Aguila v. Corporate Caterers II, Inc.
199 F. Supp. 3d 1358
S.D. Fla.2016Background
- Plaintiffs Ricardo and Teresa Aguila are delivery drivers for Corporate Caterers II (CCII) and allege CCII and individual owner Jim Gass retained some or all tips Plaintiffs received during deliveries.
- Plaintiffs sued under the Fair Labor Standards Act (FLSA) seeking unpaid tips and liquidated damages; they did not allege unpaid minimum wages or unpaid overtime.
- Defendants moved to dismiss, arguing the FLSA does not provide a private cause of action to recover retained tips where no minimum-wage or overtime violation is alleged.
- Plaintiffs rely on 29 U.S.C. § 203(m) (the tip-credit provision) and the Department of Labor regulation interpreting tips as employee property regardless of whether an employer takes a tip credit. They also cite the Ninth Circuit’s decision in Oregon Restaurant & Lodging Ass’n v. Perez.
- The court evaluated statutory text, circuit precedent (notably Cumbie) and the DOL regulation’s validity under Chevron deference, and concluded § 203(m) does not create a freestanding private right to recover tips absent a tip-credit/minimum-wage issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 203(m) (tip-credit provision) creates a freestanding private right to recover retained tips when no minimum-wage or overtime violation is alleged | § 203(m) and the DOL regulation establish that tips are employee property and thus provide a basis to sue for withheld tips | § 203(m) only governs employers who take a tip credit against minimum-wage obligations; absent a minimum-wage or overtime claim, FLSA § 216(b) does not provide a remedy for lost tips | The court held § 203(m) does not create a freestanding private right; plaintiffs’ FLSA claim fails because they did not allege unpaid minimum wages or overtime |
| Whether the DOL regulation (29 C.F.R. § 531.52) is entitled to Chevron deference to impose an independent prohibition on tip retention | The DOL regulation validly interprets § 203(m) and supports plaintiffs’ tip-retention claim | The court contends the statute’s plain text covers only the tip-credit context and thus the regulation improperly fills a statutory ‘‘gap’’ that does not exist | The court refused to follow the Ninth Circuit’s Perez reasoning, finding no statutory ambiguity that justifies Chevron deference for the DOL regulation in this context |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility at dismissal stage)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must state a plausible claim)
- Cumbie v. Woody Woo, Inc., 596 F.3d 577 (9th Cir. 2010) (§ 203(m) does not apply where employer pays the minimum wage)
- Trejo v. Flyman Hosp. Props., Inc., 795 F.3d 442 (4th Cir. 2015) (§ 203(m) rights arise only when employer uses tips to satisfy minimum-wage obligations)
- Oregon Rest. & Lodging Ass’n v. Perez, 816 F.3d 1080 (9th Cir. 2016) (upholding DOL regulation under Chevron; court declined to follow this reasoning)
- Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (1942) (FLSA’s purpose: protect workers from excessive hours and substandard wages)