Marsh v. J. Alexander's LLC, No. 15-15791 (9th Cir. 2017)Annotate this Case
No provision with the force of law permits the Department of Labor to require employers to engage in time tracking and accounting for minutes spent in diverse tasks before claiming a tip credit. The Ninth Circuit vacated the district court's final orders and judgments in favor of defendants in an action brought by former servers and bartenders under the Fair Labor Standards Act (FLSA), 29 U.S.C. 206(a)(1)(c). Plaintiffs alleged that their employers improperly claimed their tips as a credit toward the required minimum wage. The panel held that the DOL's interpretation, in its Field Operations Handbook, of 29 C.F.R. 531.56(e), a regulation addressing application of the FLSA's tip credit provision to the situation in which an employee works for an employer in two different jobs, did not merit controlling deference because the DOL's interpretation was inconsistent with the dual jobs regulation and attempted to create de facto a new regulation. In this case, plaintiffs could not state a claim under section 206 by alleging that discrete "related" tasks or duties, which were performed intermittently over the course of the day and were intermingled with their duties directed at generating tips, comprise a dual job when aggregated together over the course of a workweek. The panel remanded to allow plaintiffs opportunities to propose new amended complaints.