The Supreme Court refused yesterday to review a 4th U.S. Circuit Court of Appeals decision that the Marriott Corp. illegally deducted tips from federal minumim wages it paid to waiters and waitressess at its Joshua Tree restaurant in McLean.
The appellate court, in its Feb. 9 decision, had ordered the company to reimburse the restaurant employees double the minumim wages they had earned. The restaurant's management had been collecting the equivalent of the minimum wage from employees' tips and paying employee salaries out of that amount, minus witholding taxes.
The practise, known as the "tip-back" or "tip-credit", violated the May, 1974, Fair Labor Standards Act that limited the amount of tips management could collect from employees to pay their salaries to one-half the hourly minimum wage, which is now $2.30.
A Marriott spokesman said the firm discountinued the "tip-back" practice almost two-years ago at all their operations. It was not immediately known how many Marriott workers would receive the back pay on the amount.
In a similar decision, U.S. District Court judge Albert V. Bryan Jr. in Alexandria ruled in November, 1976, that Emersons Ltd. must repay about 700 employees between $148,000 and $149,000 in back wages, according to Ralph Emerson, chairman of the board and executive vice president of the company.
Emerson said that before Bryan's ruling he ordered the "tip-back" system halted at the 11 Maryland and Virginia restaurants operating under the policy.
"I went crazy when I found out we did it and it stopped right there. I find it to be truly repugnant, indecent and horrible," Emerson said.
Emerson said the company had not yet paid the $148,000 to $149,000 because it was appealing the decision "on other grounds." He said he did not know on what grounds it is being appealed.
The "tip-back" system is not common practice in the restaurant industry, according to robert Neville, Washington counsel for the National Restaurant Association, which represents about 5,000 corporate members nationwide.
"To my knowledge there were only two companies in the country that followed that practise." Marriott and Emersons, he said.
Neville said the restaurant association declined to file a legal brief in support of Marriott's position because "it was not a wise position for the industry to take, and it does not take that position.