Mohammad Jahir v. Ryman Hospitality Properties , 795 F.3d 442 ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1485
PATRICIO DAVID TREJO,
Plaintiff,
MOHAMMAD SAZZAD JAHIR; ANTHONY MINTU GOMES,
Plaintiffs – Appellants,
v.
RYMAN HOSPITALITY PROPERTIES, INC., a Delaware corporation;
MARRIOTT INTERNATIONAL, INC., a Delaware corporation,
Defendants – Appellees.
----------------------------
UNITED STATES OF AMERICA,
Amicus Curiae.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District Judge.
(8:13-cv-02911-RWT)
Argued: May 12, 2015 Decided: July 29, 2015
Before SHEDD, DUNCAN, and HARRIS, Circuit Judges.
Affirmed by published opinion. Judge Shedd wrote the opinion,
in which Judge Duncan joined. Judge Harris wrote a separate
opinion concurring in the judgment.
ARGUED: Charity Chidinma Emeronye Swift, SWIFT & SWIFT,
ATTORNEYS AT LAW, P.L.L.C., Alexandria, Virginia, for
Appellants. Joshua B. Waxman, LITTLER MENDELSON, P.C., Houston,
Texas; Daniel Vincent Johns, BALLARD SPAHR LLP, Philadelphia,
Pennsylvania, for Appellees. ON BRIEF: Stephen Christopher
Swift, SWIFT & SWIFT, ATTORNEYS AT LAW, P.L.L.C., Alexandria,
Virginia, for Appellants. Steven E. Kaplan, Washington, D.C.,
David B. Jordan, LITTLER MENDELSON, P.C., Houston, Texas, for
Appellee Marriott International, Incorporated; Michelle M.
McGeogh, BALLARD SPAHR LLP, Baltimore, Maryland, for Appellee
Ryman Hospitality Properties, Inc. Rod J. Rosenstein, United
States Attorney, Baltimore, Maryland, Joyce R. Branda, Acting
Assistant Attorney General, Michael Jay Singer, John S. Koppel,
Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Amicus United States of America.
2
SHEDD, Circuit Judge:
Mohammad Sazzad and Anthony Gomes (the Plaintiffs) 1 brought
this action against their employers, Ryman Hospitality
Properties Inc., and Marriott International, Inc. (the
Defendants), alleging violations of the tip-credit provision of
the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(m), their
collective bargaining agreement, and Maryland’s Wage Payment and
Collection Law. For the following reasons, we affirm the
district court’s dismissal of the complaint.
I.
The Plaintiffs work as servers for hotels and restaurants
at the National Harbor complex in Prince George’s County,
Maryland. 2 The properties were previously owned by Ryman but are
currently owned and operated by Marriott. The Plaintiffs are
also members of the UNITE HERE, Local 25 union. Although the
servers have not voluntarily agreed to a tip-pooling
arrangement, the Plaintiffs allege that the Defendants take a
1A third plaintiff, Patricio Trejo, did not file an
appearance on appeal and was dismissed pursuant to Local Rule 45
for failure to prosecute.
2The facts are taken from the Plaintiffs’ complaint.
Because we are reviewing the district court’s grant of a Rule
12(b)(6) motion to dismiss, we accept the allegations in the
complaint as true and construe them in the light most favorable
to the Plaintiffs. See Coleman v. Maryland Court of Appeals, 626
F.3d 187, 189 (4th Cir. 2010).
3
portion of their tips—roughly 4% of the total daily food and
drink sales—and redistribute those tips to bartenders, server
assistants, busboys, and food runners. (J.A. 11-12). Sazzad
eventually asked a union official if the tip-pooling arrangement
was legal and was told that it was not.
In response, the Plaintiffs filed suit against the
Defendants, alleging that the tip-pooling arrangement violated
the FLSA, 29 U.S.C. § 203(m), the 2009 Collective Bargaining
Agreement between UNITE HERE and the Defendants, and the
Maryland Wage Payment and Collection Law. Importantly, the
Plaintiffs allege that the Defendants violated the FLSA by “not
paying Plaintiffs all their earned tips,” (J.A. 14), and limit
their requested relief to, inter alia, “the amount of tip wages”
taken by the Defendants (J.A. 16). Thus, the Plaintiffs do not
allege that they were paid below minimum wage; even absent tips,
their base salary was above the minimum wage at all times.
