Mohammad Sazzad v. Ryman Hospitality Propertie

Filing

PUBLISHED AUTHORED OPINION filed. Originating case number: 8:13-cv-02911-RWT. [999630081]. [14-1485]

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 1 of 21

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1485

PATRICIO DAVID TREJO,
Plaintiff,
MOHAMMAD SAZZAD JAHIR; ANTHONY MINTU GOMES,
Plaintiffs – Appellants,
v.
RYMAN HOSPITALITY PROPERTIES, INC., a Delaware corporation;
MARRIOTT INTERNATIONAL, INC., a Delaware corporation,
Defendants – Appellees.
---------------------------UNITED STATES OF AMERICA,
Amicus Curiae.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District Judge.
(8:13-cv-02911-RWT)

Argued:

May 12, 2015

Decided:

July 29, 2015

Before SHEDD, DUNCAN, and HARRIS, Circuit Judges.

Affirmed by published opinion.
Judge Shedd wrote the opinion,
in which Judge Duncan joined.
Judge Harris wrote a separate
opinion concurring in the judgment.

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 2 of 21

ARGUED: Charity Chidinma Emeronye Swift, SWIFT & SWIFT,
ATTORNEYS
AT
LAW,
P.L.L.C.,
Alexandria,
Virginia,
for
Appellants. Joshua B. Waxman, LITTLER MENDELSON, P.C., Houston,
Texas; Daniel Vincent Johns, BALLARD SPAHR LLP, Philadelphia,
Pennsylvania, for Appellees.
ON BRIEF: Stephen Christopher
Swift, SWIFT & SWIFT, ATTORNEYS AT LAW, P.L.L.C., Alexandria,
Virginia, for Appellants.
Steven E. Kaplan, Washington, D.C.,
David B. Jordan, LITTLER MENDELSON, P.C., Houston, Texas, for
Appellee Marriott International, Incorporated; Michelle M.
McGeogh, BALLARD SPAHR LLP, Baltimore, Maryland, for Appellee
Ryman Hospitality Properties, Inc.
Rod J. Rosenstein, United
States Attorney, Baltimore, Maryland, Joyce R. Branda, Acting
Assistant Attorney General, Michael Jay Singer, John S. Koppel,
Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Amicus United States of America.

2

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 3 of 21

SHEDD, Circuit Judge:
Mohammad Sazzad and Anthony Gomes (the Plaintiffs) 1 brought
this

action

Properties

against
Inc.,

their

and

employers,

Marriott

Ryman

International,

Hospitality
Inc.

(the

Defendants), alleging violations of the tip-credit provision of
the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(m), their
collective bargaining agreement, and Maryland’s Wage Payment and
Collection

Law.

For

the

following

reasons,

we

affirm

the

district court’s dismissal of the complaint.
I.
The Plaintiffs work as servers for hotels and restaurants
at

the

National

Harbor

complex

in

Prince

George’s

County,

Maryland. 2 The properties were previously owned by Ryman but are
currently owned and operated by Marriott. The Plaintiffs are
also members of the UNITE HERE, Local 25 union. Although the
servers

have

not

voluntarily

agreed

to

a

tip-pooling

arrangement, the Plaintiffs allege that the Defendants take a

1

A third plaintiff, Patricio Trejo, did not file an
appearance on appeal and was dismissed pursuant to Local Rule 45
for failure to prosecute.
2

The facts are taken from the Plaintiffs’ complaint.
Because we are reviewing the district court’s grant of a Rule
12(b)(6) motion to dismiss, we accept the allegations in the
complaint as true and construe them in the light most favorable
to the Plaintiffs. See Coleman v. Maryland Court of Appeals, 626
F.3d 187, 189 (4th Cir. 2010).

3

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 4 of 21

portion of their tips—roughly 4% of the total daily food and
drink sales—and redistribute those tips to bartenders, server
assistants,

busboys,

and

food

runners.

