Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-15243/USCOURTS-ca9-14-15243-0/pdf.json

Parties Involved:
Joseph Cesarz
Appellant
Andrew Pascal
Appellee
Quy Ngoc Tang
Appellant
Steve Wynn
Appellee
Wynn Las Vegas, LLC
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OREGON RESTAURANT AND

LODGING ASSOCIATION, a non-profit

Oregon corporation; WASHINGTON

RESTAURANT ASSOCIATION, a nonprofit Washington corporation;

ALASKA CABARET, HOTEL,

RESTAURANT & RETAILERS

ASSOCIATION, a non-profit Alaska

corporation; NATIONAL

RESTAURANT ASSOCIATION, a nonprofit Illinois corporation; DAVIS

STREET TAVERN LLC, an Oregon

limited liability company; SUSAN

PONTON, an individual,

Plaintiffs-Appellees,

v.

THOMAS PEREZ, in his official

capacity as Secretary of the U.S.

Department of Labor; LAURA

FORTMAN, in her official capacity as

Deputy Administrator of the U.S.

Department of Labor; U.S.

DEPARTMENT OF LABOR,

Defendants-Appellants.

No. 13-35765

D.C. No.

3:12-cv-01261-

MO

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2 OREGON REST. & LODGING ASS’N V. PEREZ

Appeal from the United States District Court

for the District of Oregon

Michael W. Mosman, District Judge, Presiding

JOSEPH CESARZ; QUY NGOC TANG,

individually and on behalf of all

others similarly situated, and all

persons whose names are set forth in

Exhibit A to the First Amended

Complaint,

Plaintiffs-Appellants,

v.

WYNN LAS VEGAS, LLC; ANDREW

PASCAL; STEVE WYNN,

Defendants-Appellees.

No. 14-15243

D.C. No.

2:13-cv-00109-

RCJ-CWH

OPINION

Appeal from the United States District Court

for the District of Nevada

Robert Clive Jones, District Judge, Presiding

Argued and Submitted

July 10, 2015—Portland, Oregon*

Filed February 23, 2016

* We heard oral argument in these two cases together, and we now

consolidate them for disposition. See Fed. R. App. P. 3(b)(2); Mattos v.

Agarano, 661 F.3d 433, 436 n.1 (9th Cir. 2011) (en banc).

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OREGON REST. & LODGING ASS’N V. PEREZ 3

Before: Harry Pregerson, N. Randy Smith,

and John B. Owens, Circuit Judges.

Opinion by Judge Pregerson;

Dissent by Judge N.R. Smith

SUMMARY**

Fair Labor Standards Act

The panel reversed the district courts’ decisions in favor

of employers, and held that Cumbie v. Woody Woo, Inc.,

596 F.3d 577 (9th Cir. 2010), did not foreclose the

Department of Labor’s ability to promulgate subsequently a

formal rule that extended the tip pooling restrictions of

Section 203(m) of the Fair Labor Standards Act of 1938

(“FLSA”); and remanded for further proceedings.

Under 29 U.S.C. § 203(m), an employer may fulfill part

of its hourly minimum wage obligation to a tipped employee

with the employee’s tips by taking a tip credit; and the tip

pool is valid if it is comprised exclusively of employees who

are “customarily and regularly” tipped. In 2010, in Cumbie,

the court held that a tip pooling arrangement comprised of

both customarily tipped employees and non-customarily

tipped employees did not violate section 203(m) of the FLSA

because section 203(m) was silent as to employers who do

not take a tip credit. In 2011, the Department of Labor

promulgated a formal rule that extended the tip pool

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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4 OREGON REST. & LODGING ASS’N V. PEREZ

restrictions of section 203(m) to all employers, not just to

those who take a tip credit. 76 Fed. Reg. 18,832, 18,841–42

(April 5, 2011).

The district courts in these cases held that Cumbie

foreclosed the Department of Labor’s ability to promulgate

the 2011 rule and that the 2011 rule was invalid because it

was contrary to Congress’s clear intent.

The panel held that the Department of Labor may regulate

the tip pooling practices of employers who do not take a tip

credit. The panel disagreed with the district courts’

applications of Cumbie and their analyses under Chevron,

U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837

(1984). The panel held that FLSA section 203(m)’s clear

silence as to employers who do not take a tip credit left room

for the Department of Labor to promulgate the 2011 rule. The

panel concluded that step one of the Chevron analysis was

satisfied. At Chevron step two, the panel concluded that the

Department of Labor’s interpretation in the 2011 rule was

reasonable. The panel held that the Department of Labor’s

regulation withstood Chevron review.

Judge N.R. Smith dissented because he would hold that

the cases are controlled by the holding in Cumbie, and he

would affirm the district courts.

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OREGON REST. & LODGING ASS’N V. PEREZ 5

COUNSEL

John S. Koppel (argued) and Michael Jay Singer, Attorneys,

United States Department of Justice, Civil Division,

Washington, D.C.; Stuart F. Delery, Assistant Attorney

General, Office of the Attorney General, Washington, D.C.;

S. Amanda Marshall, United States Attorney, United States

Attorneys’ Office, Oregon, for Defendants-Appellants

Thomas Perez, et al.

Joshua D. Buck (argued), Thierman Buck, Reno, Nevada;

Leon Greenberg and Dana Sniegocki, Leon Greenberg

Professional Corporation, Las Vegas, Nevada, for PlaintiffsAppellants Joseph Cesarz and Quy Ngoc Tang.