Further, the Plaintiffs do not allege that they were forced to
work overtime without proper pay.
The district court, following a hearing, granted the
Defendants’ Rule 12(b)(6) motion to dismiss. As to the FLSA
count, the court held that because the Plaintiffs were paid the
minimum wage, § 203(m) “does not have anything to do with this
case.” (J.A. 131). The court noted that the Plaintiffs “do not
want to” allege a violation of Department of Labor Regulations
4
which extend § 203(m) to employers who are not utilizing the
statute’s tip credit, (J.A. 131), but nonetheless stated that
those regulations “exceeded [the Department of Labor’s]
authority and . . . don’t get past step 1 of the Chevron 3
analysis in terms of deference,” (J.A. 132). The court dismissed
the collective bargaining count for failure to exhaust, and the
Maryland state law count because the Plaintiffs agreed that a
“tip” was not a “wage” under the Maryland statute. The
Plaintiffs timely appealed. 4
II.
The Plaintiffs continue to press their claim that the
Defendants violated the FLSA by requiring them to join the tip-
pooling arrangement. 5 We review the grant of a motion to dismiss
under Rule 12(b)(6) de novo. United States ex rel. Rostholder v.
3 Chevron U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984).
4 The Plaintiffs did not appeal the district court’s
dismissal of the collective bargaining or Maryland state law
claims.
5 After briefing concluded, the Government filed an amicus
brief primarily arguing that the Department of Labor regulations
promulgated under § 203(m), which require that employers comply
with the statutory restrictions on use of employee tips even if
they otherwise are paying minimum wage, are a valid exercise of
the agency’s gap-filling authority. The Plaintiffs have
repeatedly argued that they are pursuing a claim only under the
FLSA and that the regulations are “not an issue” in this case.
(J.A. 100). Accordingly, we have no occasion to opine on the
validity of the regulations in this appeal.
5
Omnicare, Inc., 745 F.3d 694, 700 (4th Cir. 2013). The
Plaintiffs’ argument turns on a question of statutory
interpretation. “When interpreting statutes we start with the
plain language.” U.S. Dep’t of Labor v. N.C. Growers Ass’n, 377
F.3d 345, 350 (4th Cir. 2004). “It is well established that when
the statute’s language is plain, the sole function of the
courts-at least where the disposition required by the text is
not absurd-is to enforce it according to its terms.” Lamie v.
U.S. Tr., 540 U.S. 526, 534 (2004) (internal quotation marks
omitted). In determining the plain meaning of the text, we must
consider the “broader context of the statute” as a whole,
Santoro v. Accenture Fed. Servs., LLC, 748 F.3d 217, 223 (4th
Cir. 2014), in light of the “cardinal rule,” that “the meaning
of statutory language, plain or not, depends on context.” King
v. St. Vincent’s Hosp., 502 U.S. 215, 221 (1991) (citations
omitted).
The FLSA is best understood as the “minimum wage/maximum
hour law.” Monahan v. County of Chesterfield, 95 F.3d 1263, 1266
(4th Cir. 1996) (internal quotation marks omitted). In enacting
the FLSA, Congress intended “to protect all covered workers from
substandard wages and oppressive working hours.” Barrentine v.
Arkansas–Best Freight Sys., Inc., 450 U.S. 728, 739 (1981).
“‘The substantive sections of the FLSA, narrowly focusing on
minimum wage rates and maximum working hours, bear out its
6
limited purposes.’” Monahan, 95 F.3d at 1267 (quoting Lyon v.
