In the more desirable seats at Yankee Stadium, an already pricey $10.50 draft beer will run you an eye-popping $12.60 thanks to an involuntary 20 percent "service fee" tacked on to the original price. If the sticker shock doesn’t make that brew bitter enough, consider this: Despite what you might expect, that extra $2 and change isn't going to the hustling server who sold it to you, according to a new lawsuit.
Legends Hospitality, the concessionaire co-owned by the New York Yankees, the Dallas Cowboys, and Goldman Sachs, allegedly pockets the 20 percent service fee attached to food and drink in violation of New York law, according to a class-action lawsuit filed against the company by three Yankee Stadium servers this week. If certified as class action, the suit could involve more than a hundred servers and hundreds of thousands of dollars in claims.
At the center of the dispute is how hot dogs, sodas and other ballpark fare are served in the stadium's field-level seats, which typically cost between $100 and $350 a game. At field level, fans don't have to fetch their food and drink; they instead can place orders with servers carrying credit-card machines and get the orders ferried to their seats by food-and-drink runners.
Under this arrangement, the servers act a lot like salespeople. "They schmooze the customers, and they're trained to upsell, just like any other waitress," says the plaintiffs' lawyer, Brian Schaffer. "If somebody says, 'I want a hot dog,' they say, 'But wouldn’t you like a cold beer with that?'"
According to the suit, the menus field-level spectators find in their cupholders include this disclaimer: "A 20% service charge will be added to the listed prices. Additional gratuity is at your discretion." That phrase "additional gratuity" would seem to imply that the 20 percent is, in fact, a gratuity, but Schaffer says his clients don’t get that money. Instead, they receive a far more modest commission, between four and six percent, of their total sales for the game.
Schaffer believes the system cheats both vendors and fans -- the vendors by withholding their tips, the fans by artificially inflating prices. "It's pretty unbelievable if you think about what's going on," Schaffer said. "Honestly, I couldn't fathom the profits."
What's worse, Schaffer alleges, is the fact that the servers aren't allowed to explain to fans how the actual arrangement works. "If my clients are specifically asked, 'Where does this 20 percent go?' they can't tell them the truth. They can only tell the customer, 'Additional gratuity is at your discretion.' They can't say, 'It's not going to me.' They can be fired for saying that."
Calls to the Yankees press office and to the union that represents stadium workers were not returned.
Schaffer says his clients are paid a $35 flat fee per shift, plus their commissions, and work every Yankee home game. It adds up to between $14,000 and $20,000 apiece on the year, but the commitment makes it tough to have another job during the baseball season. One of the servers named in the suit, Evelyn Ryan, has been selling food and drink to Yankees fans since 1999, working in both the old Yankee Stadium and the new one.
Legends Management has exclusive rights to selling food at both Yankees and Cowboys stadiums. The Yankees are the most valuable team in baseball, with an estimated value of $1.5 billion, and the Cowboys are the most valuable team in football, with an estimated value of $1.65 billion, according to Forbes. Upon the formation of Legends in 2008, the company's CEO said their goal was to "create a new paradigm in sports concessions that will deliver unparalleled and affordable stadium experiences for fans."
In their suit, the servers may have labor and case law on their side. A New York law says that no employer can "retain any part of a gratuity or of any charge purported to be a gratuity for an employee," and a 2008 appeals court ruling involving World Yacht found that the dining cruise company had illegally withheld tips from servers under a similar "service fee" arrangement.