13 F.4th 1166
11th Cir.2021Background
- Lindsay Rafferty worked as a Denny’s server (Feb. 2012–Oct. 2018) and performed both customer-facing (tipped) tasks and many non-tipped tasks the employer required before, during, and after shifts.
- Denny’s paid Rafferty at a tipped-employee cash rate and claimed a federal tip credit for the difference; Rafferty alleges Denny’s claimed the tip credit for hours spent on untipped work.
- Rafferty sued under the FLSA alleging (1) inadequate tip-credit notice and (2) improper use of the tip credit where she performed untipped duties unrelated to serving or performed related untipped duties in excess of permitted time.
- The district court granted Denny’s summary judgment relying in part on the DOL’s 2018 Opinion Letter (which removed any temporal limit on related duties if performed contemporaneously with customer service).
- The Eleventh Circuit: (a) rejected Auer/Skidmore deference to the 2018 Opinion Letter, (b) construed the dual-jobs regulation to bar tip credits for unrelated duties and to disallow tip credits when related untipped duties exceed a 20% workweek threshold, (c) reversed summary judgment on the dual-jobs claims (Counts Two & Three) because material factual disputes remain, and (d) affirmed summary judgment for Denny’s on the notice claim (Count One), concluding Rafferty waived a separate §516.28(a)(3) notice theory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the DOL’s 2018 Opinion Letter interpreting 29 C.F.R. §531.56(e) is entitled to Auer or Skidmore deference | The Letter is not entitled to deference; courts should follow prior DOL guidance (80/20 rule) | The Letter reflects the DOL’s authoritative interpretation and warrants deference | The 2018 Letter is not entitled to Auer or Skidmore deference (Kisor framework applied) |
| Proper interpretation of the dual-jobs regulation: scope of “related” duties and any temporal limit on them | The regulation (and long-standing DOL guidance) limits related untipped duties (20% rule); unrelated duties bar tip credit | The 2018 Letter permits unlimited related duties if contemporaneous with customer service; O*NET can define relatedness | Court adopts interpretation prohibiting tip credit for unrelated duties and applying a 20% workweek limit to related untipped duties |
| Whether summary judgment was proper on dual-jobs claims (Counts Two & Three) | Rafferty submitted testimony/declaration that she performed many unrelated tasks and spent ~30–50% of time on sidework; this creates factual disputes | Denny’s argued Rafferty could not identify particular weeks exceeding 20% and relied on 2018 Letter/summary proof | Genuine disputes of material fact exist about (a) whether tasks were unrelated and (b) whether Rafferty exceeded 20% in some workweeks — summary judgment improper for Counts Two & Three |
| Whether Denny’s failed to give required FLSA tip-credit notice (Count One) and whether Rafferty preserved a §516.28(a)(3) theory | Rafferty alleged lack of required notice and later argued Denny’s failed to provide updated written notice when tip-credit amounts changed | Denny’s produced evidence of verbal onboarding notice and Workday materials; argued plaintiff waived the written-update theory | Court affirmed summary judgment for Denny’s on §531.59(b) notice claim (no genuine dispute); Rafferty waived the §516.28(a)(3) written-update theory so district court properly declined to consider it |
Key Cases Cited
- Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (clarifies limits on Auer deference and sets three-step Auer framework)
- Auer v. Robbins, 519 U.S. 452 (1997) (agency interpretation of its own regulation may control unless plainly erroneous)
- Skidmore v. Swift & Co., 323 U.S. 134 (1944) (agency guidance receives deference proportional to its persuasiveness)
- Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) (plaintiff may prove hours by reasonable inference; employer bears records burden)
- Fast v. Applebee’s Int’l, Inc., 638 F.3d 872 (8th Cir. 2011) (endorses 20%/80-20 rule as reasonable construction of dual-jobs regulation)
- Marsh v. J. Alexander’s LLC, 905 F.3d 610 (9th Cir. 2018) (discusses DOL handbook and 20% threshold; rejects unbounded contemporaneous test)
- Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015) (summary judgment standard; view evidence in nonmovant’s favor)
- Allen v. Bd. of Pub. Educ. for Bibb County, 495 F.3d 1306 (11th Cir. 2007) (employer recordkeeping burden; plaintiff may rely on reasonable inferences)
- Seminole Rock & Sand Co. v. United States, 325 U.S. 410 (1945) (historical source of deference doctrine)
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012) (discusses limits of Auer and agency interpretation authority)