Whisman, 45 F.3d 758, 764 (3d Cir. 1995)). Thus, the Act
requires payment of a minimum wage, 29 U.S.C. § 206(a), and
limits the maximum working hours an employee may work without
receiving overtime compensation, 29 U.S.C. § 207(a). Section
216(b) provides a cause of action for violations of these two
provisions, permitting employees to seek damages, as relevant
here, in “the amount of their unpaid minimum wages” and (in
appropriate circumstances) an equal amount of liquidated
damages. 29 U.S.C. § 216(b). 6
Here, the Plaintiffs concede that they are paid a full
minimum wage absent tips. See J.A. 100 (“Section 206 talks about
employer’s paying minimum wage. We never mentioned minimum wage
in our complaint . . . because that was not our problem”). Under
direct questioning from the district court, and at oral argument
before us, the Plaintiffs affirmed that they are paid the
minimum wage and that the Defendants do not claim the tip credit
to pay the minimum wage. Accordingly, the Plaintiffs essentially
concede that they do not have a private right of action under §
216(b) because they are not seeking damages for unpaid minimum
wages. See Monahan, 95 F.3d at 1284 (rejecting a pure gap time
6 The Secretary of Labor is empowered to bring an action for
unpaid wages under § 216(b) and an action to restrain violations
of the FLSA, 29 U.S.C. § 217.
7
pay claim under the FLSA because, “[i]f the employee has been
properly paid at or above minimum wage for all nonovertime
hours” there is no FLSA violation).
Instead, however, the Plaintiffs argue that § 203(m),
commonly called the tip credit provision, creates a free-
standing right to bring a claim for lost “tip” wages. Passed in
1974, § 203(m) defines the term “wage” for “tipped employees” as
follows:
In determining the wage an employer is required to pay
a tipped employee, the amount paid such employee by
the employee’s employer shall be an amount equal to--
(1) the cash wage paid such employee which for
purposes of such determination shall be not less than
the cash wage required to be paid such an employee on
August 20, 1996; and (2) an additional amount on
account of the tips received by such employee which
amount is equal to the difference between the wage
specified in paragraph (1) and the wage in effect
under section 206(a)(1) of this title.
The additional amount on account of tips may not
exceed the value of the tips actually received by an
employee.
The preceding 2 sentences shall not apply with respect
to any tipped employee unless such employee has been
informed by the employer of the provisions of this
subsection, and all tips received by such employee
have been retained by the employee, except that this
subsection shall not be construed to prohibit the
pooling of tips among employees who customarily and
regularly receive tips.
29 U.S.C. § 203(m).
In other words, § 203(m) permits an employer, in certain
circumstances, to take a credit against the minimum wage by
using an employees’ tips as “wages.” An employer can thus pay
8
tipped employees (1) a cash wage of $2.13 plus (2) an additional
amount in tips that brings the total wage to the federal minimum
wage. Cumbie v. Woody Woo, Inc., 596 F.3d 577, 580 (9th Cir.
2010). In a situation where the employer uses tips to help meet
the minimum wage requirement for its employees, the employee
must be informed of this fact and the employee must also be
permitted to keep tips, unless the employee is part of a tip
pool with other employees who regularly receive tips. The
provision was “to make clear the original Congressional intent
that an employer could not use the tips of a ‘tipped employee’
to satisfy more than [a certain percentage] of the Act’s
applicable minimum wage.” Richard v. Marriott Corp., 549 F.2d
303, 304 (4th Cir. 1977) (internal quotation marks omitted).
Here, the Plaintiffs argue that, because they were never
informed of the FLSA’s tip-credit provision and the tip-pooling
arrangement includes employees that are not regularly tipped
(such as busboys), the Defendants’ tip-pooling arrangements were
invalid. Accordingly, in the Plaintiffs’ view, “all tips
received by” them must be “retained by” them and the Defendants
must compensate them for these lost “tip” wages. Even if these
words, in isolation, could somehow be read to create such a
right, § 203(m) “is limited by the ‘broader context of [the
FLSA] as a whole.’” Country Vintner of N.C., LLC v. E. & J.