(J.A.

11-12).

Sazzad

eventually asked a union official if the tip-pooling arrangement
was legal and was told that it was not.
In

response,

the

Plaintiffs

filed

suit

against

the

Defendants, alleging that the tip-pooling arrangement violated
the FLSA, 29 U.S.C. § 203(m), the 2009 Collective Bargaining
Agreement
Maryland

between
Wage

UNITE

Payment

HERE

and

and

the

Collection

Defendants,
Law.

and

the

Importantly,

the

Plaintiffs allege that the Defendants violated the FLSA by “not
paying Plaintiffs all their earned tips,” (J.A. 14), and limit
their requested relief to, inter alia, “the amount of tip wages”
taken by the Defendants (J.A. 16). Thus, the Plaintiffs do not
allege that they were paid below minimum wage; even absent tips,
their

base

salary

was

above

the

minimum

wage

at

all

times.

Further, the Plaintiffs do not allege that they were forced to
work overtime without proper pay.
The

district

Defendants’

Rule

court,
12(b)(6)

following

a

motion

dismiss.

to

hearing,
As

granted
to

the

the
FLSA

count, the court held that because the Plaintiffs were paid the
minimum wage, § 203(m) “does not have anything to do with this
case.” (J.A. 131). The court noted that the Plaintiffs “do not
want to” allege a violation of Department of Labor Regulations
4

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 5 of 21

which extend § 203(m) to employers who are not utilizing the
statute’s tip credit, (J.A. 131), but nonetheless stated that
those

regulations

authority

and

.

.

“exceeded
.

don’t

[the

get

Department

past

step

1

of

of

Labor’s]

the

Chevron 3

analysis in terms of deference,” (J.A. 132). The court dismissed
the collective bargaining count for failure to exhaust, and the
Maryland state law count because the Plaintiffs agreed that a
“tip”

was

not

a

“wage”

under

the

Maryland

statute.

The

Plaintiffs timely appealed. 4
II.
The

Plaintiffs

continue

to

press

their

claim

that

the

Defendants violated the FLSA by requiring them to join the tippooling arrangement. 5

We review the grant of a motion to dismiss

under Rule 12(b)(6) de novo. United States ex rel. Rostholder v.

3

Chevron U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984).
4

The Plaintiffs did not appeal the district court’s
dismissal of the collective bargaining or Maryland state law
claims.
5

After briefing concluded, the Government filed an amicus
brief primarily arguing that the Department of Labor regulations
promulgated under § 203(m), which require that employers comply
with the statutory restrictions on use of employee tips even if
they otherwise are paying minimum wage, are a valid exercise of
the
agency’s
gap-filling
authority.
The
Plaintiffs
have
repeatedly argued that they are pursuing a claim only under the
FLSA and that the regulations are “not an issue” in this case.
(J.A. 100). Accordingly, we have no occasion to opine on the
validity of the regulations in this appeal.

5

Appeal: 14-1485

Doc: 67

Omnicare,

Filed: 07/29/2015

Inc.,

Plaintiffs’

745

F.3d

argument

Pg: 6 of 21

694,

turns

700

on

a

(4th

Cir.

question

2013).

of

The

statutory

interpretation. “When interpreting statutes we start with the
plain language.” U.S. Dep’t of Labor v. N.C. Growers Ass’n, 377
F.3d 345, 350 (4th Cir. 2004). “It is well established that when
the

statute’s

language

is

plain,

the

sole

function

of

the

courts-at least where the disposition required by the text is
not absurd-is to enforce it according to its terms.” Lamie v.
U.S. Tr., 540 U.S. 526, 534 (2004) (internal quotation marks
omitted). In determining the plain meaning of the text, we must
consider

the

“broader

context

of

the

statute”

as

a

whole,

Santoro v. Accenture Fed. Servs., LLC, 748 F.3d 217, 223 (4th
Cir. 2014), in light of the “cardinal rule,” that “the meaning
of statutory language, plain or not, depends on context.” King
v.

