JOHNSON, J. I respectfully dissent.
Contrary to my colleagues I am convinced a triable issue exists whether a restaurant knowingly had one of its waitresses sign a false affidavit in order to deprive her of the “split shift premium” to which she otherwise would have been entitled. I further am convinced that Labor Code section 351 prohibits a restaurant from compelling a waitress to share her tips with a busboy or bartender.
The majority and I differ significantly in our view of the facts. Accordingly, I will summarize briefly my version to establish a framework for discussion of the legal issues.
The appellant, Marilena Leighton, began working as a waitress at respondent’s restaurant, Old Heidelberg, in August 1984. At that time she signed an affidavit under penalty of perjury stating she could not work during the middle of the afternoon. The affidavit further recited that for her own [1076]convenience she was only employed for the lunch hour and the dinner hour. (Because of the facts stated in this affidavit, Old Heidelberg was not required to pay the “split shift premium” the Industrial Welfare Commission regulations impose where employees are required to work split shifts.)
At the time Ms. Leighton was hired and throughout her employment she was required, as a condition of employment, to pay 15 percent of the tips she received to busboys and 5 percent to bartenders. She was required to make these payments out of her tip income even where customers did not order any drinks from the bar.
In early February 1987, Ms. Leighton balked at paying 15 percent of her tip income to the busboys and 5 percent to the bartender. As a consequence she was suspended for 10 days. When she returned she again refused to abide by Old Heidelberg’s tip-sharing requirement and was discharged for that reason.
On May 10, 1988, Ms. Leighton filed a complaint in the Los Angeles Municipal Court alleging four causes of action. The first cause of action is for wrongful discharge claiming Ms. Leighton was fired for refusing to abide by an unlawful employer-mandated tip-pooling requirement. The second cause of action is for breach of the covenant of good faith and fair dealing, once again based on the imposition of an unlawful employer-mandated tip-pooling requirement. The third cause of action seeks to recover unpaid split shift premiums required by State of California Industrial Welfare Commission wage orders. And the fourth cause of action seeks to require Old Heidelberg to repay Ms. Leighton all of the tip income she paid over to busboys and bartenders during the period of her employment.
As reported in the majority opinion, the municipal court granted Old Heidelberg’s summary judgment motion, the appellate department affirmed, and we transferred the cause to this court for hearing and decision pursuant to rule 62(a) of the California Rules of Court.
This case poses two questions. Contrary to my colleagues, I am convinced there are triable issues as to both major theories of liability in this case. First, a triable issue exists whether Old Heidelberg knowingly took a false affidavit from Ms. Leighton in order to avoid paying her a “split shift premium.” The resolution of this triable issue will determine whether she is entitled to recover unpaid “split shift premium” payments for the period of her employment with Old Heidelberg. Second, I find a triable issue exists whether an employer can lawfully impose an employer-mandated tip-split[1077]ting program, requiring employees who receive tips to share those tips with other employees of the establishment. The resolution of that issue, in turn, will determine whether Old Heidelberg could lawfully discharge Ms. Leigh-ton for refusing to comply with the restaurant’s requirement she share her tips with busboys and bartenders.
I. There is a Triable Issue as to Whether Appellant Was Coerced Into Signing a False Affidavit in Order to Deprive Her of Her Statutory Right to a “Split Shift Premium. ”
My colleagues and I are in agreement that under California law an employee who works a “split shift” is entitled to a wage premium amounting to one hour’s wage for each day on which the employee worked a split shift.1 (As the words imply, an employee works a split shift when her hours of employment are split between two or more periods during the day, divided by a period when the employee does not work and does not receive a wage.) Ms. Leighton’s complaint alleges she is owed approximately $1,600 in unpaid split shift premiums at the rate of $3.35 for each day she worked at the Old Heidelberg restaurant.
In support of its summary judgment against this cause of action Old Heidelberg introduced an affidavit Ms. Leighton signed shortly after commencing employment at the restaurant. In this affidavit Ms. Leighton stated she was unavailable to work between the lunch and dinner shifts and thus the split shift was for her convenience and not for that of the restaurant. (If the “split shift” arrangement were for Ms. Leighton’s benefit rather than the employer’s benefit, then she would not be entitled to the “split shift premium.”)2
The majority chooses to diminish the significance of Ms. Leighton’s response to the summary judgment motion, however, including her declaration this affidavit was false and she only signed it because Old Heidelberg required her to execute the affidavit. Furthermore, in her declaration she testifies she in fact was available to work between lunch time and dinner time.