Gallo Winery, Inc., 718 F.3d 249, 259 (4th Cir. 2013) (quoting
9
In re Total Realty Mgmt., LLC, 706 F.3d 245, 251 (4th Cir.
2013)). See also Yates v. United States, 135 S. Ct. 1074, 1082
(2015) (finding that a fish was not a “tangible object” under
the statute because “[i]n law as in life, however, the same
words, placed in different contexts, sometimes mean different
things”); Santoro, 748 F.3d at 223 (holding the Dodd-Frank Act
prohibition on arbitration agreements did not invalidate all
arbitration agreements because “[n]othing” in the statute’s
context “suggests that Congress sought to bar arbitration of
every claim if the arbitration agreement in question did not
exempt Dodd-Frank claims”).
It is not clear that this language, standing alone,
achieves what the Plaintiffs claim, but when read in context, it
is clear that this language—whatever its import—could give rise
to a cause of action only if the employer is using tips to
satisfy its minimum wage requirements. 7 The FLSA is the “minimum
wage/maximum hour law.” Monahan, 95 F.3d at 1266. Given that
context, § 203(m) “does not state freestanding requirements
pertaining to all tipped employees,” but rather creates rights
and obligations for employers attempting to use tips as a credit
7 For instance, in Richard, we affirmed a damages award when
the employer (Marriott) attempted to use the tip credit to
satisfy its minimum wage obligations but failed to comply with
the requirements of § 203(m).
10
against the minimum wage. Woody Woo, 596 F.3d at 581 (emphasis
in original). The FLSA “requires payment of minimum wages and
overtime wages only,” and “is unavailing where wages do not fall
below the statutory minimum and hours do not rise above the
overtime threshold.” Nakahata v. New York-Presbyterian
Healthcare Sys., 723 F.3d 192, 201 (2d Cir. 2013). We thus find
that the statutory requirements that an employer inform an
employee of § 203(m) and permit the employee to retain all his
tips unless the employee is in a tip pool with other regularly
tipped employees does not apply to employees, like the
Plaintiffs, who are seeking only the recovery of the tips
unrelated to a minimum wage or overtime claim. 8
III.
Here, the Plaintiffs concede that their wages do not fall
below the statutory minimum, and the “the statutory language,”
of the FLSA, including § 203(m), “simply does not contemplate a
claim for wages other than minimum or overtime wages.” Id. at
201-02. Accordingly, the judgment of the district court is
affirmed.
AFFIRMED
8
The Government, in its amicus brief, agrees with the
conclusion that there is no viable private right of action under
the FLSA in this case because the “plaintiffs are not pursuing
minimum wage claims or overtime claims, but instead seek only to
collect improperly withheld tips.” (Gov’t Amicus Br. at 12).
11
PAMELA HARRIS, Circuit Judge, concurring in the judgment:
I concur in the majority’s holding that the Fair Labor
Standards Act (“FLSA” or the “Act”) does not provide a private
cause of action to remedy the particular violations alleged by
the Plaintiffs in this case. I write separately to explain why
I think we can and should reach that result without commenting
on the scope of the substantive protections of § 203(m).
I.
As we decide it today, this case is not about the nature of
the rights afforded by the FLSA, but about how those rights are
to be enforced. The FLSA establishes two separate means of
enforcement: a private right of action for aggrieved employees,
and a public enforcement power wielded by the Wage and Hour
Division of the Department of Labor (“DOL”). See Fair Labor
Standards Act of 1938, Pub. L. No. 75-718, ch. 676, § 16-17, 52
Stat. 1060, 1069 (codified as amended at 29 U.S.C. § 216-17).
Each of those mechanisms plays a distinct and critical role in
the statute’s enforcement regime. See Mitchell v. Lublin,
McGaughy & Assocs., 358 U.S. 207, 214 (1959); Daniel V. Dorris,
Comment, Fair Labor Standards Act Preemption of State Wage-and-
Hour Claims, 76 U. Chi. L. Rev. 1251, 1254–55 (2009).