St.

Vincent’s

Hosp.,

502

U.S.

215,

221

(1991)

(citations

omitted).
The FLSA is best understood as the “minimum wage/maximum
hour law.” Monahan v. County of Chesterfield, 95 F.3d 1263, 1266
(4th Cir. 1996) (internal quotation marks omitted). In enacting
the FLSA, Congress intended “to protect all covered workers from
substandard wages and oppressive working hours.” Barrentine v.
Arkansas–Best

Freight

Sys.,

Inc.,

450

U.S.

728,

739

(1981).

“‘The substantive sections of the FLSA, narrowly focusing on
minimum

wage

rates

and

maximum
6

working

hours,

bear

out

its

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 7 of 21

limited purposes.’” Monahan, 95 F.3d at 1267 (quoting Lyon v.
Whisman,

45

F.3d

758,

764

(3d

Cir.

1995)).

Thus,

the

Act

requires payment of a minimum wage, 29 U.S.C. § 206(a), and
limits the maximum working hours an employee may work without
receiving

overtime

compensation,

29

U.S.C.

§

207(a).

Section

216(b) provides a cause of action for violations of these two
provisions, permitting employees to seek damages, as relevant
here, in “the amount of their unpaid minimum wages” and (in
appropriate

circumstances)

an

equal

amount

of

liquidated

damages. 29 U.S.C. § 216(b). 6
Here,

the

Plaintiffs

concede

that

they

are

paid

a

full

minimum wage absent tips. See J.A. 100 (“Section 206 talks about
employer’s paying minimum wage. We never mentioned minimum wage
in our complaint . . . because that was not our problem”). Under
direct questioning from the district court, and at oral argument
before

us,

the

Plaintiffs

affirmed

that

they

are

paid

the

minimum wage and that the Defendants do not claim the tip credit
to pay the minimum wage. Accordingly, the Plaintiffs essentially
concede that they do not have a private right of action under §
216(b) because they are not seeking damages for unpaid minimum
wages. See Monahan, 95 F.3d at 1284 (rejecting a pure gap time
6

The Secretary of Labor is empowered to bring an action for
unpaid wages under § 216(b) and an action to restrain violations
of the FLSA, 29 U.S.C. § 217.

7

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 8 of 21

pay claim under the FLSA because, “[i]f the employee has been
properly

paid

at

or

above

minimum

wage

for

all

nonovertime

hours” there is no FLSA violation).
Instead,
commonly

however,

called

the

the
tip

Plaintiffs
credit

argue

provision,

that

§

creates

203(m),
a

free-

standing right to bring a claim for lost “tip” wages. Passed in
1974, § 203(m) defines the term “wage” for “tipped employees” as
follows:
In determining the wage an employer is required to pay
a tipped employee, the amount paid such employee by
the employee’s employer shall be an amount equal to-(1) the cash wage paid such employee which for
purposes of such determination shall be not less than
the cash wage required to be paid such an employee on
August 20, 1996; and (2) an additional amount on
account of the tips received by such employee which
amount is equal to the difference between the wage
specified in paragraph (1) and the wage in effect
under section 206(a)(1) of this title.
The additional amount on account of tips may not
exceed the value of the tips actually received by an
employee.
The preceding 2 sentences shall not apply with respect
to any tipped employee unless such employee has been
informed by the employer of the provisions of this
subsection, and all tips received by such employee
have been retained by the employee, except that this
subsection shall not be construed to prohibit the
pooling of tips among employees who customarily and
regularly receive tips.
29 U.S.C. § 203(m).
In other words, § 203(m) permits an employer, in certain
circumstances,

to

take

a

credit

against

the

minimum

wage

by

using an employees’ tips as “wages.” An employer can thus pay
8

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 9 of 21

tipped employees (1) a cash wage of $2.13 plus (2) an additional
amount in tips that brings the total wage to the federal minimum
wage. Cumbie v. Woody Woo, Inc., 596 F.3d 577, 580 (9th Cir.
2010). In a situation where the employer uses tips to help meet
the minimum wage requirement for its employees, the employee
must be informed of this fact and the employee must also be
permitted to keep tips, unless the employee is part of a tip
pool

with

other

employees

who

regularly

receive

tips.

