Lead Opinion
Affirmed by published opinion. Judge SHEDD wrote the opinion, in which Judge DUNCAN joined. Judge HARRIS wrote a separate opinion concurring in the judgment.
Mohammad Sazzad and Anthony Gomes (the Plaintiffs)
I.
The Plaintiffs work as servers for hotels and restaurants at the National Harbor complex in Prince George’s County, Maryland.
In response, the Plaintiffs filed suit against the Defendants, alleging that the tip-pooling arrangement violated the FLSA, 29 U.S.C. § 208(m), the 2009 Collective Bargaining Agreement between UNITE HERE and the Defendants, and the Maryland Wage Payment and Collection Law. Importantly, the Plaintiffs allege that the Defendants violated the FLSA by “not paying Plaintiffs all their earned tips,” (J.A. 14), and limit their requested relief to, inter alia, “the amount of tip wages” taken by the Defendants (J.A. 16). Thus, the Plaintiffs do not allege that they were paid below minimum wage; even absent tips, their base salary was above the minimum wage at all times. Further, the Plaintiffs do not allege that they were forced to work overtime without proper pay.
The district court, following a hearing, granted the Defendants’ Rule 12(b)(6) motion to dismiss. As to the FLSA count, the court held that because the Plaintiffs were paid the minimum wage, § 203(m) “does not have anything to do with this case.” (J.A. 131). The court noted that the Plaintiffs “do not want to” allege a violation of Department of Labor Regulations which extend § 203(m) to employers who are not utilizing the statute’s tip credit, (J.A. 131), but nonetheless stated that those regulations “exceeded [the Department of Labor’s] authority and ... don’t get past step 1 of the Chevron
II.
The Plaintiffs continue to press their claim that the Defendants violated the FLSA by requiring them to join the tip-pooling arrangement.
The FLSA is best understood as the “minimum wage/maximum hour law.” Monahan v. County of Chesterfield,
Here, the Plaintiffs concede that they are paid a full minimum wage absent tips. See J.A. 100 (“Section 206 talks about employer’s paying minimum wage. We never mentioned minimum wage in our complaint ... because that was not our problem”). Under direct questioning from the district court, and at oral argument before us, the Plaintiffs affirmed that they are paid the minimum wage and that the Defendants do not claim the tip credit to pay the minimum wage. Accordingly, the Plaintiffs essentially concede that they do not have a private right of action under § 216(b) because they are not seeking damages for unpaid minimum wages. See Monahan,
In determining the wage an employer is required to pay a tipped employee, the amount paid such employee by the employee’s employer shall be an amount equal to&emdash;(1) the cash wage paid such employee which for purposes of such determination shall be not less than the cash wage required to be paid such an employee on August 20,1996; and (2) an additional amount on account of the tips received by such employee which amount is equal to the difference between the wage specified in paragraph (1) and the wage in effect under section 206(a)(1) of this title.
The additional amount on account of tips may not exceed the value of the tips actually received by an employee.
The preceding 2 sentences shall not apply with respect to any tipped employee unless such employee has been informed by the employer of the provisions of this subsection, and all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.
29 U.S.C. § 203(m).
In other words, § 203(m) permits an employer, in certain circumstances, to take a credit against the minimum wage by using an employees’ tips as “wages.” An employer can thus pay tipped employees (1) a cash wage of $2.13 plus (2) an additional amount in tips that brings the total wage to the federal minimum wage. Cumbie v. Woody Woo, Inc.,
Here, the Plaintiffs argue that, because they were never informed of the FLSA’s tip-credit provision and the tip-pooling arrangement includes employees that are not regularly tipped (such as busboys), the Defendants’ tip-pooling arrangements were invalid. Accordingly, in the Plaintiffs’ view, “all tips received by” them must be “retained by” them and the Defendants must compensate them for these lost “tip” wages. Even if these words, in isolation, could somehow be read to create such a right, § 203(m) “is limited by the ‘broader context of [the FLSA] as a whole.’ ” Country Vintner of N.C., LLC v. E. & J. Gallo Winery, Inc.,
III.
Here, the Plaintiffs concede that their wages do not fall below the statutory minimum, and the “the statutory language,” of the FLSA, including § 203(m), “simply does not contemplate a claim for wages other than minimum or overtime wages.” Id. at 201-02. Accordingly, the judgment of the district court is affirmed..