Section 216(b) of the FLSA is an express private right of
action, under which employees may sue for damages when their
12
employers violate the Act. But that private remedy is limited
in an important respect: It is available only when an employee
is owed “unpaid minimum wages, or [] unpaid overtime
compensation” as a result of a minimum-wage or overtime
violation. 29 U.S.C. § 216(b). DOL’s enforcement powers are
broader. It, too, may sue employers for damages, on behalf of
employees who are owed unpaid minimum wages or overtime
compensation under § 216(b). See 29 U.S.C. § 216(c). But
unlike private plaintiffs, DOL also may seek injunctive relief
against employers under § 217 of the Act, 29 U.S.C. § 217;
Mitchell, 358 U.S. at 214; Michigan Corr. Org. v. Michigan Dep’t
of Corr., 774 F.3d 895, 903 (6th Cir. 2014); see also 29 U.S.C.
§ 211(a) (authorizing DOL to seek injunctive relief under
§ 217), so it is not confined to the recovery of unpaid minimum
wages or overtime compensation in the same way.
This hybrid enforcement scheme produces a familiar
scenario, under which a provision of the FLSA or its
implementing regulations may bind an employer but not subject
the employer to private civil suit. Cf. Alden v. Maine, 527
U.S. 706, 759 (1999) (though immune from private FLSA damages
suits, the “State of Maine has not questioned Congress’ power to
prescribe substantive rules of federal law to which it must
comply”). Whether the FLSA or its implementing regulations
provide a substantive protection to employees, in other words,
13
is a separate question from whether the Act allows those
employees to enforce the protection through a private cause of
action.
And on that latter question (and only that latter
question), this is a perfectly straightforward case: As DOL
urges in its amicus brief, and as the majority holds, the
Plaintiffs have no private cause of action to pursue their
particular tip-related claims. The injury that the Plaintiffs
allege — that they have been required to share their tips with
other employees in a way that does not conform to § 203(m)’s
“tip-pooling” standards — simply is not of the sort redressable
in a private FLSA lawsuit, whether or not it represents a
violation of the Act’s substantive protections.
Section 216(b) contains the only express private cause of
action under the FLSA in which the Plaintiffs’ claims might
conceivably sound. But as the majority explains, the Plaintiffs
have all but conceded that their claims do not fall within that
provision. Maj. Op. at 7. 1 And understandably so. Under §
216(b),
1
Indeed, in light of the Plaintiffs’ failure to address or
even to cite § 216(b) in their filings before the district court
or their briefs before this court, even after that provision was
called to their attention by DOL and the Defendants, we would be
justified in deciding this case on waiver grounds alone. See
Fed. R. App. P. 28(a)(8)(A); Brown v. Nucor Corp., 785 F.3d 895,
(Continued)
14
Any employer who violates the provisions of section
206 or section 207 of this title [addressing minimum
wage and overtime compensation] shall be liable to the
employee or employees affected in the amount of their
unpaid minimum wages, or their unpaid overtime
compensation, as the case may be, and in an additional
equal amount as liquidated damages.
By its terms, then, § 216(b) specifies that the only remedy it
makes available to private plaintiffs is damages “in the amount”
of their “unpaid minimum wages” or “unpaid overtime
compensation,” plus an equal amount in liquidated damages. The
Plaintiffs here, on the other hand, are seeking not “unpaid
minimum wages” or overtime compensation, but instead allegedly
improperly withheld tips. Indeed, they concede that they are
paid a full cash minimum wage, entirely independent of tips, 2 and
expressly disclaim any connection between the tip-related
practices of which they complain and the FLSA’s minimum wage
requirements. J.A. 100. In those circumstances, where there
920 (4th Cir. 2015) (fairness concerns guide application of
waiver rules).
2 This does not mean that an employee lacks a private cause
of action under § 216(b) simply because his or her total
compensation from all sources meets or exceeds the minimum wage
specified in § 206. That much is clear from our decision in
Richard v. Marriott Corp., 549 F.2d 303 (4th Cir. 1977), in
which tipped employees brought suit under § 216(b) alleging
violations of the tip-credit provisions of § 203(m). We held
that the plaintiffs were entitled to recover under § 216(b)
despite the fact that they had received total compensation,
including tips, that met or exceeded the minimum wage rate. Id.
at 305.