The

provision was “to make clear the original Congressional intent
that an employer could not use the tips of a ‘tipped employee’
to

satisfy

more

than

[a

certain

percentage]

of

the

Act’s

applicable minimum wage.” Richard v. Marriott Corp., 549 F.2d
303, 304 (4th Cir. 1977) (internal quotation marks omitted).
Here, the Plaintiffs argue that, because they were never
informed of the FLSA’s tip-credit provision and the tip-pooling
arrangement

includes

employees

that

are

not

regularly

tipped

(such as busboys), the Defendants’ tip-pooling arrangements were
invalid.

Accordingly,

in

the

Plaintiffs’

view,

“all

tips

received by” them must be “retained by” them and the Defendants
must compensate them for these lost “tip” wages. Even if these
words, in isolation, could somehow be read to create such a
right, § 203(m) “is limited by the ‘broader context of [the
FLSA] as a whole.’” Country Vintner of N.C., LLC v. E. & J.
Gallo Winery, Inc., 718 F.3d 249, 259 (4th Cir. 2013) (quoting
9

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 10 of 21

In re Total Realty Mgmt., LLC, 706 F.3d 245, 251 (4th Cir.
2013)). See also Yates v. United States, 135 S.Ct. 1074, 1082
(2015) (finding that a fish was not a “tangible object” under
the statute because “[i]n law as in life, however, the same
words, placed in different contexts, sometimes mean different
things”); Santoro, 748 F.3d at 223 (holding the Dodd-Frank Act
prohibition

on

arbitration

arbitration

agreements

agreements

because

did

not

“[n]othing”

invalidate

in

the

all

statute’s

context “suggests that Congress sought to bar arbitration of
every claim if the arbitration agreement in question did not
exempt Dodd-Frank claims”).
It

is

not

clear

that

this

language,

standing

alone,

achieves what the Plaintiffs claim, but when read in context, it
is clear that this language—whatever its import—could give rise
to a cause of action only if the employer is using tips to
satisfy its minimum wage requirements. 7 The FLSA is the “minimum
wage/maximum hour law.” Monahan, 95 F.3d at 1266. Given that
context,

§

203(m)

“does

not

state

freestanding

requirements

pertaining to all tipped employees,” but rather creates rights
and obligations for employers attempting to use tips as a credit

7

For instance, in Richard, we affirmed a damages award when
the employer (Marriott) attempted to use the tip credit to
satisfy its minimum wage obligations but failed to comply with
the requirements of § 203(m).

10

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 11 of 21

against the minimum wage. Woody Woo, 596 F.3d at 581 (emphasis
in original). The FLSA “requires payment of minimum wages and
overtime wages only,” and “is unavailing where wages do not fall
below the statutory minimum and hours do not rise above the
overtime

threshold.”

Nakahata

v.

New

York-Presbyterian

Healthcare Sys., 723 F.3d 192, 201 (2d Cir. 2013). We thus find
that

the

statutory

requirements

that

an

employer

inform

an

employee of § 203(m) and permit the employee to retain all his
tips unless the employee is in a tip pool with other regularly
tipped

employees

Plaintiffs,

who

does
are

not

seeking

apply
only

to
the

employees,
recovery

of

like
the

the
tips

unrelated to a minimum wage or overtime claim. 8
III.
Here, the Plaintiffs concede that their wages do not fall
below the statutory minimum, and the “the statutory language,”
of the FLSA, including § 203(m), “simply does not contemplate a
claim for wages other than minimum or overtime wages.” Id. at
201-02.

