Need a Mulligan? Caddies Prevail in Wage Suit

Wage and hour suits are becoming increasingly common, including by caddies against their golf clubs. Most recently this was in Anderson et al. v. The Hudson National Golf Club Inc. et al. 

In this case, the caddies were paid bag fees and tips by golfers, either directly or through a payment system operated by the golf club. The caddies claimed these payments were tips – meaning the golf club had not paid them any wages. Hudson National filed a motion to dismiss, claiming the bag fees ($125) were compulsory and well above the minimum wage. 

Late last week, though, Judge Kenneth M. Karas of the U.S. District Court for the Southern District of New York denied the motion to dismiss. In the opinion, Judge Karas found the caddies plausibly alleged that the golfers paid them for their candy services based on their satisfaction with the plaintiffs' performance and the bag fees were discretionary. 

Additionally, beyond just looking at Department of Labor guidance, Judge Karas cited a test used in Hopkins v. Wykagyl Country Club, another wage and hour suit filed by caddies. That test considers whether a customer who received a personal service made the payment, whether the payment was voluntary and considered the employee's property, how the payment was made, and the customer's understanding of the transaction. 

Here, Judge Karas found the caddies claimed the fees were rooted in the service they provided, golfers could pay how much they wanted without following the suggested fee of $125, and caddies directly received the fees, which were either paid in cash or through the system Hudson National used to pay the workers. Notably, Hudson National did not track or otherwise document the bag fees. 

Following the decision, all claims in this case filed within the statute of limitations will proceed to discovery. 

At first glance, the Hudson National case may seem unique and insignificant. However, with the increase in wage and hour suits and onerous Department of Labor guidance, it further shows that employers in all industries need to audit their wage and hour practices as the types of wage and hour lawsuits continue to expand.