MGM to pay Borgata and National Harbor casino dealers $12.5M over tips disputes

MGM Resorts has inked a $12.5 million wage deal with casino workers in New Jersey and Maryland, resolving two related suits brought by table games dealers at Borgata Hotel and Casino in Atlantic City (New Jersey), and MGM National Harbor Casino and Hotel in Oxon Hill (Maryland).

Plaintiffs Maria D. Maldonado and Laura A. Day, who earned sub-minimum wage plus tips, had challenged the company’s ability to claim a tip credit due to a purported failure to provide notice required by the Fair Labor Standards Act, reports Law 360. The FLSA only allows employers to claim the tip credit if they explain the law to employees and notify them of their use of the credit.

The agreement states MGM would pay $12.5 million to resolve the claims of about 2,600 minimum wage dealers at both venues. The plaintiffs filed a motion for preliminary approval of the deal in New Jersey federal court on Friday, November 12. The amount the casino giant is set to pay represents more than 64% of the tip credit damages alleged, according to the motion.

"These are meaningful payments," Maldonado and Day said, further reported the previously cited news source. The plaintiffs added that the parties also agreed to consolidate both cases. Table game dealers at Borgata will come away with an average payout of $1,000 each, and dealers at National Harbor will get an average of $4,500 each, per the filing.

About one-third of the fund -just under $4.2 million- will be set aside for the workers’ attorneys, while Maldonado and Day will each get $7,500 service awards. "This is an outstanding result for class members," Maldonado and Day said.

Moreover, staff from the Borgata and MGM National Harbor won’t need to claim their dues: unless they request to be excluded, workers will automatically receive a check for their share of the settlement fund. In exchange, the workers have agreed to “an appropriately narrow release of claims tailored to the facts asserted in the operative complaint.”

Maldonado first launched the first suit in May 2020, while Day filed her suit in early 2021, according to the motion. The newly announced deal was reached after “significant” investigation, discovery and litigation, as well as mediation, according to the plaintiffs.

The workers are represented by attorneys with Winebrake & Santillo LLC, Stueve Siegel Hanson LLP and McClelland Law Firm PC; while MGM is represented by Russell L. Liechtenstein of Cooper Levenson PA.

Earlier this year, Wynn Resorts faced a similar case and agreed to a $5.6 million settlement to about 1,000 table game dealers that claimed the company violated labor laws by forcing them to share their tips with supervisors or managers.

Most of the staff got less than $4,170 apiece from the settlement. The tip sharing policy was put in place over concerns dealers were earning more than supervisors: they had to share about 12% of their tips.