Accordingly,

the

judgment

of

the

district

court

is

affirmed.
AFFIRMED
8

The Government, in its amicus brief, agrees with the
conclusion that there is no viable private right of action under
the FLSA in this case because the “plaintiffs are not pursuing
minimum wage claims or overtime claims, but instead seek only to
collect improperly withheld tips.” (Gov’t Amicus Br. at 12).

11

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 12 of 21

PAMELA HARRIS, Circuit Judge, concurring in the judgment:
I

concur

in

the

majority’s

holding

that

the

Fair

Labor

Standards Act (“FLSA” or the “Act”) does not provide a private
cause of action to remedy the particular violations alleged by
the Plaintiffs in this case.

I write separately to explain why

I think we can and should reach that result without commenting
on the scope of the substantive protections of § 203(m).

I.
As we decide it today, this case is not about the nature of
the rights afforded by the FLSA, but about how those rights are
to be enforced.

The FLSA establishes two separate means of

enforcement: a private right of action for aggrieved employees,
and a public enforcement power wielded by the Wage and Hour
Division of the Department of Labor (“DOL”).

See Fair Labor

Standards Act of 1938, Pub. L. No. 75-718, ch. 676, § 16-17, 52
Stat. 1060, 1069 (codified as amended at 29 U.S.C. § 216-17).
Each of those mechanisms plays a distinct and critical role in
the

statute’s

enforcement

regime.

See

Mitchell

v.

Lublin,

McGaughy & Assocs., 358 U.S. 207, 214 (1959); Daniel V. Dorris,
Comment, Fair Labor Standards Act Preemption of State Wage-andHour Claims, 76 U. Chi. L. Rev. 1251, 1254–55 (2009).
Section 216(b) of the FLSA is an express private right of
action, under which employees may sue for damages when their
12

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

employers violate the Act.
in an important respect:
is

owed

“unpaid

compensation”
violation.
broader.
employees

But that private remedy is limited
It is available only when an employee

minimum

as

a

Pg: 13 of 21

wages,

result

of

a

29 U.S.C. § 216(b).

or

[]

unpaid

minimum-wage

or

overtime
overtime

DOL’s enforcement powers are

It, too, may sue employers for damages, on behalf of
who

are

owed

unpaid

compensation under § 216(b).

minimum

wages

or

overtime

See 29 U.S.C. § 216(c).

But

unlike private plaintiffs, DOL also may seek injunctive relief
against employers under § 217 of the Act, 29 U.S.C. § 217;
Mitchell, 358 U.S. at 214; Michigan Corr. Org. v. Michigan Dep’t
of Corr., 774 F.3d 895, 903 (6th Cir. 2014); see also 29 U.S.C.
§

211(a)

(authorizing

DOL

to

seek

injunctive

relief

under

§ 217), so it is not confined to the recovery of unpaid minimum
wages or overtime compensation in the same way.
This
scenario,

hybrid
under

enforcement
which

a

scheme

produces

provision

of

the

a
FLSA

familiar
or

its

implementing regulations may bind an employer but not subject
the employer to private civil suit.

Cf. Alden v. Maine, 527

U.S. 706, 759 (1999) (though immune from private FLSA damages
suits, the “State of Maine has not questioned Congress’ power to
prescribe

substantive

comply”).

Whether

rules

the

FLSA

of

federal

or

its

law

to

which

implementing

it

must

regulations

provide a substantive protection to employees, in other words,
13

Appeal: 14-1485

is

Doc: 67

a

Filed: 07/29/2015

separate

question

from

Pg: 14 of 21

whether

the

Act

allows

those

employees to enforce the protection through a private cause of
action.
And

on

that

latter

question

(and

only

that

latter

question), this is a perfectly straightforward case:
urges

in

Plaintiffs

its

amicus

have

no

brief,

private

and

as

cause

particular tip-related claims.

of

the

majority

action

to

As DOL

holds,

pursue

the

their

The injury that the Plaintiffs

allege — that they have been required to share their tips with
other employees in a way that does not conform to § 203(m)’s
“tip-pooling” standards — simply is not of the sort redressable
in

a

private

FLSA

lawsuit,

whether

or

not

it

represents

a

violation of the Act’s substantive protections.
Section 216(b) contains the only express private cause of
action

under

the

conceivably sound.

FLSA

in

which

the

Plaintiffs’

claims

might

But as the majority explains, the Plaintiffs

have all but conceded that their claims do not fall within that
provision.

Maj. Op. at 7. 1

And understandably so.

Under §

216(b),

1

Indeed, in light of the Plaintiffs’ failure to address or
even to cite § 216(b) in their filings before the district court
or their briefs before this court, even after that provision was
called to their attention by DOL and the Defendants, we would be
justified in deciding this case on waiver grounds alone.
See
Fed. R. App. P. 28(a)(8)(A); Brown v. Nucor Corp., 785 F.3d 895,
(Continued)
14

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 15 of 21

Any employer who violates the provisions of section
206 or section 207 of this title [addressing minimum
wage and overtime compensation] shall be liable to the
employee or employees affected in the amount of their
unpaid
minimum
wages,
or
their
unpaid
overtime
compensation, as the case may be, and in an additional
equal amount as liquidated damages.
By its terms, then, § 216(b) specifies that the only remedy it
makes available to private plaintiffs is damages “in the amount”
of

their

“unpaid

minimum

wages”

or

“unpaid

overtime

compensation,” plus an equal amount in liquidated damages.
Plaintiffs

here,

on

the

other

hand,

are

seeking

not

The

“unpaid

minimum wages” or overtime compensation, but instead allegedly
improperly withheld tips.

Indeed, they concede that they are

paid a full cash minimum wage, entirely independent of tips, 2 and
expressly

disclaim

any

connection

between

the

tip-related

practices of which they complain and the FLSA’s minimum wage
requirements.

J.A. 100.

920 (4th Cir.
waiver rules).

2015)

In those circumstances, where there

(fairness

2

concerns

guide

application

of

This does not mean that an employee lacks a private cause
of action under § 216(b) simply because his or her total
compensation from all sources meets or exceeds the minimum wage
specified in § 206.
That much is clear from our decision in
Richard v. Marriott Corp., 549 F.2d 303 (4th Cir. 1977), in
which tipped employees brought suit under § 216(b) alleging
violations of the tip-credit provisions of § 203(m).
We held
that the plaintiffs were entitled to recover under § 216(b)
despite the fact that they had received total compensation,
including tips, that met or exceeded the minimum wage rate. Id.
at 305.

15

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 16 of 21

has been no effort to tie a purported tip violation to the
Defendants’

fulfillment

of

their

minimum

wage

obligations,

there can be no private cause of action under § 216(b).
In my view, that conclusion — advanced by DOL in its amicus
brief, endorsed by the Defendants, and left unchallenged by the
Plaintiffs — effectively disposes of this case.
the

majority

generously,
argument:

suggests,

can

that

be

that

the

understood

§ 203(m)

itself

It may be, as

Plaintiffs,
advance

to

read

alternative

confers

on

an
them

not

very

only

a

substantive right to retain their tips but also a private cause
of action to enforce that right through a suit for damages.
if so, it makes no difference:

But

Any such argument is plainly

unavailing, and may be dispensed with quickly and simply under
the established principles that govern implied causes of action,
see, e.g., Venkatraman v. REI Sys., Inc., 417 F.3d 418, 423 (4th
Cir.

2005)

action),

(discussing

without

presumption

adverting

to

against
the

implied

scope

of

causes

of

substantive

protections under § 203(m).
Section 203(m) contains no express private cause of action.
As the majority recounts, Maj. Op. at 8, it appears in a list of
statutory definitions, and defines “wages” for purposes of the
FLSA while also laying out certain substantive rules regarding
employer

use

obligations.

of

employee

tips

to

offset

minimum

wage

Unlike § 216(b), it does not mention a “right of
16

Appeal: 14-1485

Doc: 67

action”

or

Filed: 07/29/2015

“damages,”

and

Pg: 17 of 21

its

text

is

bereft

of

language even alluding to a cause of action.

any

other

If there is a

cause of action somewhere in § 203(m), then it must be one that
is implied, not express.
But the Plaintiffs have not once suggested that we pursue
our standard implied cause of action analysis, and that is just
as well.

Absent “strong indicia of a contrary congressional

intent,” we are to presume that Congress “provided precisely the
remedies

it

considered

appropriate,”

Middlesex

Cnty.

Sewerage

Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 15 (1981), and to
refrain from inferring others.
causes
enacted

of
a

action

is

That presumption against implied

particularly

comprehensive

strong

legislative

where

scheme

“Congress

has

including

an

integrated system of procedures for enforcement.”

Venkatraman,

417 F.3d at 423 (quoting Nw. Airlines, Inc. v. Transp. Workers
Union of Am., AFL-CIO, 451 U.S. 77, 97 (1981)).

And here, of

course, Congress has done just that: established a carefully
reticulated dual system of enforcement, complete with an express
private

cause

of

action

limited

to

the

recovery

minimum wages” or “unpaid overtime compensation.”

of

“unpaid

When it comes

to the FLSA, we can say with confidence that “when Congress
wished to provide a private damage remedy, it knew how to do so
and did so expressly,” Touche Ross & Co. v. Redington, 442 U.S.
560, 572 (1979), and there is no ground for us to go beyond what
17

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 18 of 21

Congress has done by implying an additional and broader private
cause of action.

See Venkatraman, 417 F.3d at 423.

Whether or

not the Plaintiffs have a “right” under § 203(m), they do not
have a “remedy,” cf. Alexander v. Sandoval, 532 U.S. 275, 286
(2001) (in conducting implied cause of action analysis, courts
should

not

assume

that

every

private

right

has

a

private

remedy), and that is all that is required to dispose of this
appeal.

II.
On those grounds, I concur in the majority’s holding that
the FLSA provides no private cause of action under which the
Plaintiffs may bring their challenges to the Defendants’ tippooling

practices.

I

write

separately

only

because

I

am

concerned that in reaching this straightforward conclusion about
remedies, the majority has said more than is necessary about the
distinct
about

question

the

§ 203(m).

scope

of

substantive

of

the

rights,

protection

and

afforded

in

particular,

employees

by

See Maj. Op. at 10–11.

We always are well advised to say no more than necessary to
decide the case at hand.

But caution is particularly warranted

here, because the meaning of § 203(m), and the degree to which
it regulates employer use of tips, is now the subject of live
debate

in

the

federal

courts.
18

The

basic

question

is

this:

Appeal: 14-1485

Section

Doc: 67

Filed: 07/29/2015

203(m),

as

the

Pg: 19 of 21

majority

explains,

Maj.

Op.

at

8–9,

allows employers to use employee tips to offset a portion — but
only a specified portion, see Richard, 549 F.2d at 304 — of
their minimum wage obligations, so long as “all tips received by
[the] employee [are] retained by the employee” or shared with
other

tipped

employees

arrangement.
Defendants

as

part

of

29 U.S.C. § 203(m).

here,

who

pay

their

a

qualifying

“tip-pool”

What of employers, like the

tipped

employees

a

full

cash

minimum wage, and do not claim the “tip credit” allowed by §
203(m)?

