When nine staff members at Capitol Hill’s Barrio walked out during a shift on July 7 in protest of the restaurant’s tipping structure, they handed a letter to the general manager and expressed their regrets.
“It is not our wish to harm the business, but, in light of an increasingly untenable situation and despite having voiced our concerns to numerous managers on multiple occasions, we feel we are left with no other option,” the staffers wrote, adding that they intended to return to work the next day; they just didn’t know how else to get management to take seriously their protest about the restaurant’s tipping structure.
Though participants asserted they’d be back to work the next day, Heavy Restaurant Group, which runs Barrio, fired all nine within three hours of the walkout.
“It was a challenging decision, but it was a collective decision from myself and management. We just felt it was very disrespectful to the team and their co-workers. It put them in a vulnerable position,” said Larry Kurofsky, HRG founder and CEO.
For months, the employees say, they’d tried to talk to HRG (whose restaurants include Meet the Moon, Pablo y Pablo, Fiasco and Purple) about the restaurant’s tip-pooling system — namely, how tips are disbursed among eligible employees at the end of a shift.
The practice of tip pooling isn’t uncommon in the Seattle restaurant world, and restaurants that have moved from traditional tipping to the tip-pool system say the latter is more equitable because it distributes tips more evenly among front-of-house staff (such as servers, hosts, bussers and bartenders) and back-of-house personnel (cooks and dishwashers). But aside from a few state Labor and Industries stipulations about who can or can’t share in a restaurant’s tips, few rules govern tipping, and each restaurant has discretion to decide how to disburse the tip pool.
The dispute between HRG and its former employees spotlights the lightly regulated subject of how restaurants should most fairly compensate employees who frequently work for minimum wage and count on tips from patrons to supplement their income.
The Barrio staffers who walked out say they weren’t against sharing tips with the back-of-house staff, they just wanted more transparency about how the tip pool functioned. The problem, they say, is that it operated under overly opaque terms, and their repeated requests for documentation or detailed accounting of how management was splitting tips were almost entirely ignored.
Over a period of months, these staffers independently concluded that the tip money they were taking home didn’t align with the tips they knew patrons were leaving, especially in light of the restaurant’s sales figures.
“A lot of what servers were upset about was seeing the amount they rang up and see it go into a pool and get so little of it,” said former Barrio bar manager Madeline Crawford, one of the nine employees who walked out. Their requests for explanation and detailed accounting from management were mostly ignored, they say.
While this is the first time HRG employees have walked out on the job, it’s not the first time the group has dealt with wage disputes. In spring 2021, HRG paid $155,000 to settle a lawsuit brought against it by a group of employees from Meet the Moon and Pablo y Pablo who alleged that HRG had failed to properly distribute service charges it had collected to employees working there at the time, and that HRG had failed to provide adequate rest breaks.
Some restaurants include service charges as part of the bill. These charges can be used at the restaurant’s discretion to supplement employee-related costs like benefits and wages, but differ from tips in that tips have to be entirely distributed to specific groups of employees.
As part of the settlement, HRG denied any wrongdoing.
“We implemented a 20% service charge in 2018, along with many restaurants in Seattle. After discussions with our attorney, we were told the service-charge disclosure language on our menus and guest checks were correct. We later found out the menu language needed to be updated,” Kurofsky said. “Many restaurants did not have the correct language and have updated their disclosures as there was increased clarity. We always had full transparency as well as clear and consistent communication to our employees about the details of the service-charge allocation.”
The nine employees involved in the Barrio walkout say they are in the process of filing complaints with the National Labor Relations Board, the Seattle Office of Labor Standards and Washington State Labor and Industries.
Kurofsky said tips at Barrio were shared between front-of-house staff and back-of-house staff in an 80/20 split in which servers, bartenders and their support staff retained 80% of tips minus credit-card processing fees, and that this structure has been in place since December 2021.
Kurofsky says employees are informed of the split upon their hire, and are shown a weekly breakdown of the amount of tips disbursed through an internal communication technology. He called the process “100% transparent,” and said that he sees Barrio’s tip-pool model as a way to tackle pay inequity in the restaurant industry.
“I have this specific vision,” Kurofsky said, explaining that he believes the highest-paid employee in a restaurant should never make more than 2.5 times the lowest-paid employee, and that in many restaurants, the highest-paid employee is sometimes making five times what the lowest-paid employee does.
The employees who walked out see it differently. They say they never got a detailed explanation or detailed accounting of how and why they were paid the tips they got. “Larry is less interested in paying his employees and instead thinks that we should be paying each other,” said former bartender Randall Jefferson.
In their letter to HRG, the employees who walked out called for the end of the tip-pooling system by August 1, and asked that servers be allowed to keep their own tips at the end of service nightly and individually tip out support staff at standard industry rates. They also asked for the process to be well-documented. They’re not trying to take money out of the pockets of support staff, they say.
“Our idea was if we were to abolish the tip-pool system, we would hope that Heavy Restaurant Group would still adequately pay our back-of-house employees. We don’t need to be paying them with our tips. Yes, I believe they deserve tips, but it’s more about a lack of transparency and lack of control. We want to be part of the conversation,” Crawford said.
Kurofsky said that if HRG approved the walkout employees’ demands, it would’ve been at the expense of other employees and in direct opposition to his pay-equity beliefs. Furthermore, Kurofsky said, changes were already in the works.
“They were growing impatient, they took an extreme approach,” Kurofsky said, adding that if the group of nine had waited, HRG management has been working on another pay-tier structure that would have put the expense of compensating support staff on the company without negatively impacting the rest of the staff. Kurofsky said HRG plans to implement this new compensation plan in the next week.
It’s a move Crawford calls a “slap in the face.”
“We can’t afford to be this patient. We need to find other jobs so we can pay our rent and feed ourselves,” she says.