AFFIRMED
Notes
. A third plaintiff, Patricio Trejo, did not file an appearance on appeal and was dismissed pursuant to Local Rule 45 for failure to prosecute.
.The facts are taken from the Plaintiffs’ complaint. Because we are reviewing the district court’s grant of a Rule 12(b)(6) motion to dismiss, we accept the allegations in the complaint as true and construe them in the light most favorable to the Plaintiffs. See Coleman v. Maryland Court of Appeals,
. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
. The Plaintiffs did not appeal the district court's dismissal of the collective bargaining or Maryland state law claims.
. After briefing concluded, the Government filed an amicus brief primarily arguing that
. The Secretary of Labor is empowered to bring an action for unpaid wages under § 216(b) and an action to restrain violations of the FLSA, 29 U.S.C. § 217.
. For instance, in Richard, we affirmed a damages award when the employer (Marriott) attempted to use the tip credit to satisfy its minimum wage obligations but failed to comply with the requirements of § 203(m).
. The Government, in its amicus brief, agrees with the conclusion that there is no viable private right of action under the FLSA in this case because the "plaintiffs are not pursuing minimum wage claims or overtime claims, but instead seek only to collect improperly withheld tips.” (Gov’t Amicus Br. at 12).
Concurrence Opinion
concurring in the judgment:
I concur in the majority’s holding that the Fair Labor Standards Act (“FLSA” or the “Act”) does not provide a private cause of action to remedy the particular violations alleged by the Plaintiffs in this case. I write separately to explain why I think we can and should reach that result without commenting on the scope of the substantive protections of § 203(m).
I.
As we decide it today, this case is not about the nature of the rights afforded by the FLSA, but about how those rights are to be enforced. The FLSA establishes two separate means of enforcement: a private right of action for aggrieved employees, and a public enforcement power wielded by the Wage and Hour Division of the Department of Labor (“DOL”). See Fair Labor Standards Act of 1938, Pub.L. No. 75-718, ch. 676, § 16-17, 52 Stat. 1060, 1069 (codified as amended at 29 U.S.C. § 216-17). Each of those mechanisms plays a distinct and critical role in the statute’s enforcement regime. See Mitchell v. Lublin, McGaughy & Assocs.,
This hybrid enforcement scheme produces a familiar scenario, under which a provision of the FLSA or its implementing regulations may bind an employer but not subject the employer to private civil suit. Cf. Alden v. Maine,
And on that latter question (and only that latter question), this is a perfectly straightforward case: As DOL urges in its amicus brief, and as the majority holds, the Plaintiffs have no private cause of action to pursue their particular tip-related claims. The injury that the Plaintiffs allege — that they have been required to share their tips with other employees in a way that does not conform to § 203(m)’s “tip-pooling” standards — simply is not of the sort redressable in a private FLSA lawsuit, whether or not it represents a violation of the Act’s substantive protections.
Section 216(b) contains the only express private cause of action under the FLSA in which the Plaintiffs’ claims might conceivably sound. But as the majority explains, the Plaintiffs have all but conceded that their claims do not fall within that provision. Maj. Op. at 446.
Any employer who violates the provisions of section 206 or section 207 of this title [addressing minimum wage and overtime compensation] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.
By its terms, then, § 216(b) specifies that the only remedy it makes available to private plaintiffs is damages “in the amount” of their “unpaid minimum wages” or “unpaid overtime compensation,” plus an equal amount in liquidated damages. The
In my view, that conclusion — advanced by DOL in its amicus brief, endorsed by the Defendants, and left unchallenged by the Plaintiffs — effectively disposes of this case. It may be, as the majority suggests, that the Plaintiffs, read very generously, can be understood to advance an alternative argument: that § 2D3(m) itself confers on them not only a substantive right to retain their tips but also a private cause of action to enforce that right through a suit for damages. But if so, it makes no difference: Any such argument is plainly unavailing, and may be dispensed with quickly and simply under the established principles that govern implied causes of action, see, e.g., Venkatraman v. REI Sys., Inc.,
Section 203(m) contains no express private cause of action. As the majority recounts, Maj. Op. at 446, it appears in a list of statutory definitions, and defines “wages” for purposes of the FLSA while also laying out certain substantive rules regarding employer use of employee tips to offset minimum wage obligations. Unlike § 216(b), it does not mention a “right of action” or “damages,” and its text is bereft of any other language even alluding to a cause of action. If there is a cause of action somewhere in § 203(m), then it must be one that is implied, not express.
