United States District Court, D. Kansas
Josh Nelson, on behalf of himself and all others similarly situated, Plaintiffs,
Firebirds of Overland Park, LLC; and Firebirds International, LLC, Defendants.
MEMORANDUM & ORDER
W. Lungstrum United States District Judge
is a former server at defendants' restaurant location in
Overland Park, Kansas. He filed this wage and hour lawsuit,
individually and on behalf of others similarly situated,
against defendants alleging violations of the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 201 et seq., and
various state wage payment laws. Plaintiff alleges that
defendants, while taking advantage of the FLSA's
"tip credit" provision, required him and putative
class members to spend more than 20 percent of their time
performing non-tip-producing "side work"
activities. This matter is presently before the court on
plaintiffs motion for conditional class certification under
§ 216(b) of the FLSA (doc. 39) and defendants'
motion for partial summary judgment (doc. 42).As set forth in
more detail below, plaintiff's motion is granted in part
and denied in part and defendants' motion is denied.
December 2013 through November 2015, plaintiff Josh Nelson
worked as a server for defendants at one of defendants'
restaurants in Overland Park, Kansas. During that time,
defendants paid plaintiff $2.15 per hour and relied on the
"tip credit" provision of the FLSA to make up the
difference between the paid wage and the federal minimum
wage. See 29 U.S.C. § 203(m). Plaintiff asserts
that he routinely spent more than 20 percent of his time
performing "non-tip-producing activities" and that
defendants violated the tip-credit provision (and the minimum
wage provision) by failing to pay plaintiff the federal
minimum wage for that time. Plaintiff further alleges that
defendants' uniform compensation policy requires that all
servers are paid exclusively under the tip-credit provision
and that servers are never paid the minimum wage regardless
of whether they spend more than 20 percent of their time
performing non-tip-producing activities. Plaintiff alleges
that defendants failed to track the amount of time spent by
servers performing non-tip-producing activities and that, as
a result of these policies and procedures, defendants
routinely failed to pay their servers the federal minimum
wage in violation of the FLSA.
Tip Credit Provision of the FLSA
Fair Labor Standards Act (FLSA) of 1938 requires employers to
pay a minimum hourly wage, which is currently $7.25 per hour.
29 U.S.C. § 206(a)(1)(C). For a "tipped employee,
" defined by the statute as an employee engaged in an
occupation in which he or she customarily and regularly
receives more than $30 per month in tips, 29 U.S.C. §
203(t), the employer must pay a wage of at least $2.13 per
hour plus an additional amount based on tips received by the
employee that is equal to the difference between the $2.13
cash wage and the current $7.25 minimum wage. 29 U.S.C.
§ 203(m). In other words, the tip-credit provision of
the FLSA permits an employer to pay tipped employees a cash
wage of as little as $2.13 an hour, and then use a portion of
the employees' tips to make up the difference between
that hourly cash wage and the federal minimum wage.
Romero v. Top-Tier Colorado LLC, 849 F.3d 1281, 1283
(10th Cir. 2017) (citing 29 U.S.C. § 203(m); Fast v.
Applebee 's Int'l, Inc., 638 F.3d 872, 876 (8th
Tenth Circuit has recognized, § 203(m)'s tip-credit
provision is "not without its limits." Id.
at 1284. The Department of Labor (DOL) has promulgated
regulations to implement the tip credit and those regulations
"recognize that an employee may hold more than one job
for the same employer, one which generates tips and one which
does not, and that the employee is entitled to the full
minimum wage rate while performing the job that does not
generate tips." Id. (quoting Fast, 638
F.3d at 875 (citing 29 C.F.R. § 531.56(e))).
