For years, Chinatown restaurants have enforced an unwritten
rule: Waiters and busboys share tips with black jackets - managers who stand around
watching over tables.
Now, a federal judge has declared that to be "a custom that is illegal."
Manhattan Federal Judge Alvin Hellerstein ruled Friday that black jackets at one
Chinatown banquet room, the New Silver Palace, must repay years of ill-gotten gains to 17
waiters suing them in court.
Hellerstein also ruled that four New Silver Palace black jackets - part owners - are
personally liable to pay damages. After it was sued, New Silver Palace filed for
The judge's ruling will likely send a tremor through Chinatown's food industry, where
restaurant businesses often file for bankruptcy to escape wage claims.
"This decision should send a clear warning to the restaurants in Chinatown,"
said Ken Kimerling, the attorney for the waiters suing New Silver Palace.
While the judge left undecided how much New Silver Palace waiters are owed, Kimerling
believes he can prove $380,000 plus 9% interest since 1997. That includes tips plus wages
that fell short of the minimum wage.
Kimerling also is seeking other damages and alleges extortion and racketeering that
could more than triple the total owed.
New Silver Palace, just south of Canal St. at the entrance to the Manhattan Bridge,
offers one of Chinatown's biggest dining rooms and attracts hundreds of customers for
Sunday dim sum and Monday night weddings.
Like many restaurants, it pays waiters less than the $5.15-an-hour minimum wage, making
up the difference by letting the help share ample tips.
That's legal, the judge said, but only if waiters and busboys get to keep all the tips.
Both federal and state law prohibit managers from ever taking a cut, which ranged from an
estimated 15% to 25% at New Silver Palace.
Steven Goldman, attorney for the restaurant, brushed aside the judge's ruling as a
"This is worth $80,000 to them, maybe $90,000 tops," Goldman said.
"They're going to have to prove their claims at trial. They're a long way from
collecting a nickel."
Nevertheless, several New Silver Palace workers were heartened yesterday by
"They steal our tips," said Cheang Liang, 58, a waiter, who said he hasn't
been paid in two months.
Liang said his wages were about $120 for six days of work. His share of tips was $300
to $400 a week. Without the cut taken by black jackets, he said, he could have received
some $500 a week in tips.