[1078]She further testified in the declaration that she had worked straight through between lunch time and dinner time on many occasions when that suited the convenience of Old Heidelberg.
The affidavit Ms. Leighton executed under penalty of perjury and the declaration she submitted also under penalty of perjury in opposition to the motion for summary judgment are in direct conflict. As I see it, these two documents create a factual issue which should be decided at trial before a jury or a judge. A trier of fact who believed Ms. Leighton’s declaration could reasonably infer she was required to sign the false affidavit as a condition of her employment in order to save Old Heidelberg the added expense of paying her a “split shift premium.” (These premiums are not insignificant. For a full-time employee paid at or near the minimum wage, a split shift premium increases her paycheck by over 10 percent. Conversely, by avoiding that premium, Old Heidelberg can cut an employee’s pay by that same 10 percent.)
Employers cannot evade the labor regulations of the State of California through the simple expedient of requiring employees to sign untruthful documents as a condition of employment. If they could, almost any labor regulation could be nullified by having employees lie about how old they were, their citizenship status, what they were paid, what hours they were being required to work, what duties they were being asked to perform, what risks they were being required to take, and the like. Accordingly, if Ms. Leighton’s declaration proves accurate and if the trier of fact draws the reasonable inference the affidavit was false and she was required to sign that document as a condition of employment then the affidavit would be of no legal effect. As a result, Ms. Leighton would be entitled to all the unpaid split shift premiums which accumulated during her period of employment with Old Heidelberg. Moreover, under Labor Code section 218.53 she also would be entitled to attorney’s fees.4
If true, Ms. Leighton’s declaration describes conduct by an employer which the judicial system of California cannot tolerate. Indeed although Ms. Leighton’s complaint does not request punitive damages for this cause of action—while it does for others—this is the very sort of egregious and oppressive conduct which, if true, might well support a punitive damage award. (See, e.g., Hentzel v. Singer Co. (1982) 138 Cal.App.3d 290 [188 [1079]Cal.Rptr. 159, 35 A.L.R.4th 1015] [punitive damages authorized where employer retaliated against employee for protesting unhealthful working conditions]; Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 [164 Cal.Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th 314] [punitive damages appropriate where employee discharged for refusal to engage in price fixing as condition of employment].) We are charged with the responsibility of subjecting summary judgments to the closest possible scrutiny. “The summary judgment procedure, inasmuch as it denies the right of the adverse party to a trial, is drastic and should be used with caution. Summary judgment is properly granted only when the evidence in support of the moving party establishes that there is no issue of fact to be tried. . . . [D]oubts as to the propriety of summary judgment should be resolved against granting the motion.” (Gomez v. Ticor (1983) 145 Cal.App.3d 622, 626-627 [193 Cal.Rptr. 600].)
Under this standard of review I see no way of escaping the conclusion a triable issue is created by the conflict between Ms. Leighton’s declaration and the affidavit she gave to Old Heidelberg. According to the prevailing law Ms. Leighton’s declaration, since it comes from the party opposing summary judgment, is to be “liberally construed.” (Gomez v. Ticor, supra, 145 Cal.App.3d 622, 627.) If so construed, it establishes the falsity of the affidavit Old Heidelberg required Ms. Leighton to sign and Old Heidelberg’s knowledge of that falsity. Those are issues of fact that determine whether Ms. Leighton is entitled to recover unpaid “split shift premiums” from Old Heidelberg. In my view, her declaration creates more than “doubts” about the propriety of summary judgment on this cause of action and, accordingly, I would reverse this portion of the judgment.
II. Employer-mandated “Tip Pooling” Violates Labor Code Section 351.
The second issue revolves around the proper interpretation of section 351 which reads in pertinent part as follows: “No employer or agent shall collect, take, or receive any gratuity or a part thereof, paid, given to or left for an employee by a patron, or deduct any amount from wages due an employee on account of such gratuity, or require an employee to credit the amount, or any part thereof, of such gratuity against and as a part of the wages due the employee from the employer. Every such gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for . . . .”
Section 356, in turn, emphasizes: “The Legislature expressly declares that the purpose of this article [including section 351] is to prevent fraud on the public in connection with the practice of tipping and declares that this [1080]article is passed for a public reason and cannot be contravened by a private agreement . . . .”
