The U.S. District Court for the District of Connecticut lately denied first-level conditional certification of a proposed collective movement below Section 216(b) of the Fair Labor Standards Act (FLSA). In a choice that possibly sounds the demise knell for the plaintiff worker’s allegations, the courtroom determined that the defendant agency, a steakhouse, and tavern, provided sufficient tip credit observe under the FLSA.
Under Department of Labor rules, the desired tip credit word have to inform a tipped worker all of the following:
The amount of the coins wage that is to be paid to the tipped employee by way of the organization
The extra amount by way of which the wages of the tipped worker are multiplied on account of the top credit claimed through the business enterprise
Which quantity might not exceed the cost of the hints truly obtained by using the worker
That all suggestions acquired through the tipped employee have to be retained by the worker except for a valid tip pooling association confined to employees who typically and regularly acquire guidelines
That the end credit score shall not observe to any employee who has not been knowledgeable of these necessities on this section
In McDougle v. Dakota of Rocky Hill, LLC, the plaintiff worker alleged that the corporation, Dakota, failed to provide the tip credit score word required by means of FLSA Section 203(m) and consequently was now not entitled to take the tip credit score. The worker, McDougle, specifically alleged that the organization’s orientation substances, guidelines disbursed to personnel, and posters displayed inside the restaurant did no longer satisfy the DOL regulations. McDougle moved for conditional certification of a collective action beneath FLSA Section 216(b) on behalf of all Dakota servers, however, the district court denied the motion.
Interestingly, in place of conducting a “similarly situated” inquiry, as is usual in FLSA collective action instances, the court proceeded to determine whether or not the organization had satisfied the top credit word necessities. The courtroom painstakingly examined each of the five tip credit score provisions at the problem and decided that “[e]ven while adopting a strict studying of the attention required as provided in 29 C.F.R. § 531. Fifty nine(b), Dakota’s orientation system, inner regulations, and salary posters together notified its servers of the five tip credit provisions of the DOL law.”
Based on that willpower, the court docket defined that “[b]ecause Dakota has happy the end observe requirement, the Plaintiffs’ claims fail at the deserves. Therefore, the query of whether Dakota servers are similarly situated for purposes of class certification is moot.” Thus, the court by no means tested whether or not the necessities for first-degree conditional certification were met.
There are at least two takeaways from the McDougle decision. First, while a plaintiff’s burden below Section 216(b) is lenient, employers from any enterprise defending FLSA collective movements may additionally want to don’t forget whether or not any merits-primarily based defenses are available to defeat first-stage conditional certification. Second, employers of tipped employees would do properly to revisit their tip credit score be aware to be sure that regulations and practices follow the applicable technical necessities.