By Denise Lavoie
Associated Press
Friday, May 2, 2008

BOSTON, May 1 -- American Airlines said Thursday that it would no longer allow skycaps to accept tips from passengers at Logan International Airport, after a jury's award of $325,000 to nine skycaps who said the airline's $2-per-bag curbside check-in fee deeply cut into their tips and violated Massachusetts's tips law.

American said in a statement that it banned tipping in light of the verdict, as well as a new amendment to state wage and hour laws that will make triple damages automatic for companies that do not pay full wages or overtime. The policy does not apply to skycaps at other airports.

The airline also said it would ask U.S. District Judge William Young to throw out the jury's April 7 verdict.

G2 Services, the company American contracts with to provide curbside check-in, will raise the hourly wages of skycaps to $12 to $15, which is well above the state's $8-per-hour minimum wage. Most skycaps now earn $5.15 per hour and say they have traditionally made most of their money through tips.

Shannon Liss-Riordan, a lawyer for the skycaps, called the no-tips policy "retaliatory" and said she would seek a court injunction to stop it.

"Tipping is a universal practice among passengers, and this is how skycaps have earned their livings for decades," she said. "Clearly, American's decision to try to stop people from tipping skycaps is in retaliation against these skycaps who asserted their rights under the state tipping law."

Tim Wagner, a spokesman for American, said airline officials decided to prohibit tips to ensure that the company did not violate the state's tips and wage laws. He said the policy was "in no way" a retaliatory move against the Boston skycaps.

"We have to ensure we're in full compliance because we can't put ourselves at even more risk," he said.

Massachusetts has a tips law that is considered one of the most protective in the country. It says any tips, gratuities and service charges must be paid in full to the employees who provide the service. It applies regardless of whether an employee makes less than minimum wage.

During the trial in U.S. District Court, skycaps testified that many passengers were confused and thought the $2 was going to them as a tip, while others saw the fee as a forced tip and therefore weren't willing to give a gratuity on top of that. The fee is split between American Airlines and G2 Services.

American said it posted signs at several locations on the curb informing passengers that they now had to pay $2 per bag, not including gratuities.