Mario Batali, the New York restaurateur and celebrity chef, agreed to pay $5.25 million to settle a class-action lawsuit claiming that his restaurants had illegally confiscated part of their tips to supplement their profits, said Bloomberg.
The suit covers over 1000 employees, including busboys, servers, runners and bartenders, who worked Batali's upscale Babbo and Del Posto restaurants in Manhattan and claims that the restaurants had a policy of pocketing an amount equivalent to 4 to 5 percent of total wine sales at the end of each night from the tip pool.
Batali was sued in a New York federal court along with his business partner Joseph Bastianich, said the New York Times.
According to the complaint, employees said that "Mr. Batali, Mr. Bastianich, and their restaurants unlawfully confiscated a portion of their workers' hard-earned tips in order to supplement their own profits."
The New York Daily News reported that when the workers sued the duo two years ago, Bastianich called the suit a “shakedown” and discouraged other workers from joining their colleagues by saying “Only the lawyers make money on these lawsuits."
“The matter has been resolved to the satisfaction of all parties,” Rachel Bien, a lawyer for the employees, and Carolyn D. Richmond, a lawyer for Mr. Batali, said in identical statements quoted by the New York Times.