Knox v. Jones Group
2016 WL 4371630
S.D. Ind.2016Background
- Plaintiffs Kimberly Knox and Kayla Bratcher are former servers/bartenders at a Buffalo Wild Wings in Avon, Indiana, who were paid the federal tip-credit wage of $2.13/hr and allege FLSA violations for being paid sub‑minimum wages for certain work.
- Plaintiffs allege substantial non‑customer, non‑tip‑producing work: as servers ~50% of time on opening/out/closing and between-customer tasks; as bartenders ~35–40% of time on similar duties.
- Claims: (1) Defendants paid tip‑credit wage while requiring performance of unrelated, non‑tipped duties; (2) Defendants credited tips despite plaintiffs spending >20% of time on related but non‑tip‑producing duties (invoking DOL Field Operations Handbook 20% rule); (3) Defendants required tip reimbursements for customer walkouts and cash shortages in violation of 29 U.S.C. § 203(m).
- Defendants moved to dismiss under Rule 12(b)(6), arguing plaintiffs failed to state claims: they contend (a) the dual‑jobs framework doesn’t support claims for ‘‘unrelated duties’’ here, (b) the DOL’s 20% Field Operations Handbook rule is not entitled to deference, and (c) reimbursement allegations are insufficiently pleaded.
- The court accepted plaintiffs’ factual allegations as true for the motion-to-dismiss posture, considered Seventh Circuit guidance (including Schaefer), and evaluated DOL deference under Auer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether performing ‘‘unrelated’’ non‑tipped duties can give rise to a dual‑jobs FLSA claim | Plaintiffs: duties were sufficiently distinct and time‑consuming to constitute a separate non‑tipped occupation requiring full minimum wage | Defendants: plaintiffs were employed in a single tipped occupation; alleged tasks are incidental and fall within permitted related duties | Denied dismissal — at pleading stage court accepts allegations that duties constituted dual occupations and states a claim |
| Whether DOL Field Operations Handbook 20% rule is entitled to deference | Plaintiffs: Handbook reasonably interprets ambiguous regulation and caps related non‑tipped duties at 20% for tip‑credit eligibility | Defendants: DOL positions are inconsistent; Handbook rule not entitled to deference and should be disregarded | Court: applies Auer deference, finds 20% threshold reasonable and denies dismissal on this ground |
| Whether allegations that employer required tip reimbursements meet Rule 8 | Plaintiffs: alleged employer paid tip‑credit wage and required employees to reimburse tips for walkouts/shortages, violating § 203(m) | Defendants: allegations lack detail (when/how often) and may be time‑barred | Court: pleading is sufficient; frequency/detail not required at pleading stage and statute‑of‑limitations is an affirmative defense |
| Procedural standard: plausibility under Twombly/Iqbal | Plaintiffs: complaint gives a coherent factual narrative sufficient to raise plausible claims | Defendants: allegations are conclusory and speculative | Court: using liberal notice pleading and accepting factual allegations, claims are plausible and survive 12(b)(6) |
Key Cases Cited
- Schaefer v. Walker Bros. Enters. Inc., 829 F.3d 551 (7th Cir. 2016) (affirming that many side duties are related to tipped work and noting deference to DOL guidance where minutes spent on unrelated duties were negligible)
- Driver v. AppleIllinois, LLC, 739 F.3d 1073 (7th Cir. 2014) (discussing distinction between related incidental duties and separate non‑tipped occupations; dicta endorsing a 20% related‑duty cap)
- Fast v. Applebee's Int'l Inc., 638 F.3d 872 (8th Cir. 2011) (upholding deference to DOL interpretation that quantifies related non‑tipped duty limits)
- Auer v. Robbins, 519 U.S. 452 (1997) (agency interpretations of ambiguous regulations are controlling unless plainly erroneous or inconsistent)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible)