards the employees’ complaints was a motivating factor for the discharges, such as the Employer’s targeting the employees for discussing the tip-pooling practice, and the Employer’s telling employees that it intended to “clear out” employees talking about tips. The Advice Memorandum concluded the Employer’s stated reasons for discharging the charging party employees were pre-textual. The Advice Memorandum directed that complaint issue in the case.


This is a classic case where an employer’s direct threats to quell protected activity of its employees resulted in a complaint being issued. In that regard it is unremarkable; it is fairly easy for the agency to draw a straight line between an explicit threat to terminate over group discussion (which is a separate violation of the Act) and the discharge itself. So why was the case sent to Advice?  The likely reason is the Alstate decision by the Board appeared to be similar and the Region wanted guidance as to how to proceed. In the end the Advice Memorandum and the Alstate Board Decision are consistent applications of the law. The General Counsel publishes Advice Memoranda from time to time as a guide to the public about its current thinking, and it helps to clarify the difference between a gripe about a particular type of customer, and the employer’s policy of taking tips slated for a particular employee and sharing these monies with all employees.

It is also important to note that many state and local laws prohibit punishment for discussion of compensation. Also, tip-pooling has been the subject of many a class action lawsuit alleging that the practice deprives the recipient of monies given to the person.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.