A federal judge in the Middle District of Tennessee recently held that bouncers (sometimes referred to as “security guards”) at Coyote Ugly Saloons were properly permitted to participate in tip pools with bartenders, barbacks, and waitresses. The holding in Stewart v. CUS Nashville, LLC turns on the Coyote Ugly bouncers’ unique job duties, which require them to have significant customer interactions that differ from the duties of most bouncers in restaurant and retail settings.

The Fair Labor Standards Act permits tip pooling among employees who “customarily and regularly receive tips.” One of the central issues in Stewart was whether Coyote Ugly’s bouncers qualified to participate in a tip pool. The bouncers were typically paid $9 to $10 an hour, generally received 5 percent of the bartender tip pool, and were required to share 5 percent of their pool of tips with the bartenders.

In Stewart, the court applied the customer interaction test set forth in the 1998 Sixth Circuit Court of Appeals case, Kilgore v. Outback Steakhouse of Florida, Inc. The customer interaction test focuses on the level of customer interaction employees have and whether they perform “important customer service functions,” such as greeting customers, supplying them with menus, seating them at tables and, at times, enhancing the customer experience.

Applying this test to Coyote Ugly’s bouncers, the court held that there was “ample evidence in the record to demonstrate that security guards employed at company-owned Coyote Ugly saloons sufficiently interact with customers so as to constitute employees who ‘customarily and regularly receive tips’ under Kilgore.” The court recognized that the primary duty of the bouncers is to protect Coyotes (female bartenders) and customers and enhance the customer experience by performing other expected duties. For instance:

• Bouncers stationed at the saloon entrance “bark” to encourage people to come inside and inform customers of drink specials and that Coyotes or patrons are dancing on the bar.
• Bouncers are encouraged and expected to be funny, engaging, and charismatic and make customers feel welcome upon entering the saloon.
• Bouncers dance with customers, participate in games, and recruit customers to participate. They encourage the purchase of body shots, flirt, take pictures with female customers, urge female customers to dance on the bar, and assist them and the Coyotes in getting onto and off of the bar;
• Bouncers have their own “regulars” who come to visit them and from whom they receive tips.
• Bouncers wear shirts with the letters, “BMF,” on the back, which customers often ask to purchase.

In essence, the court determined that the bouncers are part of the Coyote Ugly customer experience and perform many non-traditional security functions. Employers should be careful in applying the holding in Stewart to bouncers performing more traditional security-related duties. If they are not part of the show, they should not be included in a tip pool.