The Restaurant Law Center, joined by the Texas Restaurant Association, filed a Complaint for Declaratory and Injunctive Relief challenging an Obama-era administrative guidance on whether employers can claim a tip credit when workers do non-tipped work. We argued that the provision in question was really a regulation “slipped quietly into an internal agency handbook without notice to the public or an opportunity for comment.
Just days before the government’s response was due, the Department of Labor reissued a 2009 opinion letter. The reissued opinion letter states that there is no limit on the amount of time a tipped employee can spend on side work related to its occupation, as long as the side work occurs contemporaneously with, or in close proximity to, the normal tip-generating activity. In Court, the Department agreed to make its views apply retroactively to any pending cases or investigations. The agreement was a win for employers and tipped workers alike, helping minimize frivolous lawsuits in this area and re-focus our industry around what really matters, hospitality and service. On August 28, 2018, with nothing left to do given the change in the law invalidating the 2011 Rule, we made an Oral Motion to Dismiss before the U.S. District Court, which was granted. Case is now closed.