But the Plaintiffs have not once suggested that we pursue our standard implied cause of action analysis, and that is just as well. Absent “strong indicia of a contrary congressional intent,” we are to presume that Congress “provided precisely the remedies it considered appropriate,” Middlesex Cnty. Sewerage Auth. v. Nat’l Sea Clammers Ass’n,
II.
On those grounds, I concur in the majority’s holding that the FLSA provides no private cause of action under which the Plaintiffs may bring their challenges to the Defendants’ tip-pooling practices. I write separately only because I am concerned that in reaching this straightforward conclusion about remedies, the majority has said more than is necessary about the distinct question of substantive rights, and in particular, about the scope of the protection afforded employees by § ,203(m). See Maj. Op. at 447-48.
We always are well advised to say no more than necessary to decide the case at hand. But caution is particularly warranted here, because the meaning of § 203(m), and the degree to which it regulates employer use of tips, is now the subject of live debate in the federal courts. The basic question is this: Section 203(m), as the majority explains, Maj. Op. at 446, allows employers to use employee tips to offset a portion — but only a specified portion, see Richard,
A 2011 DOL regulation addresses this question directly, providing that “[t]ips are the property of the employee whether or not the employer has taken a tip credit under [§ 203(m) ],” and that an “employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than that which is statutorily permitted in [§ 203(m)]: As a credit against its minimum wage obligations to the employee, or in furtherance of a valid tip pool.” 29 C.F.R. § 531.52. After an extensive canvass of § 203(m)’s text and legislative history, see Updating Regulations Issued Under the Fair Labor Standards Act, 76 Fed. Reg. 18,832, 18,838-42 (Apr. 5, 2011), DOL concluded that the contrary reading of the statute is “unsupportable,” largely because it would allow for easy evasion of the statutory cap on the percentage of an employer’s minimum wage obligation that may be satisfied through tips:
If ... the FLSA places limitations on an employer’s use of its employees’ tips only in the context of a tip credit, an employer could simply eschew the- tip credit and use a greater part of its employees’ tips toward its minimum wage obligations than permitted under [§ 203(m) ].... If an employer could avail itself of this loophole, it would have no reason to ever elect.the tip credit because, instead of using only a portion of its employees’ tips to fulfill its minimum wage obligation, it could use all of*452 its employees’ tips to fulfill its entire minimum wage obligation to the tipped employees or other employees.
Id. at 18,842; see also Gov’t Amicus Br. at 16.
The validity of that regulation has been put squarely at issue in a series of federal court cases. See, e.g., Oregon Rest. & Lodging v. Solis,
That would be particularly unfortunate in this case, because substantive discussion of § 203(m) is not only unnecessary but also without the benefit of thorough advocacy. The Defendants have made the case against DOL’s regulation, arguing that it cannot be reconciled with the plain text of § 203(m), see Maj. Op. at 446 (setting out text of § 203(m)), which' unambiguously applies only when an employer claims the tip credit. See Br. of Appellees at 13-18. But the Plaintiffs have disclaimed expressly any reliance on the DOL regulation, and so no party to this case has mounted a defense of that regulation.
. Indeed, in light of the Plaintiffs’ failure to address or even to cite § 216(b) in their filings before the district court or their briefs before this court, even after that provision was called to their attention by DOL and the Defendants, we would be justified in deciding this case on waiver grounds alone. See Fed. R.App. P. 28(a)(8)(A); Brown v. Nucor Corp.,
. This does not mean that an employee lacks a private cause of action under § 216(b) simply because his or her total compensation from all sources meets or exceeds the minimum wage specified in § 206. That much is clear from our decision in Richard v. Marriott Corp.,
. DOL was granted leave to file an amicus brief, in which it argued first for dismissal of the Plaintiffs' claims for want of a cause of action and then defended its regulation. But because DOL was not permitted to participate at oral argument, we have had no opportunity to question DOL or to clarify its position.