Specifically, the "dual jobs" regulation provides:
Dual jobs. In some situations an employee is employed in a
dual job, as for example, where a maintenance man in a hotel
also serves as a waiter. In such a situation the employee, if
he customarily and regularly receives at least $30 a month in
tips for his work as a waiter, is a tipped employee only with
respect to his employment as a waiter. He is employed in two
occupations, and no tip credit can be taken for his hours of
employment in his occupation of maintenance man. Such a
situation is distinguishable from that of a waitress who
spends part of her time cleaning and setting tables, toasting
bread, making coffee and occasionally washing dishes or
glasses. It is likewise distinguishable from the counterman
who also prepares his own short orders or who, as part of a
group of countermen, takes a turn as a short order cook for
the group. Such related duties in an occupation that is a
tipped occupation need not by themselves be directed toward
29C.F.R. § 531.56(e).
has further interpreted its dual jobs regulation through
§ 30d00(e) of its Field Operations Handbook (FOH), which
provides "that if a tipped employee spends a substantial
amount of time (defined as more than 20 percent) performing
related but nontipped work, . . . then the employer may not
take the tip credit for the amount of time the employee
spends performing those duties." Romero, 849
F.3d at 1284 (quoting Fast, 638 F.3d at 875).
Specifically, § 30d00(e) of the FOH provides as follows:
(e) Reg 531.56(e) permits the taking of the tip credit for
time spent in duties related to the tipped occupation, even
though such duties are not by themselves directed toward
producing tips (i.e. maintenance and preparatory or closing
activities). For example, a waiter/waitress, who spends some
time cleaning and setting tables, making coffee, and
occasionally washing dishes or glasses may continue to be
engaged in a tipped occupation even though these duties are
not tip producing, provided such duties are incidental to the
regular duties of the server (waiter/waitress) and are
generally assigned to the servers. However, where the facts
indicate that specific employees are routinely assigned to
maintenance, or that tipped employees spend a substantial
amount of time (in excess of 20 percent) performing general
preparation work or maintenance, no tip credit may be taken
for the time spent in such duties.
Field Operations Handbook § 30d00(e).
support of his motion for conditional certification,
plaintiff alleges that defendants had a uniform policy that
required servers to spend more than 20 percent of their time
engaged in non-tip-producing activities and that defendants
unlawfully failed to pay the full minimum wage for that time.
Plaintiff, for example, alleges that defendants uniformly
required servers to perform non-tip-producing tasks such as
brewing coffee and tea; wiping down server station counters,
beverage machines, light fixtures, tables and chairs;
stocking tea, coffee, ice, glasses, and napkins; sweeping
floors and "bisseling" carpets; refilling
condiments; and polishing silverware. Plaintiff alleges that
the completion of these tasks routinely exceeded 20 percent
of the hours worked in a work week and, thus, that servers
should have been paid the full minimum wage for that time. In
other words, plaintiff asserts that defendants violated the
FLSA by using § 203(m)'s tip credit for hours that,
according to plaintiff, were not tip-credit eligible under 29
C.F.R. § 531.56(e) and § 30d00(e) of the applicable
FOH. Plaintiff asserts that defendants' uniform,
nationwide policies requiring servers to spend more than 20
percent of their time engaged in non-tip-producing activities
and refusing to pay servers the full minimum wage for that
time justifies conditional certification of a nationwide
class of all current and former servers employed by
defendants from May 12, 2014 to the present.
oppose the motion on various grounds. As a threshold matter,
defendants contend that the DOL's interpretation of the
dual jobs regulation, as set forth in § 30d00(e) of the
FOH, is not entitled to deference and should be disregarded
by the court. This issue is also the basis for
defendants' motion for partial summary judgment.
According to defendants, they are entitled to summary
judgment on plaintiffs "tip credit" claims because
those claims are based entirely on the FOH, which is not
entitled to deference under Auer v. Robbins, 519
U.S. 452 (1997). In response, plaintiff urges that the FOH is
entitled to Auer deference and that the FOH's
interpretation of the dual jobs regulation governs plaintiffs
claims in this case. "Auer ordinarily calls for
deference to an agency's interpretation of its own
ambiguous regulation." Christopher v. SmithKline
Beecham Corp.,567 U.S. 142, 155 (2012). "[T]his
general rule does not apply in all cases." Id.
As a threshold matter, Auer deference is warranted
only if the language of the regulation in question is
ambiguous, "lest a substantively new rule be promulgated
under the guise of interpretation." EEOC v.
Abercrombie & Fitch ...