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This Article examines the ubiquitous, multibillion dollar practice of tipping as a vehicle for race and gender discrimination by both customers and servers and as a case study of the role that organizations play in producing and promoting unequal treatment. The unique structure of tipped service encounters provides plenty of opportunities and incentives for the two parties to discriminate against one another. Neither customers nor servers are likely to find legal redress for the kinds of discrimination that are most likely to occur in tipped service transactions, however, because many of the same features of the transaction that promote discrimination also stand in the way of legal accountability for the discrimination that results.

Moreover, while tipped service transactions directly involve just the customer and server, they take place within an organizational framework that is created by a third party in their relationship, the firm that sells to the customer and employs the server. That framework often facilitates discriminatory bias in the decisions of customers and servers and encourages the firm to make decisions that reinforce the discriminatory dynamics of the service encounter. Yet, the “triangular” structure of the relationship among firm, customer, and server both obscures the firm’s role in producing discriminatory outcomes and protects the firm against liability to either of the other parties. Close examination of discrimination in tipped service encounters reveals the importance of an understanding of discrimination that lessens the focus on individual decision making and supports recent calls for a newer, structural approach to antidiscrimination law.