Mohammad Jahir v. Ryman Hospitality Properties
795 F.3d 442
4th Cir.2015Background
- Plaintiffs (hotel/restaurant servers and union members) allege their employer required them to join a tip-pool that diverted ~4% of daily sales to non-tipped staff, and that this violated the FLSA § 203(m), their CBA, and Maryland law.
- Plaintiffs concede they received a full cash minimum wage independent of tips and do not allege unpaid minimum wages or unpaid overtime.
- District court granted defendants’ Rule 12(b)(6) motion and dismissed the FLSA claim (holding § 203(m) irrelevant where minimum wages were paid), the CBA claim (failure to exhaust), and the state-law claim (agreement that tips are not wages under Maryland law); plaintiffs appealed only the FLSA dismissal.
- Plaintiffs argued § 203(m) creates a standalone private right to recover misallocated tips when tip-pool rules are violated (e.g., inclusion of non‑regularly tipped workers, failure to notify employees).
- Government filed an amicus brief defending DOL regulations that treat tips as employee property even when no tip credit is taken; plaintiffs disclaimed reliance on the regulations and sought relief under the FLSA only.
- Fourth Circuit affirmed dismissal, holding § 203(m) does not supply a private right of action for tip-withholding claims where no minimum‑wage or overtime violation is alleged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 203(m) (tip-credit provision) creates a standalone private right to recover improperly pooled/taken tips when employer pays full minimum wage | § 203(m) requires employers to inform employees and restricts tip-pooling; violated rules mean employees must retain tips and can sue for lost tip wages | § 203(m) governs employer use of tips only when employer seeks the tip credit to satisfy minimum wage; no private remedy where minimum wage/overtime not at issue | Held: No private cause of action under § 203(m) for tip-withholding absent unpaid minimum-wage or overtime claim; dismissal affirmed |
| Whether plaintiffs can proceed under § 216(b) for tips (as unpaid wages) despite having been paid minimum wage | Plaintiffs sought tip recovery as wages allegedly withheld | Defendants (and DOL amicus): § 216(b) permits suits only for unpaid minimum wages or unpaid overtime compensation | Held: Plaintiffs conceded they received full minimum wage; § 216(b) inapplicable, so no private FLSA damages remedy |
| Whether court should defer to or decide validity of DOL regulation treating tips as employee property even when no tip credit taken | Plaintiffs disclaimed reliance on the regulation | Defendants challenged regulation’s validity; government defended it in amicus brief | Court: Declined to decide regulation validity (not before the court); outcome does not depend on regulation |
| Whether an implied private cause of action exists under § 203(m) | Plaintiffs argued statute’s wording could be read to create an independent remedy | Defendants argued no express remedy; strong presumption against implying causes where Congress provided enforcement scheme | Held: No need to imply a cause of action; Congress provided a limited private remedy scheme and implied remedy not warranted |
Key Cases Cited
- Lamie v. U.S. Tr., 540 U.S. 526 (statutory plain-meaning rule governs interpretation)
- Monahan v. County of Chesterfield, 95 F.3d 1263 (4th Cir.) (FLSA is a minimum-wage/maximum-hour law; no violation where wages meet minimum)
- Nakahata v. New York–Presbyterian Healthcare Sys., 723 F.3d 192 (2d Cir.) (FLSA remedies limited to minimum-wage and overtime claims)
- Richard v. Marriott Corp., 549 F.2d 303 (4th Cir.) (recovery where employer attempted to use tip credit improperly)
- Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 (agency gap-filling/deference framework)
- Venkatraman v. REI Sys., Inc., 417 F.3d 418 (4th Cir.) (presumption against implied causes of action)
- Middlesex Cnty. Sewerage Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1 (presumption that Congress provided appropriate remedies)
- Touche Ross & Co. v. Redington, 442 U.S. 560 (Congress provides express private remedies when intended)
- Alexander v. Sandoval, 532 U.S. 275 (implied-right/remedy analysis guidance)