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National Restaurant Association - Tip Pooling

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Restaurant Law Center

Tip Pooling

Case: National Restaurant Association et al v. U.S. Department of Labor et al

Status: Petition submitted to U.S. Supreme Court, Jan. 19, 2017

Issue: We are challenging the U.S. Department of Labor’s position that it can apply its 2011 federal tip-credit restrictions to employers who don't take a tip credit. Specifically, the DOL says it can prohibit these employers from setting up tip-pooling arrangements that include employees who are not customarily tipped, such as back-of-the-house staff.

  • We won a decisive victory on this issue in a 2010 case, Cumbie v. Woody Woo Inc., before the 9th Circuit Court of Appeals.
  • We won again in federal district court in 2013, in the Oregon Restaurant and Lodging Association et al case.
  • In February 2016, a split three-judge panel of the 9th Circuit reversed this to rule in favor of the DOL, ignoring the 9th Circuit’s own precedent in the Woody Woo case
  • The 9th Circuit denied our petition for a rehearing in September 2016; however, 10 judges issued a blistering dissent, citing Woody Woo and a split among circuit courts on the issue. These factors could open the door to U.S. Supreme Court consideration in 2017.
  • Our co-plaintiffs are the Oregon Restaurant & Lodging Association, the Washington Restaurant Association, and the Alaska Cabaret, Hotel, Restaurant and Retailers Association, along with an Oregon restaurateur and one of the restaurant’s employees. The 9th Circuit’s ruling is on hold pending our petition to the Supreme Court.

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