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If you tipped your budtenders with a little extra dough during your last trip to a Nirvana dispensary, they may not have actually gotten it, according to a recently filed federal class-action lawsuit.
On Jan. 22, three budtenders who worked for Nirvana in three states — Arizona, Michigan and Illinois — sued the Arizona-based cannabis company for its alleged failure to pay employees fair wages and for often pocketing their tips. The three budtenders, who hope to represent all Nirvana budtenders with their lawsuit, are seeking back pay and other monetary damages for the company’s alleged violation of the Fair Labor Standards Act.
Nirvana Cannabis’s corporate office is located in Tempe, and the company has seven locations in Arizona, including in Phoenix, Tucson and Prescott Valley. The company also has locations in Michigan, Illinois, Maryland and Ohio. According to the suit, Nirvana has roughly 140 budtender employees in Arizona.
“Nirvana Cannabis systematically and unlawfully withholds tips from Budtenders,” wrote Sarah Block, the plaintiff’s attorney, in a statement to Phoenix New Times. “Tips are the property of the employees, but the company unlawfully retains these tips by including the Budtenders’ supervisors and managers in the tip pool and by wrongfully permitting managers to utilize tips to cover business expenses or to make up for cash register shortages.”
Nirvana Cannabis did not immediately respond to a request to comment.
Block is also litigating a similar lawsuit against Story Cannabis. That suit was brought in October by three former Story Cannabis budtenders, including one in Arizona, who alleged tip theft. Story Cannabis has denied the allegations in court filings. In her statement to New Times, Block claimed that “illegal tip pooling and tip theft is commonplace in the cannabis industry.”
One of the plaintiffs in the Nirvana suit, Vanessa Mason, was employed at the Nirvana dispensary near Seventh Street and Buckeye Road. The complaint says she worked as a budtender there for nearly two years, earning $17.75 per hour — roughly two dollars more than the current state minimum wage.
Per the suit, Nirvana budtenders typically earn more than $30 a month in tips, which are usually collected in a jar by the register. Under a company-wide policy, Nirvana stores use a mandatory “tip pool system” to distribute tips among budtenders, supervisors, inventory associates, inventory managers and, on occasion, the assistant general managers. The lawsuit notes that many of these employees do not interact with customers.
Tips are apportioned according to the number of hours each employee worked that day and then paid out to employees on a weekly basis, the suit says. This allegedly resulted in non-public-facing employees — such as supervisors, inventory managers and store managers — receiving a larger amount of tip money than budtenders did, despite having little direct interaction with customers. The lawsuit also claims that tips are sometimes used to cover “business related expenses,” including making up for register shortages, purchasing holiday decorations and funding staff events and meals.
“These tips were owed to Plaintiffs and similarly situated employees but were unlawfully retained by the business,” the lawsuit alleges.
Nirvana has not yet responded to the suit in court.