15
has been no effort to tie a purported tip violation to the
Defendants’ fulfillment of their minimum wage obligations,
there can be no private cause of action under § 216(b).
In my view, that conclusion — advanced by DOL in its amicus
brief, endorsed by the Defendants, and left unchallenged by the
Plaintiffs — effectively disposes of this case. It may be, as
the majority suggests, that the Plaintiffs, read very
generously, can be understood to advance an alternative
argument: that § 203(m) itself confers on them not only a
substantive right to retain their tips but also a private cause
of action to enforce that right through a suit for damages. But
if so, it makes no difference: Any such argument is plainly
unavailing, and may be dispensed with quickly and simply under
the established principles that govern implied causes of action,
see, e.g., Venkatraman v. REI Sys., Inc., 417 F.3d 418, 423 (4th
Cir. 2005) (discussing presumption against implied causes of
action), without adverting to the scope of substantive
protections under § 203(m).
Section 203(m) contains no express private cause of action.
As the majority recounts, Maj. Op. at 8, it appears in a list of
statutory definitions, and defines “wages” for purposes of the
FLSA while also laying out certain substantive rules regarding
employer use of employee tips to offset minimum wage
obligations. Unlike § 216(b), it does not mention a “right of
16
action” or “damages,” and its text is bereft of any other
language even alluding to a cause of action. If there is a
cause of action somewhere in § 203(m), then it must be one that
is implied, not express.
But the Plaintiffs have not once suggested that we pursue
our standard implied cause of action analysis, and that is just
as well. Absent “strong indicia of a contrary congressional
intent,” we are to presume that Congress “provided precisely the
remedies it considered appropriate,” Middlesex Cnty. Sewerage
Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 15 (1981), and to
refrain from inferring others. That presumption against implied
causes of action is particularly strong where “Congress has
enacted a comprehensive legislative scheme including an
integrated system of procedures for enforcement.” Venkatraman,
417 F.3d at 423 (quoting Nw. Airlines, Inc. v. Transp. Workers
Union of Am., AFL-CIO, 451 U.S. 77, 97 (1981)). And here, of
course, Congress has done just that: established a carefully
reticulated dual system of enforcement, complete with an express
private cause of action limited to the recovery of “unpaid
minimum wages” or “unpaid overtime compensation.” When it comes
to the FLSA, we can say with confidence that “when Congress
wished to provide a private damage remedy, it knew how to do so
and did so expressly,” Touche Ross & Co. v. Redington, 442 U.S.
560, 572 (1979), and there is no ground for us to go beyond what
17
Congress has done by implying an additional and broader private
cause of action. See Venkatraman, 417 F.3d at 423. Whether or
not the Plaintiffs have a “right” under § 203(m), they do not
have a “remedy,” cf. Alexander v. Sandoval, 532 U.S. 275, 286
(2001) (in conducting implied cause of action analysis, courts
should not assume that every private right has a private
remedy), and that is all that is required to dispose of this
appeal.
II.
On those grounds, I concur in the majority’s holding that
the FLSA provides no private cause of action under which the
Plaintiffs may bring their challenges to the Defendants’ tip-
pooling practices. I write separately only because I am
concerned that in reaching this straightforward conclusion about
remedies, the majority has said more than is necessary about the
distinct question of substantive rights, and in particular,
about the scope of the protection afforded employees by
§ 203(m). See Maj. Op. at 10–11.