Neither my colleagues nor myself managed to uncover any previous court decision addressing the legitimacy of employer-mandated tip pooling under section 351. Prior decisions instead have focussed on whether this section prohibits employers from using an employee’s tip income to discharge the employer’s obligation to pay an employee the minimum wage. Thus, in Industrial Welfare Commission v. Superior Court (1980) 27 Cal.3d 690, 730 [166 Cal.Rptr. 331, 613 P.2d 579] the California Supreme Court held section 351 contemplated “that tips received by an employee would not reduce an employer’s minimum wage obligation, either directly or indirectly.” And in Henning v. Industrial Welfare Commission (1988) 46 Cal.3d 1262 [252 Cal.Rptr. 278, 762 P.2d 442] the court struck down a regulation establishing a lower minimum wage for employees who receive tips than for those who do not on grounds it violated section 351.
In reviewing the language of section 351, I heed the cardinal principle of statutory construction to give effect to every sentence and word in the statute. As our high court has stated: “ ‘We begin with the fundamental rule that a court ‘should ascertain the intent of the Legislature so as to effectuate the purpose of the law.’ In determining such intent ‘[t]he court turns first to the words themselves for the answer.’ We are required to give effect to statutes ‘according to the usual, ordinary import of the language employed in framing them.’ ‘If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose.’ ‘[A] construction making some words surplusage is to be avoided.’ ‘When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.’ ‘Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole.’ ” (Palos Verdes Faculty Assn. v. Palos Verdes Peninsula Unified Sch. Dist. (1978) 21 Cal.3d 650, 658-659 [147 Cal.Rptr. 359, 580 P.2d 1155].) (Citations omitted.)
The respondent, Old Heidelberg, argues that the sole purpose of section 351 is to prevent employers from crediting tips against the minimum wage and to require them to pay employees at least the minimum wage in addition to the employees’ share of the tips they receive. However, this interpretation turns the first and the last portions of section 351 into mere surplus-age.
The first clause of section 351 emphasizes: “No employer or agent shall collect, take, or receive any gratuity or a part thereof, paid, given to or left [1081]for an employee by a patron, . . .” (Italics added.) Meanwhile, the last sentence in this same section guarantees: “Every such gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” (Italics added.) It is only the middle portion of section 351 which deals with the use of tip income as a deduction from wages the employer owes the employee or as a credit of tip income against wages the employer owes the employee. But the language of section 351 surrounding this very specific limitation of the employers’ use of gratuities goes beyond that special situation to declare a much more fundamental proposition—that tips are the “sole property” of the employee and not to be controlled in any way by the employer.
Section 351 expressly states “no employer or agent shall . . . take . . . any gratuity or a part thereof paid, given to or left for an employee by a patron . . . .” The term “take” has several meanings, among them “to deprive one of the use or possession of . . . .” (Blacks Law Diet. (5th ed. 1979) p. 1303, col. 2.) That is, it is not necessary that the employer have physically received the gratuity or a portion thereof to violate section 351. It is only necessary the employer deprive the employee of the use of the gratuity or a part thereof, as it does by ordering the employee to transfer part of the gratuity to a third person. The criminal law recognizes a “taking” can occur without the “taker” actually receiving the property himself. For instance, extortion is defined as “the obtaining of property from another, with his consent . . . induced by . . . force or fear . . . .” (Pen. Code, § 518.) It has been held that extortion has occurred even where the perpetrator does not handle the money directly, but rather orders the money to be paid over to a third person. (See, e.g., United States v. Bonnano (9th Cir. 1972) 467 F.2d 14, cert. den. (1973) 410 U.S. 909 [35 L.Ed.2d 271, 93 S.Ct. 964] [conviction of extortion confirmed where victim ordered to pay off loan to a third party hired for the purpose of collection]; United States v. Polizzi (9th Cir. 1986) 801 F.2d 1543 [victim of extortion ordered by defendant to pay widow of crime boss directly].)
In the instant case, the employer is “taking” a portion of the employee’s gratuity through its employer-mandated tip-pooling plan. Old Heidelberg deprived Ms. Leighton of the use of that portion of the gratuities she received which the restaurant required her to turn over to the busboy and the bartender. So Old Heidelberg’s employer-mandated tip-pooling requirement contravenes the first clause of section 351 even though its employees are not required to turn over any of their gratuities directly to Old Heidelberg itself. The restaurant is still exercising an unlawful dominion over gratuities their customers intended for the employee to whom they gave those gratuities. Old Heidelberg is doing the prohibited act—it is “tak(ing) [1082]... a gratuity or a part thereof paid, given to or left for an employee by a patron.”
