Restaurant Associates Events Corp.

ABBEY SPANIER RODD & ABRAMS, LLP FILES EMPLOYEE LAWSUIT AGAINST RESTAURANT ASSOCIATES EVENTS CORP. AND COMPASS GROUP FOR UNFAIR EMPLOYMENT PRACTICES

On April 6, 2011, Abbey Spanier filed a class action lawsuit against Restaurant Associates Events Corp. and its parent company, Compass Group, for unlawful retention of gratuities in violation of New York Labor Law.

The complaint alleges that defendants added "service charges" ranging from 15% to 20% of all charges billed to customers for catering services at many high-profile New York City venues and shared none or virtually none of it with the catering service employees who worked for them. Defendants failed to explain to their customers that the service charges were not gratuities.

In addition to their failure to disclose that the service charge was not a gratuity, Defendants also prevented their own employees from doing so: catering service employees may be terminated for discussing gratuities with a customer, they are not permitted to accept gratuities, and are not even permitted to put out a tip tray. These facts, together, would lead a reasonable customer to believe that the "service charge" is a gratuity, and therefore Defendants' retention of all or virtually of the service charge is a violation of New York Labor Law.