May

they

take

the

tip

money

collected

by

their

employees and use it for their own benefit, free of § 203(m)’s
tip-pooling
argue?

rules

or

other

restrictions,

as

the

Defendants

Or, as the Plaintiffs argue, do tipped employees retain

a right to the tips they receive from customers, whether or not
they are being paid a full cash minimum wage by their employers?
A

2011

DOL

regulation

addresses

this

question

directly,

providing that “[t]ips are the property of the employee whether
or not the employer has taken a tip credit under [§ 203(m)],”
and that an “employer is prohibited from using an employee’s
tips, whether or not it has taken a tip credit, for any reason
other than that which is statutorily permitted in [§ 203(m)]: As
a credit against its minimum wage obligations to the employee,
or in furtherance of a valid tip pool.”

29 C.F.R. § 531.52.

After an extensive canvass of § 203(m)’s text and legislative
19

Appeal: 14-1485

Doc: 67

Filed: 07/29/2015

Pg: 20 of 21

history, see Updating Regulations Issued Under the Fair Labor
Standards Act, 76 Fed. Reg. 18,832, 18,838–42 (Apr. 5, 2011),
DOL

concluded

that

the

contrary

reading

of

the

statute

is

“unsupportable,” largely because it would allow for easy evasion
of the statutory cap on the percentage of an employer’s minimum
wage obligation that may be satisfied through tips:
If . . . the FLSA places limitations on an employer’s
use of its employees’ tips only in the context of a
tip credit, an employer could simply eschew the tip
credit and use a greater part of its employees’ tips
toward its minimum wage obligations than permitted
under [§ 203(m)]. . . . If an employer could avail
itself of this loophole, it would have no reason to
ever elect the tip credit because, instead of using
only a portion of its employees’ tips to fulfill its
minimum wage obligation, it could use all of its
employees’ tips to fulfill its entire minimum wage
obligation to the tipped employees or other employees.
Id. at 18,842; see also Gov’t Amicus Br. at 16.
The validity of that regulation has been put squarely at
issue in a series of federal court cases.

See, e.g., Oregon

Rest. & Lodging v. Solis, 948 F. Supp. 2d 1217, 1223-24 (D. Or.
2013)

(invalidating

the

regulation

under

Chevron)

(appeal

pending); Trinidad v. Pret A Manger (USA) Ltd., 962 F. Supp. 2d
545, 562-63 (S.D.N.Y. 2013) (following Oregon Rest. & Lodging).
And although the majority carefully clarifies that we have no
occasion to opine on the regulation today, Maj. Op. at 5 n.5, I
am concerned that some of the majority’s analysis of § 203(m)
nevertheless might be understood as bearing on whether DOL’s

20

Appeal: 14-1485

Doc: 67

regulation

is

permissible

Filed: 07/29/2015

a

reasonable

exercise

of

the

Pg: 21 of 21

interpretation
agency’s

of

§

“gap-filling”

203(m)

or

authority.

See Gov’t Amicus Br. at 15 (quoting Long Island Care at Home,
Ltd. v.

Coke, 551 U.S. 158, 165 (2007)).

That
because

would

be

substantive

particularly
discussion

unfortunate
of

§

in

203(m)

is

this

case,

not

only

unnecessary but also without the benefit of thorough advocacy.
The

Defendants

have

made

the

case

against

DOL’s

regulation,

arguing that it cannot be reconciled with the plain text of
§ 203(m), see Maj. Op. at 8 (setting out text of § 203(m)),
which unambiguously applies only when an employer claims the tip
credit.

See Br. of Appellees at 13–18.

But the Plaintiffs have

disclaimed expressly any reliance on the DOL regulation, and so
no party to this case has mounted a defense of that regulation. 3
Under those circumstances, we should take special care not to
enter,

even

a

little,

into

a

debate

that

all

agree

is

not

properly before us.

3

DOL was granted leave to file an amicus brief, in which it
argued first for dismissal of the Plaintiffs’ claims for want of
a cause of action and then defended its regulation. But because
DOL was not permitted to participate at oral argument, we have
had no opportunity to question DOL or to clarify its position.

21