We always are well advised to say no more than necessary to
decide the case at hand. But caution is particularly warranted
here, because the meaning of § 203(m), and the degree to which
it regulates employer use of tips, is now the subject of live
debate in the federal courts. The basic question is this:
18
Section 203(m), as the majority explains, Maj. Op. at 8–9,
allows employers to use employee tips to offset a portion — but
only a specified portion, see Richard, 549 F.2d at 304 — of
their minimum wage obligations, so long as “all tips received by
[the] employee [are] retained by the employee” or shared with
other tipped employees as part of a qualifying “tip-pool”
arrangement. 29 U.S.C. § 203(m). What of employers, like the
Defendants here, who pay their tipped employees a full cash
minimum wage, and do not claim the “tip credit” allowed by §
203(m)? May they take the tip money collected by their
employees and use it for their own benefit, free of § 203(m)’s
tip-pooling rules or other restrictions, as the Defendants
argue? Or, as the Plaintiffs argue, do tipped employees retain
a right to the tips they receive from customers, whether or not
they are being paid a full cash minimum wage by their employers?
A 2011 DOL regulation addresses this question directly,
providing that “[t]ips are the property of the employee whether
or not the employer has taken a tip credit under [§ 203(m)],”
and that an “employer is prohibited from using an employee’s
tips, whether or not it has taken a tip credit, for any reason
other than that which is statutorily permitted in [§ 203(m)]: As
a credit against its minimum wage obligations to the employee,
or in furtherance of a valid tip pool.” 29 C.F.R. § 531.52.
After an extensive canvass of § 203(m)’s text and legislative
19
history, see Updating Regulations Issued Under the Fair Labor
Standards Act, 76 Fed. Reg. 18,832, 18,838–42 (Apr. 5, 2011),
DOL concluded that the contrary reading of the statute is
“unsupportable,” largely because it would allow for easy evasion
of the statutory cap on the percentage of an employer’s minimum
wage obligation that may be satisfied through tips:
If . . . the FLSA places limitations on an employer’s
use of its employees’ tips only in the context of a
tip credit, an employer could simply eschew the tip
credit and use a greater part of its employees’ tips
toward its minimum wage obligations than permitted
under [§ 203(m)]. . . . If an employer could avail
itself of this loophole, it would have no reason to
ever elect the tip credit because, instead of using
only a portion of its employees’ tips to fulfill its
minimum wage obligation, it could use all of its
employees’ tips to fulfill its entire minimum wage
obligation to the tipped employees or other employees.
Id. at 18,842; see also Gov’t Amicus Br. at 16.
The validity of that regulation has been put squarely at
issue in a series of federal court cases. See, e.g., Oregon
Rest. & Lodging v. Solis, 948 F. Supp. 2d 1217, 1223-24 (D. Or.
2013) (invalidating the regulation under Chevron) (appeal
pending); Trinidad v. Pret A Manger (USA) Ltd., 962 F. Supp. 2d
545, 562-63 (S.D.N.Y. 2013) (following Oregon Rest. & Lodging).
And although the majority carefully clarifies that we have no
occasion to opine on the regulation today, Maj. Op. at 5 n.5, I
am concerned that some of the majority’s analysis of § 203(m)
nevertheless might be understood as bearing on whether DOL’s
20
regulation is a reasonable interpretation of § 203(m) or
permissible exercise of the agency’s “gap-filling” authority.
See Gov’t Amicus Br. at 15 (quoting Long Island Care at Home,
Ltd. v. Coke, 551 U.S. 158, 165 (2007)).
That would be particularly unfortunate in this case,
because substantive discussion of § 203(m) is not only
unnecessary but also without the benefit of thorough advocacy.
The Defendants have made the case against DOL’s regulation,
arguing that it cannot be reconciled with the plain text of
§ 203(m), see Maj. Op. at 8 (setting out text of § 203(m)),
which unambiguously applies only when an employer claims the tip
credit. See Br. of Appellees at 13–18. But the Plaintiffs have
disclaimed expressly any reliance on the DOL regulation, and so
no party to this case has mounted a defense of that regulation. 3
Under those circumstances, we should take special care not to
enter, even a little, into a debate that all agree is not
properly before us.
3DOL was granted leave to file an amicus brief, in which it
argued first for dismissal of the Plaintiffs’ claims for want of
a cause of action and then defended its regulation. But because
DOL was not permitted to participate at oral argument, we have
had no opportunity to question DOL or to clarify its position.
21