Marlow v. The New Food Guy, Inc., 861 F.3d 1157

Plaintiff Bridgette Marlow worked for Relish Catering (Oct 2013–Nov 2014) and was paid a fixed wage of $12/hour ($18 overtime).
Relish collected customer gratuities at catering events but did not distribute any portion of those tips to employees.
Marlow sued under the FLSA claiming Relish’s retention of tips violated the statute and a DOL regulation that tips must be the employee’s property.
The district court granted judgment on the pleadings for defendants and denied reconsideration, implicitly rejecting the DOL regulation’s validity; Marlow appealed.
The Tenth Circuit considered whether the FLSA’s tip-credit provision or the DOL regulation forbids employers who pay above-minimum set wages from retaining customer-paid tips.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FLSA’s tip-credit provision (29 U.S.C. § 203(m)) prevents an employer who pays a set wage above the federal minimum from retaining customer-paid tips	Marlow: Even if paid $12/hr, Relish’s retention of tips can economically reduce her effective pay below the minimum; § 203(m) should bar employers from keeping tips generally	Relish: § 203(m) restricts only employers who take the tip credit; employers who pay ≥ minimum wage outright need not turn over tips	Held: § 203(m) applies only when an employer takes the tip credit; it does not restrict employers who pay a set wage above the minimum from retaining tips
Whether the DOL regulation (29 C.F.R. § 531.52) declaring tips always the employee’s property is a valid exercise of statutory authority	Marlow: The regulation is valid and requires employers to give tips to employees regardless of whether the tip credit is used	Relish: DOL exceeded its authority; Congress limited tip restrictions to employers taking the tip credit	Held: The regulation exceeds DOL authority—§ 203(m) is not ambiguous on this point and the regulation improperly fills a non-existent statutory “gap”

Williams v. Jacksonville Terminal Co., 315 U.S. 386 (employer and employee can contract about ownership of tips absent statutory interference)
Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728 (FLSA protects against substandard wages; purpose of minimum-wage provisions)
Doty v. Elias, 733 F.2d 720 (10th Cir.) (an employer using tip credit must pay the statutory cash minimum)
Cumbie v. Woody Woo, Inc., 596 F.3d 577 (9th Cir.) (§ 203(m) creates conditions for using tip credit; does not generally declare tip ownership)
Trejo v. Ryman Hosp. Props., Inc., 795 F.3d 442 (4th Cir.) (§ 203(m) rights/obligations limited to employers seeking tip credit)
Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (agencies may fill statutory ambiguities under prescribed limits)
Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (agency may fill silence on relevant factors when statute assigns a task but leaves details)
EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (statutory gaps delegating specific tasks can justify agency choices)
Cuozzo Speed Tech., LLC v. Lee, 136 S. Ct. 2131 (agency rulemaking appropriate where statute grants authority but leaves gaps)