FIRING AN EMPLOYEE FOR REFUSING TO SHARE TIPS EXPOSES THE EMPLOYER TO A WRONGFUL DISCHARGE ACTION AND DAMAGES.
An employer told an employee that he needed to share his tips with other employees. The employee refused, and the employer terminated his employment. The employee sued claiming that his employment was terminated in violation of the Minnesota Fair Labor Standards Act (MFLSA). The trial court ruled that the MFLSA did not contemplate an action for wrongful discharge and that if the Legislature intended for employees to sue for wrongful discharge it would have included that language explicitly in the MFLSA. The Minnesota Court of Appeals disagreed and held that the MFLSA recognized a claim for wrongful discharge and the employee could seek wrongful discharge damages.
The Minnesota Supreme Court agreed with the Court of Appeals. The Supreme Court relied heavily on one provision of the MFLSA which states that “[n]o employer may require an employee to contribute or share a gratuity” and although an employee my voluntarily agree to share tips, he must do so “without employer coercion or participation.” The Supreme Court held that threatening to discharge, or actually discharging, an employee for failing to share tips is coercion. Because the MFLSA created a “broad, private cause of action for any violation” the Act contains a wrongful discharge cause of action and allows for an award of wrongful discharge damages.