Roberson v. Tex. Roadhouse Mgmt. Corp.
| Decision Date | 09 December 2020 |
| Docket Number | Civil Action No. 3:19-cv-628-RGJ |
| Parties | TIFFANY N. ROBERSON, Individually, and on behalf of herself and all other similarly situated current and former employees, Plaintiff v. TEXAS ROADHOUSE MANAGEMENT CORP. Defendant |
| Court | U.S. District Court — Western District of Kentucky |
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Plaintiff Tiffany Roberson ("Roberson") presents three claims, on behalf of herself and all other similarly situated current and former employees, under the Fair Labor Standards Act ("FLSA") against Defendant Texas Roadhouse Management Corp. ("TXRH"). [DE 1]. TXRH moves to dismiss Count III of Roberson's Complaint as a matter of law. [DE 53] ("Motion"). Roberson responded, [DE 54], and TXRH replied. [DE 58]. This matter is ripe. For the reasons below, the Court DENIES TXRH's Motion to Dismiss [DE 53].
TXRH employed Roberson and those similarly situated to her and paid them as "tipped employees" under the FLSA tip credit provisions. [DE 1 at 3-4]; 29 U.S.C. § 203(m)(2). Plaintiff alleges that while claiming the applicability of the tip credit provisions, TXRH "has had a common plan, policy and practice of compensating Plaintiff and those similarly situated under a tip-credit compensation plan, consisting of compensating tipped employees with only a sub-minimum wagehourly rate of pay" and supplementing this pay with the tips earned by employees during their shifts. [DE 1 at 4]. Roberson alleges that TXRH has required "Plaintiff and those similarly situated to perform unrelated (dual occupation), non-tip producing tasks while clocked-in to Defendant's timekeeping system as tipped employees at a sub-minimum 'tip credit' wage as well as to perform non-tip producing preparation and maintenance 'side work' of more than 20% of their work time while only receiving a sub-minimum wage rate of pay." [DE 1 at 5-6].
Roberson claims that TXRH "(a) failed to provide [Roberson and hourly-paid tipped employees] with FLSA tip credit notice; (b) denied them minimum wages for performing duties completely unrelated to the tipped occupation; and (c) denied them overtime for performing work duties . . . related to their tipped occupation, yet themselves non-tip producing, in excess of twenty (20) percent of their work time." [DE 54 at 428].
Only Roberson's third claim ("Count III") is at issue in this motion. Under Count III, Roberson asserts that she and those similarly situated are "entitled to compensation for unpaid minimum wages at an hourly rate required by the FLSA for all time spent performing related, non-tip producing job duties in excess of twenty (20) percent of their work time." [DE 1 at 14-15]. Such related, non-tip producing duties include "refilling sugar caddies, refilling salt and pepper shakers, filling ice bins, refilling condiments, cleaning chairs, tables, booths, restaurant artifacts and décor, lights, blinds, windows, as well as . . . vacuuming and/or sweeping dining areas, checking dishes, and napkins." [DE 1 at 7].
Federal Rule of Civil Procedure 12(b)(6) instructs that a court must dismiss a complaint if the complaint "fail[s] to state a claim upon which relief can be granted[.]" Fed. R. Civ. P. 12(b)(6). To state a claim, a complaint must contain "a short and plain statement of the claim showing thatthe pleader is entitled to relief[.]" Fed. R. Civ. P. 8(a)(2). When considering a motion to dismiss, courts must presume all factual allegations in the complaint to be true and make all reasonable inferences in favor of the non-moving party. Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008) (citation omitted). "But the district court need not accept a bare assertion of legal conclusions." Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (citation omitted). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted).
To survive a motion to dismiss, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "A complaint will be dismissed . . . if no law supports the claims made, if the facts alleged are insufficient to state a claim, or if the face of the complaint presents an insurmountable bar to relief." Southfield Educ. Ass'n v. Southfield Bd. Of Educ., 570 F. App'x 485, 487 (6th Cir. 2014) (citing Twombly, 550 U.S. at 561-64).