Not only did Old Heidelberg “take” Ms. Leighton’s tips in the sense it deprived her of the use of the 20 percent she was required to share with other employees, the restaurant derived a benefit for itself from the coerced sharing. This kind of employer-enforced tip pooling is just a disguised way of requiring waiters or waitresses to pay the market salaries of busboys and bartenders. This practice benefits the employer by having others pay this salary enhancement. It may also give the employer a competitive edge in hiring and maintaining busboys and bartenders by being able to offer the added attraction of guaranteed tip sharing. Because the tips are distributed in accordance with the employer’s directives and in part for his benefit, this exercise of dominion and control over the tips is tantamount to declaring them to be his personal property. This is logically as well as legally inconsistent with the prohibition against “taking” a portion of a gratuity and with the statutory declaration that gratuities are the “sole property” of the employee.
Section 351 guarantees all gratuities shall be the personal property of the “employee or employees” to whom they are given. Old Heidelberg claims when a customer leaves a tip he or she leaves it not just for the waiter but for the busboy and the bartender. (Presumably Old Heidelberg is arguing that people who do not order a liquor drink are still intending to give a portion of their gratuity to the bartender.) However, Old Heidelberg submitted no evidence at the summary judgment hearing to support this contention about the intent of customers who leave tips. Indeed the only evidence which either side attempted to introduce was a declaration by the appellant’s attorney. He testified to having conducted a poll of approximately 30 restaurant customers all of whom said that when they left a tip it was solely for the waiter or waitress who had served them and not for the busboy or other restaurant employees. This evidence was ruled inadmissible, and properly so.
Surveys are often admitted over the hearsay objection as within the recognized exception for statements of present state of mind, attitude or belief. (See, e.g., McCormick, Evidence (3d 1984) § 208, p. 641; Annot. (1961) 76 A.L.R. 2d 619; 6 Wigmore, Evidence (Chadborne ed. 1976) § 1731, p. 154; 29 Am.Jur.2d, Evidence, § 502, pp. 559-560.) Alternatively, Evidence Code section 801 permits an expert to testify to an opinion based on facts or data that are not admissible in evidence and to testify about this underlying information as long as it is of the “type that reasonably may be relied upon by experts” in the particular field. (Comment to Evid. Code, § 801.) Case specific surveys are generally admissible if they are conducted according to [1083]the principles accepted by social scientists and statisticians for gathering and analyzing survey data. (See, e.g., Baumholser v. Amax Coal Co., (7th Cir. 1980) 630 F.2d 550, 552 [“To qualify a study or opinion poll for admission into evidence, there must be a substantial showing of reliability. There must be some showing that the poll is conducted in accordance with generally accepted survey principles and that the results are used in a statistically correct manner.”].) Once a survey has been shown to conform to “conventional methodology,” its arguable deficiencies usually are said to affect its weight rather than its admissibility. (See, e.g., Squirt Co. v. Seven-Up Co. (8th Cir. 1980) 628 F.2d 1086.) Evidence Code section 1250 recognizes a present state of mind exception. However, a statement is still not admissible under Evidence Code section 1250 if the statement “was made under circumstances indicating that the statement is not trustworthy.” (Comment to Evid. Code, § 1250; see also Evid. Code, § 1252 [statements inadmissible if circumstances indicate lack of trustworthiness].) Since the poll in this case was admittedly a small, informal poll with no attempt to conform to “conventional methodology,” the trial court properly found the results of the poll lacking any indicia of reliability or trustworthiness and as such inadmissible.
However, it was not appellant’s burden to prove restaurant customers do not intend the tips they leave are to be divided among the waiter, the busboy and the bartender. Instead it was Old Heidelberg’s burden to prove they do intend that result. So the fact the appellant’s evidence on this question is inadmissible does not constitute affirmative evidence on the opposite side of the issue. Accordingly, this remains a triable issue.
There is nothing in section 351 which reasonably can be read to support the proposition the employer is empowered to decide which employees the restaurant’s customers intended to receive the tips they left. The statute sets this up as a matter between the giver—the restaurant customer—and the receiver—the employee (or employees)—for whom the gratuity is left. It would be contrary to the intent that tip income be the “personal property” of the employees involved to give that kind of discretion to the employer.
