1Oak Lawsuit Threatens to Change the Bottle Service Industry

“If you want to make enemies, try to change something.” -Woodrow Wilson This quote has proven to be true with both our current leader Barack Obama and cocktail waitress/model Tarale Wulff. A lawsuit filed in Manhattan federal court against 1Oak will create a ripple effect in clubland and possibly redefine the bottle era. Tips and how they are distributed are at the core of the case and just about everyone who sells booze by the bottle will be effected. I have had conversations with the 1Oak crew, as well as Tarale’s lawyer, and it is clear as mud what will happen next.

When a patron buys a bottle of vodka at a hotspot, there is an automatic 20-percent gratuity attached. This 20 percent usually goes into a pool that the waitress crew divide up, but not before chunks of money are extracted. Various support members (including busboys, bartenders and hosts) take money from this tip pool. Every club I know operates in this manner. Tarale Wulff’s attorney, Brian Schaffer, told me “everybody can be wrong.” These people, according to Mr. Schaffer, are entitled to their fair share, but he believes the law is clear that a maître’ d, sommelier and assistant manager or door person is not allowed to partake in the tip pool. In this case the objection is that 1Oak doorman Binn Jakupi has shared in the tip pool as a policy of the club. Binn won’t be alone in this case, as doorman throughout the city are often included within these same policies. This case will define roles in the new bottle service era. Like many regulations, the laws about hospitality service may become obsolete as times change. A court will decide whether the unique role of the doorperson entitles him to a part of the gratuity. This case will determine whether or not the bottle service industry will look like a very different playing field than the one we see with the current active policies. Schaffer points out that class-action lawsuits such as this against Nobu and Sparks Steakhouse have resulted in multi-million dollar wins for the service employees.

This particular lawsuit will be looked at on a case-by-case basis. One of the basic points that supports Tarale’s case is whether the customer believes the tip is going to the waitress, or believes the tip is to be shared by others including the doorman. Mr. Schaffer points to studies that say it’s possible that up to 75% of restaurants in this town are in violation of some kind of labor law.

I believe that the doorman is an integral part of the bottle service process. When a random customer shows up at a joint, he and his crew are told they must buy a table. Doormen and promoters are most often the actual salespeople when it comes to bottles. They bring the majority of big spenders to the club, and the booze is just part of what the clients get for their loot.

The heavy lifting, in my opinion, is done at the door when the doorperson sells the table. When an agreement to buy is reached, a hostess takes the credit card and ID directly from the doorperson, who has already secured it during their transaction prior to the patron’s entry. The hostess escorts the patron to the maitre’d stand, where a table is assigned. Usually a disclaimer protecting the club from charge-backs is signed. She then delivers the patron to the waitress with the deal and credit card/ID. The waitress, in most cases, is merely a model dropping the bottles and running the credit check. She will flirt, smile and ask if they need anything else while support staff deliver OJ, cranberry juice, glassware, stirrers and the basic setup to the table. Her primary function from this point on is to try to sell additional bottles to the patron, or up-sell them from an expensive bottle of vodka to a really expensive bottle of vodka. At most clubs, waitresses are required to bring in their own tables. According to my inside sources, 1Oak does not require their staff to do so.

To me, the job of the bartender who releases and tracks the bottle from inventory and the waitress are the least important part of the process (except for the flirt and smile part). 1Oak says they have regular staff meetings where staff is encouraged to discuss changes to the system. Tarale’s lawyer rebuts that assertion, saying the staff rarely speaks up because they feel they will be viewed as troublemakers and fired for their complaints. He points out that waitresses in places like 1Oak and other high-end establishments can make anywhere from $75,000 to a $125,000 a year. The 1Oak staffer I spoke with, my inside source, says that she is “part of a team” and that “Binn is the quarterback of that team.”

Tarale Wulff was terminated by 1Oak a week before the lawsuit was filed. It is alleged that “she broke protocol” when she ran a customer’s credit card which was declined and also accepted his I.D., which was expired. This customer rang up $17,000 worth of booze and was allowed to leave without management getting involvement. She claims a manager was informed. Her boyfriend is still employed by the club, and she came by Thursday before the lawsuit was filed to pick him up. A 1Oak source told me she has “maintained her job at Cipriani’s and is texting customers she met while employed at 1Oak to go there instead.”

Schaffer says his client is not vindictive. He told me she is doing this to make things right for everyone. Since this is a class action suit, she figures she will not be making that much money, and employees that have been there longer than her will be the ones to benefit. He says they are in clear violation of New York law, and Tarale is doing this for all the right reasons. I pointed out to him that I can’t imagine another club feeling comfortable hiring a litigious employee, but then she does still work at Cipriani.

The papers I read said that the class action suit would include about 50 other employees. I asked whether he had lined up all of the people involved in this suit. He admitted that as the suit progressed, more people would get on board, but at this time they had one other person ready to join. I’m sure that attorneys all over town are being asked to weigh in as individual clubs are facing a crisis. Management meetings will be held in haste and policies reviewed. It all seems sad, as bottle service has been the golden egg-laying goose for so many.

I think that things will change drastically. At its core, bottle service is not about the booze but about the real estate — the entry to the hot spot and proximity to the action. I believe the clubs will find a way to rent the table — the real estate — for a fee that is not linked to the actual bottle. A tip or incentive wage for the doorman and maybe even promoters will become a common fee. The bottles will be separately billed, with tips divided amongst the service crew. This or something similar this will occur whether Tarale Wulff’s lawsuit is won months or years from now.

I must point out for everyone who reads this article and column that I wear two hats. I write here for BlackBook and I am also a principal of Lewis and Dizon, a hospitality design firm currently designing a space for the principals of 1Oak and 10 other places where owners will be similarly affected by this suit. I also know and am friends with a lot of waitresses. I believe I have reported this story without prejudice but am open to any and all analysis of that statement.

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