The National Restaurant Association, joined by several restaurants and trade groups in the 9th Circuit Court of Appeals jurisdiction, has filed suit against the Department of Labor over a regulation that forbids tip-pooling arrangements that include back-of-the-house (kitchen) workers.
The 9th Circuit Court in Cumbie v. Woody Woo Inc. in 2010 ruled that restaurants are free to share tips with kitchen staff so long as they pay these employees at least full minimum wage and do not take a tip credit for them.
The DOL's Wage and Hour Division (WHD) was quick to refute that ruling and announced it would enforce its decision even in establishments located within the 9th Circuit Court of Appeals' jurisdiction, 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 of this year, the National Restaurant Association and other industry trade groups asked the DOL to withdraw its ruling, but it refused. The lawsuit is the result of that refusal.
“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 attorney 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.”