Old Heidelberg attempts to make much of the presence of the plural word “employees” in the clause containing the personal property guarantee in section 351. This language is necessary to accommodate situations where a customer intends and expressly declares that a given gratuity is intended for two or more employees or where a given customer is actually served by first one waiter then another (because of a change of shifts) and intends that both of them share in the gratuity or where a banquet giver pays a large gratuity intended to be shared by all the waiters who served those attending the banquet. But this does not mean it is up to the employer in the ordinary [1084]situation, without the customers’ knowledge, to require the waitress to whom the customer gave the tip to divide that gratuity with other employees the employer deems to have been the intended recipient of the customers’ largess.
It is apparent in both sections 351 and 356 the Legislature intends that the customers' intent be implemented and that gratuities remain the personal property of the individual employee for whom the customer intended the gratuity to represent additional income. If, and only if, the customer intends to reward more than one employee should a given gratuity be deemed the personal property of more than one employee.
It is noteworthy Old Heidelberg did not introduce any evidence that might exist about their customers’ intent when they gave gratuities to Ms. Leighton or other waiters or waitresses. For instance, if the credit card slips used at this restaurant listed not just the waiter as the recipient of any entry the customer desired to make for a gratuity but listed “waiter/busboy/bartender” that would have been evidence in support of Old Heidelberg’s position. (Conversely, if the credit card form only lists “waiter” or, as is typical, has a separate line for gratuities for “waiter” and “captain” this would be evidence in support of Ms. Leighton’s position on this issue.) But significantly, Old Heidelberg introduced no evidence to support its contention their customers intended some substantial portion of the gratuities to be allocated to the busboys and bartenders when they handed their tips to Ms. Leighton or left the tip at the table where she had served them.
If a customer provides a tip by entering a figure on a credit card slip in a box labelled “waiter,” it is apparent the customer has paid that tip to the waiter only and not to the waiter, busboy and bartender. Similarly if the customer hands a sum of money to the waiter it is apparent that gratuity is intended for the waiter and the waiter only unless the customer expressly instructs the waiter to divide it with others. If the customer wishes to reward the busboy or bartender as well as the waiter, the customer ordinarily will give some of the money to the waiter, then hand the busboy another sum of money, and give the bartender his own as well. The only situation with any ambiguity is when the customer merely leaves some cash behind on the table. Yet Old Heidelberg introduced no evidence as to the intent of customers who left money behind on tables served by Ms. Leighton. Nor did the restaurant introduce evidence about the general intent of customers who leave money behind after paying their bills at restaurants. Nor did Old Heidelberg introduce any evidence as to the relative frequency with which gratuities were given through entries on credit card slips or the physical [1085]handing over of money to a specific employee versus merely leaving cash on the table.
We find it relevant to observe the Division of Labor Standards Enforcement (DLSE) of the Department of Industrial Relations interpreted Labor Code section 351 to preclude employers from exercising this type of dominion over gratuities received by their employees. In an “interpretive opinion” issued in 1984, DLSE said: “Under Labor Code Section 351, tips are clearly the sole property of the employee or employees to whom they are paid, given or for whom they are left. Therefore, it is not permissible for an employer to assert dominion or ownership of any kind over a tip left for a waitress or any other employee.
“[Section 351] must be interpreted to mean that an employer is not permitted to collect tips from one classification of employee (for example, waitresses) for the purpose of distributing a portion of these tips to other employees (for example, busboys or chefs). Further, it would not be permissible for an employer to deduct from wages an amount representing all or any portion of tips paid or given to one classification of employee for the purpose of distributing tips to other employees ....
“Any tip pooling arrangement must be completely voluntary on the part of the participating employees and must not have originated with the employer. The employer must not request that the employees enter into such an agreement, and any such agreement must be entirely free of any coercion or duress, express or implied, exerted by the employer on the employees involved. The employer must not, directly, by implication, or otherwise, convey to the employees involved the idea that the employer wishes or expects the employees to enter into such an agreement, and the employer must not threaten, expressly or impliedly, sanctions or retaliation of any kind to anyone for not so agreeing.
“The employer may not make a tip-pooling arrangement a condition of employment or continued employment.” (DLSE, Interpretive Bulletin 85-4, “Tip Splitting—Labor Code Section 351,” pp. 1-2, italics added.)