TXRH moves to dismiss Count III - Plaintiff's "80/20" theory of minimum wage liability - pursuant to Federal Rule of Civil Procedure 12(b)(6) as a matter of law. [DE 53]. TXRH argues that "[t]here is nothing in the FLSA itself or in the Department of Labor's ("DOL") regulations that limits the amount of time a tipped employee may spend on any particular activity within a 'tipped occupation,' nor has there ever been." [DE 53 at 244]. As a result, TXRH argues that evenassuming Roberson's allegations in Count III to be true, "she has not alleged conduct that violates the FLSA." [Id. at 245].
TXRH's Motion questions whether FLSA imposes any temporal limitation on the amount of related, untipped work that an employee may perform during their workweek while still being considered a "tipped employee." [DE 53 at 247; DE 54 at 435]. TXRH asserts that "the only basis for Plaintiff's "80/20" theory of minimum wage liability is a now-rescinded statement which previously appeared in the DOL's Field Operations Handbook" and "has recently been unambiguously rejected by the DOL." [DE 53 at 244-45]. Additionally, TXRH asserts that "the DOL recently issued a Notice of Proposed Rulemaking to formally revise its regulations to expressly confirm that there is no temporal limit on the time a tipped employee may spend performing related non-tipped duties for which the tip credit can be taken. The Court must therefore analyze the legislative and regulatory history and determine whether DOL's regulation and interpretations are entitled to Chevron deference.
In 1938, Congress enacted the FLSA to "safeguard[ ] workers from poverty by preventing employers from paying substandard wages in order to compete with one another on the market." Marsh v. J. Alexander's LLC, 905 F.3d 610, 615 (9th Cir. 2018) (en banc). In occupations that often garner payment in the form of tips, to employees, thus allowing employers to pay a sub-minimum wage out-of-pocket when supplementing it with the tips an employee earns. Id. Under the FLSA, an employee is considered a tipped employee "when, in the occupation in which he is engaged, the amounts he receives as tips customarily and regularlytotal 'more than $30 a month.'" 29 C.F.R. § 531.56(a). In certain situations, "an employee may be engaged in two occupations for the same employer but may only qualify as a 'tipped employee' in one of those occupations." Belt v. P.F. Chang's China Bistro Inc., 401 F. Supp. 3d 512, 521 (E.D. Penn. 2019) (citing 29 C.F.R. § 531.56(e)).
To address such situations, the Department of Labor ("DOL") promulgated the "dual jobs regulation," which provides that a tipped employee:
employed in a dual job, as for example, . . . a maintenance man in a hotel [that] also serves 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.
29 C.F.R. § 531.56(e). The regulation distinguishes this employee engaged in dual jobs from:
a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses[,] . . . [or a] 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 producing tips.
Id. Thus, pursuant to the dual jobs regulation, "an employer can take a tip credit (and need not pay minimum wage) for an employee who performs 'related' but non-tipped duties provided that the employee performs them only 'occasionally' or 'part of [the] time.'" Berger v. Perry's Steakhouse of Ill., 430 F. Supp. 3d 397, 410 (N.D. Ill. 2019) (citing Shaefer v. Walker Bros. Enterprises, Inc., 829 F.3d 551, 554 (7th Cir. 2016)).
Because "the dual jobs regulation does not explain" the terms "occasionally" or "part of the time," the DOL sought to clarify the regulation in its 1988 Field Operation Handbook ("1988 Handbook"). Id. The 1988 Handbook provided a temporal measurement to interpret the dual jobsregulation: it stated that Belt, 401 F. Supp. 3d at 522 (quoting U.S. Dep't of Labor, Field Operations Handbook, § 30d00(f)(1)-(4) (rev. Dec. 15, 2016)) (quotations omitted). This provision in the 1988 Handbook became known as the "20% Rule" or the "80/20...
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