The Tipping Point

On a good night at Charlie Trotter’s, where dinner for two can set you back $400 or more, former waiter Kurt Sorensen easily racked up $1,000 in tips. So did each of the other precision-trained, dark-suited waiters working the celebrated restaurant’s four dining rooms. In a month, its famously pampered patrons might have left total tips of more than $100,000, all of which would be turned over to management. Waiters were paid a base wage of $3.09 an hour and got some of their tips back on a biweekly paycheck; Trotter guaranteed them $40,000 to about $80,000 annually–plus benefits. Sorensen, who’d been there for six years, made $65,000. It was clear, even to the English majors among them (Sorensen, in his previous life, had been a safety consultant for an engineering firm), that there was a considerable gap between what waiters were collecting and what they were paid.

“We realized it was unusual. In my heart of hearts I thought ‘this is not quite right,'” Sorensen says. “But it was an environment where you don’t question. Most of us just went ‘That’s the way it is’ and turned [the tips] in.” Now a lawsuit filed by Sorensen and four other former employees–Paul Larson, Sarah Brown, John Winterman, and Belinda Chang–alleges that Trotter’s regularly shortchanged waitstaff on hourly pay and overtime and illegally kept millions of dollars in tips. Federal fair labor standards, says their lawyer, Douglas Werman, mandate that employers who pay less than the minimum hourly wage aren’t allowed to keep any of their servers’ tips. According to the suit, only 15 to 50 percent of the money patrons left for the vaunted service they got came back to their servers.

Sorensen was fired from Trotter’s in January (no reason given, he says, and Trotter’s management won’t comment), but before that he had been a valued member of the business. In Edmund Lawler’s hilariously appreciative book Lessons in Service From Charlie Trotter (2001)–where the food appears as “tiny jewels” and the mantra is “How would Charlie do it?”–Sorensen is repeatedly cited as someone well versed in the Trotter philosophy. “Ultimately, service is a hallmark of civilization,” Lawler quotes him as saying. The book also describes Trotter’s innovative compensation system as “a departure from industry practice”: servers at Trotter’s “aren’t working their tables for tips. They’re working for a regular paycheck.” According to Lawler, as a young waiter Trotter thought taking home a “dirty wad of cash each night was one of the grubbier aspects of the job.” He writes that the system has “more than paid for itself,” while delivering Trotter’s waitstaff from living a dicey “hand-to-mouth” existence on those thousand-dollar-a-night tips. In addition, it “reduces the risk that tax authorities will audit the server.” And what did it do for Trotter? According to an example cited by Werman, in a two-week period in December 2001, the waitstaff collected $58,294 in tips and was paid $11,850. The lawsuit also claims the biweekly pay schedule allowed Trotter’s to average hours so that an employee working 60 hours one week and 20 hours the next would not be paid overtime.

“I think this is a more refined way to compensate the staff,” says Trotter in Lessons. Lawler notes that since the guaranteed income is derived from the pooled tips, “the potential flaw in the system is that there might be a deficit in the tips, although that has yet to happen.” On the other hand, he writes, a substantial surplus in the pool would be paid out to the servers as a bonus. Werman says that, according to court documents, that’s never happened. The complaint alleges that Trotter’s used the tip money to pay other employees such as managers and office staff, which it argues is forbidden by federal law. Sorensen says Trotter’s changed its compensation plan last fall and also began adding an 18 percent service charge to bills. “When they changed it I started wondering, were they doing it wrong before? They didn’t address that. This is nothing against the Trotter organization. It’s really just about following the laws and getting paid what we were supposed to get paid.” Werman is attempting to get the case certified as a class-action lawsuit, which would include 24 to 30 people who worked at Trotter’s during the four-and-a-half-year period it covers (from 1998 to 2002).

In a statement as concise as a Trotter course, attorney Anthony Madonia says Trotter’s “denies the allegations” and “has no further comment.”

Poetry’s Missing Millions

The Poetry Foundation is also headed to court. Remember the $100 million gift that prescription drug heiress Ruth Lilly bestowed on the esteemed but impoverished publisher of Poetry magazine? It’s now worth about $64 million, and Poetry, which has had the troublesome task of reinventing itself as a foundation since it went from rags to riches, is joining two other nonprofit groups, Americans for the Arts and the Lilly Endowment, in asking the National City Bank of Indiana for restitution.

When the trusts were established in January 2002, they were funded with nearly four million shares of Eli Lilly and Company stock. But, as everyone knows, it’s a bad idea to keep your assets in one basket, especially, say, when patents are running out. The beneficiaries claim the bank, as trustee, was supposed to dump the Lilly stock and diversify, pronto. According to the legal documents, the bank indicated that it would. (National City did not return calls.) But no Lilly stock was sold in January or February, and the bank continued to sit on most of it through the spring and summer while it took a sickening dive. In September and October, with the price down to about $48 (from about $75 nine months earlier), every bit was sold. The trusts, worth a total of $286 million in January, had shrunk to $183 million. In November 2002 the bank took the unusual step of asking the Indiana court to “exonerate” its actions, and Americans for the Arts (based in D.C.) filed a counterclaim and spurred the other beneficiaries to join it. The bank has moved to dismiss the suit; Poetry has until August 1 to respond.

And Speaking of Poets . . .

The Illinois Arts Council has a not-yet-public list of just 26 candidates for state poet laureate. Nominations, limited to published poets who’ve been Illinois residents for at least ten years, were accepted between June 6 and July 11 from anyone who cared to make one. After vetting by the council, the list goes to a review committee headed by (didn’t they pay attention when Hillary did health care?) first lady Patti Blagojevich. The committee whispers in the governor’s ear and an appointment’s expected in the fall. If Lisel Mueller won’t bite, the buzz favors Li-Young Lee.

Art accompanying story in printed newspaper (not available in this archive): photo/Robert Drea.