This DLSE “Interpretive Bulletin” was promulgated on August 20, 1985, and was still in effect in February 1987, at the time Old Heidelberg fired Ms. Leighton for refusing to comply with its employer-mandated tip-pooling edict. On March 25, 1987, the Office of Administrative Law (OAL) suspended this “administrative interpretation” on grounds it was in fact a regulation and needed to be reissued with the formalities required of administrative regulations. (1987 OAL Determination No. 4.) Nonetheless, it is instructive the administrative agency charged with the responsibility of [1086]administering Labor Code section 351 has interpreted that statute to ban employer-mandated tip-pooling plans. (See, e.g., Culligan Water Conditioning v. State Board of Equalization (1976) 17 Cal.3d 86, 93 [130 Cal.Rptr. 321, 550 P.2d 593] [“‘an administrative agency’s interpretation . . . obviously deserves great weight.’”]; Los Angeles v. Superior Court (1941) 17 Cal.2d 707, 712 [112 P.2d 10] [“an administrative construction of a statute . . . will be accorded great respect by the courts, and will be upheld, if not clearly erroneous.”]; Bank of Alameda County v. McColgan (1945) 69 Cal.App.2d 464, 470 [159 P.2d 31] [“The rule is that administrative construction is considered when some uncertainty appears.”].)
The majority appears to equate the administrative interpretation rendered by the agency charged with enforcing the Labor Code—the Division of Labor Standards Enforcement—and the opinion of the Office of Administrative Law suspending that interpretation. However, these bodies are not equal and are not entitled to the same deference in the courts. The primary rationale for giving credence to administrative interpretations of statutes only supports DLSE and not OAL. That rationale is the presumed expertise of the administrative agency in the narrow range of laws its staff is charged with administering and must deal with on a daily basis coupled with the presumed expertise of the agency in the practical effects of those laws on the industries the agency is regulating. (See, e.g., Jaffee, Judicial Control of Administrative Action (1965) pp. 28-33; California Hotel & Motel Assn. v. Industrial Welfare Com. (1979) 25 Cal.3d 200, 211-213 [157 Cal.Rptr. 840, 599 P.2d 31]; Mission Pak Co. v. State Bd. of Equalization (1972) 23 Cal.App.3d 120, 124-125 [100 Cal.Rptr. 69]; Ralphs Grocery Co. v. Reimel (1968) 69 Cal.2d 172, 175 [70 Cal.Rptr. 407, 444 P.2d 79].)
DLSE is entitled to the presumption because it has acquired familiarity with the labor laws it enforces and the workplace in which those laws function. OAL has no special expertise in labor law or the workplace. That administrative office merely looked at the language of the statute in the abstract—not as part of the flesh and blood of the workplace—and said it was susceptible of more than one interpretation. The courts are as capable as OAL of that quintessential judicial task. In contrast, we are less well equipped than DLSE to evaluate how this statute will operate in the workplace. Accordingly, in my opinion we have good reason to give more deference to DLSE’s interpretation than to OAL’s interpretation of section 351.
In no sense should my dissent be read as urging a ban on voluntary “tip-pooling” compacts among employees of a business establishment. Section 351 only prohibits compulsory “tip-pooling” which employers impose on their employees. The Labor Code specifically guarantees that each tip is to be the “personal property” of the employee to whom it is given. But for the [1087]very reason it is the employee’s personal property, the employee is free to dispose of that tip in any way he or she desires. This includes entering into an agreement with other employees that all such tips shall be pooled and divided by a formula they all find acceptable. If “tip-pooling” indeed serves the collective interests of Old Heidelberg’s employees and not just the profit motives of the employer, we suspect the practice will survive.
I observe once again the administrative agency charged with overseeing enforcement of section 351 interpreted this statutory provision to allow voluntary, employee-initiated tip-pooling arrangements. In Interpretive Bulletin 85-4, DLSE said: “The Division has been asked whether, under Labor Code Section 351, it is permissible for waitresses to enter into an agreement among themselves and/or with other employees to ‘split’ or ‘pool’ their tips with busboys and/or other employees ....
“It may . . . reasonably be concluded that under . . . Section 351, a tip splitting or tip pooling arrangement (tip pooling) among waitresses, busboys and other employees is permissible if entered into voluntarily by the employees themselves. The agreement would be applicable only to those employees who willingly participate in the agreement, and would not aifect any employee who is not a participant ....
