• Home
    Home We Serve America's Restaurants Representing nearly 500,000 restaurant businesses, we advocate for restaurant and foodservice industry interests and provide tools and systems that help members of all sizes achieve success.
  • Foundation
    Foundation Building & Retaining Talent The NRAEF is focused on developing a stronger workforce and building the next generation of industry leaders through education, scholarships and community engagement.
  • Show 2018
    Show 2018 May 19-22, 2018 As the international foodservice marketplace, the National Restaurant Association Show provides unparalleled opportunities for buyers and sellers to come together, conduct business and learn from each other.
  • ServSafe
    ServSafe Minimize Risk. Maximize Protection. For over 40 years, ServSafe® training programs have delivered the knowledge, leadership and protection that have earned the trust and confidence of business leaders everywhere.

National Restaurant Association - Restaurant associations take action on behalf of workforce

Skip to navigation Skip to content

News & Research

Share:
Email Print
News RSS

Restaurant associations take action on behalf of workforce

Restaurant industry trade associations have filed a lawsuit against the U.S. Department of Labor on behalf of restaurants and restaurant employees who share in tips and participate in tip pools.

The lawsuit was brought by the Oregon Restaurant and Lodging Association, the Washington Restaurant Association, the Alaska CHARR and the National Restaurant Association, along with a Portland, Oregon restaurant and an employee of that restaurant.

The lawsuit, filed in the United States District Court in Portland, Oregon, asks the court to declare recent DOL regulations prohibiting back-of-the-house (kitchen) workers from sharing in tips left by customers unlawful and not applicable to restaurants that pay employees who share the tips at least the federal or the applicable (if higher) state minimum wage with no tip credit.

In 2010, the U.S. Court of Appeals for the Ninth Circuit -- the federal appellate court with jurisdiction over numerous Western states, including, among others, Alaska, Oregon, and Washington -- ruled in Cumbie v. Woody Woo Inc., that federal law does not prohibit an employer from instituting a tip pool that includes back-of-the-house employees if that employer pays its employees who share in tips the full minimum wage and does not take a tip credit. DOL responded approximately a year later, publishing regulations in direct conflict with the Woody Woo decision.

Shortly after the DOL published these regulations on April 5, 2011, restaurant trade groups and at least one U.S. senator contacted the DOL to raise concerns about these regulations and the confusion they create for employers, particularly in the ninth circuit, given their conflict with the Woody Woo decision. Enforcement of DOL’s new regulations against employers in the Ninth Circuit was left unclear by the DOL at that time.

However, on Feb. 29, 2012, the DOL issued a field assistance bulletin clarifying its position by rejecting the Ninth Circuit’s Woody Woo decision and declaring: “The Wage and Hour Division will enforce nationwide the 2011 final rule [including against employers in the Ninth Circuit] explaining [DOL’s position] that a tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit . . . .”

In March 2012, restaurant trade associations again asked the DOL to reconsider its position on this issue, to withdraw its February 29 bulletin, and to clarify that employers in the ninth circuit who pay their employees the full minimum wage and do not take a tip credit may legally implement tip pools that adhere to the court's Woody Woo ruling. DOL rejected this request.

As a result, the plaintiffs felt they were left with no choice but to seek court intervention. The plaintiffs' position is that the DOL’s 2011 regulations are unlawful and also fail to take into consideration the intent of the customers who leave tips, as well as of the employees who share in the tips.
 
The plaintiffs cite as one example the employee who joined the lawsuit. The employee currently works as a server for the plaintiff restaurant, and initiated the effort to include back-of-house employees in the restaurant's tip pool. As the court complaint explains, this was done as a matter of fairness and to recognize the fact that back-of-house employee performance directly impacts guest satisfaction and tips left by those guests.

Jackson Lewis LLP, a nationwide labor and employment law firm, and Paul DeCamp, a partner in the firm's Washington, DC, office and former administrator of DOL’s Wage and Hour Division, represent the plaintiffs in this litigation. "This issue is about fairness to restaurant workers, and it is extremely important to those who earn their livelihood preparing and serving our food," said Paul DeCamp on behalf of the plaintiffs. "Simply put, federal law clearly allows a restaurant to give kitchen personnel such as cooks and dishwashers a share in a tip pool when the restaurant pays its employees the full federal minimum wage and does not take a tip credit. Plaintiffs are asking the court to compel DOL to respect that law."

Conserve RSS Healthcare RSS Conserve RSS

▲ Back to Top

We're glad you're here!®

® 2012-2017 National Restaurant Association. All rights reserved.

2055 L St. NW, Suite 700, Washington, DC 20036
(202) 331-5900 | (800) 424-5156