“It would also be permissible for the employer, with the consent of the employees who have agreed to a tip pooling arrangement, to act as a custodian or trustee of tips for the purpose of distributing the tips, in accordance with the agreement, at intervals not less frequently than every payday.” (DLSE, Interpretive Bulletin 85-4, supra, pp. 1-2.)
As mentioned earlier, the OAL suspended DLSE Interpretive Bulletin 85-4 because it represented a regulation—not a mere interpretation. Yet, once again, I find it instructive the agency actually charged with responsibility for administering section 351 found the law permitted voluntary, employee-initiated tip-splitting plans but not those employers impose on unwilling employees.
The majority apparently endorses Old Heidelberg’s argument that there would be “chaos” in the workplace if employers could not unilaterally decide who was to share in tips and how much each employee was to receive. I submit this underestimates the level of collective collaboration a group of employees can achieve even in the absence of a union presence on the premises. And it completely overlooks the role a union can play in those restaurants and other businesses which have been unionized. I also find it revealing that the agency with the most experience in how laws aifect the workplace—DLSE—expressed no concern enforcement of section 351 to [1088]bar employer-dictated tip-pooling would somehow lead to “chaos” in the affected businesses. Can we really say the courts are in a better position to evaluate the employers’ claim that the “sky is falling” than the agency which on a daily basis is called upon to balance employer and employee claims about what will happen in the workplace if this or that restriction is imposed? I think not.
Still, the most important reason for rejecting Old Heidelberg’s claim of “chaos in the workplace” is the language of section 351 itself. The Legislature chose to declare gratuities are the personal property of the employees and to deny employers any dominion over that personal property. If the Legislature had wanted to confer on employers the power and responsibility to decide whose personal property those gratuities represented and in what proportions it could have done so. But our lawmakers instead chose to deny employers this power and responsibility in unequivocal terms. The proper forum for Old Heidelberg’s argument that employers must play this role to avoid “chaos”—assuming the argument has any merit whatsoever—is the Legislature not the courts. In the absence of the evidence Old Heidelberg failed to produce in this case—evidence that people giving or leaving tips for waitresses in restaurants intend those tips to be shared with busboys and bartenders and whoever else the employer designates—some might doubt whether Old Heidelberg would convince many legislators to amend the law to give it authority to divide tips among its employees. Nonetheless, that is the proper forum for the plea.
Finally, Old Heidelberg argues Ms. Leighton was aware of the employer-mandated tip-pooling requirement at the time she accepted employment at the restaurant. Furthermore, she signed a statement under penalty of perjury that she could not work between the lunch and dinner shifts. Accordingly, Old Heidelberg urges, having accepted employment under these conditions, she is not entitled to complain if she is discharged for suddenly refusing to continue complying with the requirement. Nor is she entitled to renege on her affidavit.
The public policy of the State of California cannot be so easily defeated. The employer-mandated tip-pooling arrangement was unlawful under section 351 unless Old Heidelberg can prove its customers intended the gratuities it gave to Ms. Leighton were to be shared with the busboys and bartenders. An employee cannot be compelled to continue in an unlawful arrangement merely because she accepted those terms in order to gain and retain her employment.5
[1089]Civil Code section 1441 provides “A condition in a contract, the fulfillment of which is impossible or unlawful, ... is void.” The condition Old Heidelberg imposed requiring Leighton to turn over part of her tip income to the busboys and bartenders is unlawful and thus void and unenforceable. Nor can an employee be discharged for refusing to continue going along with an unlawful practice. (See, e.g., Tameny v. Atlantic Richfield Co., supra, 27 Cal.3d 167 [tort action for wrongful discharge may lie if the employer conditions employment upon required participation in unlawful price fixing by the employee]; Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 [254 Cal.Rptr. 211, 765 P.2d 373] [reaffirmed validity of wrongful discharge causes of action in tort because they vindicate the public interest by not permitting employers to impose as a condition of employment a requirement that an employee act in a manner contrary to fundamental public policy]; Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184 [344 P.2d 25] [employee wrongfully discharged for refusing to commit perjury]; Garcia v. Rockwell Internal. Corp. (1986) 187 Cal.App.3d 1556] [232 Cal.Rptr. 490 [disciplinary action taken against employee for reporting to authorities policy of overcharging time inappropriate]; Dabbs v. Cardiopulmonary Management Services (1987) 188 Cal.App.3d 1437 [234 Cal.Rptr. 129] [employee wrongfully discharged in retaliation for refusing to continue to work in conditions which endangered health and safety of patients under her care].)
To allow employers to impose illegal work rules as a condition of employment or to allow employers to discharge employees for failing to abide by these illegal requirements would nullify most laws designed to govern the work place. Particularly in times when jobs are difficult to find, an employer can find people willing to sign almost any document and to accept any terms even those which directly violate the Labor Code. That does not make those coerced documents legally valid nor does it make those coerced terms of employment legally binding.
Having considered all the legal arguments, I am left with the fact there are triable issues on the three causes of action based on the employer-dictated tip-pooling arrangement. Indeed to find otherwise I would have to accept absurd propositions, such as that as a matter of law it can be said customers who only order water, milk, coffee or tea intend that 5 percent of the tip they personally hand to their waitresses is to become the “personal property” of the bartender. Old Heidelberg understandably introduced no evidence to that effect in the trial court. So I would have to accept this extraordinary statement about human nature as self evident, as something I [1090]am to regard as not requiring proof of any kind. For, if proof is required, it was not forthcoming and so the issue remains in dispute as a classic “triable issue.” Similarly, there is a triable issue whether customers intended that 15 percent of the tips they personally gave to their waitresses was to be the “personal property” of the busboys. Old Heidelberg’s position on this issue is somewhat less incredible. But it is not something I am persuaded is true as a matter of law.
In conclusion, I am concerned we are dealing too lightly in this case with a person’s property rights. Through section 351 the Legislature has given legislative recognition and statutory protection to a species of property—the gratuity an employee receives from a customer. In a very real sense, these gratuities are a form of property right. (Indeed to Ms. Leighton this may be the most important property right she possesses—since tips may represent the bulk of her annual income.) As such this property right is entitled to the same level of legal protection and the same degree of judicial scrutiny as a house or land or furniture a person might own.
The contours of this property right are dictated by the intent of the giver—that is, the customer—and not the preferences of the employer. Nor does the law delegate to employers the right to “adjudicate” these property rights. In fact, section 351 specifically denies employers that power, in part because the lawmakers recognize employers have an inherent conflict of interest. They can lower their own labor costs and thus raise their own profit margins by deciding a certain way, that is, by deciding those who receive this form of personal property shall share it with others who can then be paid lower than market wages.
The law must be as vigilant in its protection of the property rights of ordinary working people as it is of the property rights of the largest corporation or the wealthiest landowner. How would the courts react if a private person unilaterally decided to divest a business of a fifth of its earnings and hand them over to another businessman? Or to chop off a fifth of a landowner’s holdings and give the land to her neighbor?
Would the judges be satisfied by an explanation the appropriation was necessary to prevent “chaos” because the other businessman or neighbor might have a claim to some portion of this property? Or would they approve the unilateral transfer on the basis of speculation this fifth belonged to the other businessman or the neighbor? I seriously doubt it. Not in the nation where private property is revered as it is perhaps no place else on earth. Instead the courts would insist on convincing proof the one-fifth portion actually belonged to the other businessman or the neighbor before they would consider sanctioning the transfer.
[1091]I submit Ms. Leighton is entitled to the same careful judicial scrutiny of her property rights—her tips—as the business establishment and landowner are guaranteed to receive when their earnings or holdings are at stake. That is all she asks. And that she most certainly deserves.
For the above reasons, I would reverse the judgment and remand the cause to the municipal court for a trial on the merits.
The Industrial Welfare Commission wage order in effect during Ms. Leighton’s employment provided “When an employee works a split shift, one hour’s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment.” (Cal. Reg. Notice Register 84, No. 23, p. 776.)
The very definition of “split shift” implies the arrangement is for the benefit of the employer: “ ‘Split shift’ means a work schedule which is interrupted by nonpaid nonworking periods established by the employer, other than bona fide rest or meal periods.” (Cal. Reg. Notice Register 84, No. 23, p. 773.)
Unless otherwise specified, all further statutory references are to the Labor Code.
Section 218.5 provides in pertinent part: “In any action for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action ....’’ (§ 218.5.)
For example, section 432.5 provides that “No employer . . . shall require any employee or applicant for employment to agree, in writing, to any term or condition which is known by [1089]such employer . . . to be prohibited by law." Analogous statutes in the Civil Code also make unlawful conditions in contracts void and unenforceable.