Paul DeCamp (argued), Jackson Lewis P.C., Reston,

Virginia; Nicholas M. Beerman, Peter H. Nohle, and William

Robert Donovan, Jr., Jackson Lewis P.C., Seattle,

Washington; Scott Oberg Oborn, Jackson Lewis P.C.,

Portland, Oregon, for Plaintiffs-AppelleesOregon Restaurant

and Lodging Association, et al.

Eugene Scalia (argued) and Alexander Cox, Gibson Dunn &

Crutcher LLP, Washington, D.C.; Gregory J. Kramer and

Brian J. Cohen, Kramer Zucker Abbott, Las Vegas, Nevada,

for Defendants-Appellees Wynn Las Vegas, LLC, et al.

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6 OREGON REST. & LODGING ASS’N V. PEREZ

OPINION

PREGERSON, Senior Circuit Judge:

Under the Fair Labor Standards Act of 1938 (“FLSA”), as

amended in 1974, an employer may fulfill part of its hourly

minimum wage obligation to a tipped employee with the

employee’s tips. 29 U.S.C. § 203(m). This practice is known

as taking a “tip credit.” Section 203(m) of the FLSA

obligates employers who take a tip credit to (1) give notice to

its employees, and (2) allow its employees to retain all the

tips they receive, unless such employees participate in a valid

tip pool. Id. Under section 203(m), a tip pool is valid if it is

comprised exclusively of employees who are “customarily

and regularly” tipped. Id.

In both cases before this court, Employer-Appellees did

not take a tip credit against their minimum wage obligation;

they paid their tipped employees at least the federal minimum

wage. Employer-Appellees required their employees to

participate in tip pools. Unlike the tip pools contemplated by

section 203(m), however, these tip pools were comprised of

both customarily tipped employees and non-customarily

tipped employees.

In 2010, we held in Cumbie v. Woody Woo, Inc. that this

type of tip pooling arrangement does not violate section

203(m) of the FLSA, because section 203(m) was silent as to

employers who do not take a tip credit. 596 F.3d 577, 583

(9th Cir. 2010). In 2011, shortly after Cumbie was decided,

the Department of Labor (“DOL”) promulgated a formal rule

(“the 2011 rule”) that extended the tip pool restrictions of

section 203(m) to all employers, not just those who take a tip

credit. 76 Fed. Reg. 18,832, 18,841–42 (April 5, 2011).

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OREGON REST. & LODGING ASS’N V. PEREZ 7

The United States District Court for the District of

Oregon held that Cumbie foreclosed the DOL’s ability to

promulgate the 2011 rule and that the 2011 rule was invalid

because it was contrary to Congress’s clear intent. Or. Rest.

&Lodging v. Solis, 948 F. Supp. 2d 1217, 1218, 1226 (D. Or.

2013). The United States District Court for the District of

Nevada followed suit. Cesarz v. Wynn Las Vegas, LLC, No.

2:13-cv-00109-RCJ-CWH, 2014 WL 117579, at *3 (D. Nev.

Jan. 10, 2014). For the reasons set forth below, we reverse

both district court decisions.

Background

In 1937, President Franklin Delano Roosevelt challenged

Congress “to devise ways and means of insuring to all our

able-bodied working men and women a fair day’s pay for a

fair day’s work. A self-supporting and self-respecting

democracy can plead no justification for . . . chiseling

workers’ wages . . . .” H.R. Rep. No. 93-913 at 5–6 (1974). 

One year later, in 1938, Congress passed the FLSA. 

29 U.S.C. § 201. “[T]he FLSA was designed to give specific

minimum protections to individual workers and to ensure that

each employee covered by the Act . . . would be protected

from the ‘evil of overwork as well as underpay.’” Barrentine

v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)

(quoting Overnight Motor Transp. Co. v. Missel, 316 U.S.

572, 578 (1942)) (internal quotation marks omitted). The

FLSA was intended to provide “greater dignity and security

and economic freedom for millions of American workers.” 

H.R. Rep. No. 93-913 at 6 (1974) (quoting President

Kennedy).

In 1942, the Supreme Court in Williams v. Jacksonville

Terminal Co. addressed the question whether tips are a

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8 OREGON REST. & LODGING ASS’N V. PEREZ

component of an employee’s wages under the FLSA. 

315 U.S. 386, 388 (1942). The petitioners, who worked as

“red caps” or baggage handlers, earned a combination of

wages and tips that equaled the FLSA prescribed minimum

wage. Id. They sued their employer, arguing that the FLSA

required that they be paid the minimum wage without regard

to their earnings from tips. Id. at 389. The Court held that

“where tipping is customary, the tips, in the absence of an

explicit contrary understanding, belong to the recipient.” Id.

at 397. However, when “an arrangement is made by which

the employee agrees to turn over the tips to the employer, in

the absence of statutory interference, no reason is perceived

for its invalidity.” Id. Because the baggage handlers

continued to work after being notified that tips would

constitute part of their wages, the Court held that they

accepted this new compensation arrangement. Id. at 398.

After Jacksonville Terminal, the FLSAunderwent a series

of amendments, which “extended the Act’s coverage.” H.R.

Rep. 93-913 at 4. These amendments raised the federal

minimum wage and expanded the FLSA’s coverage to

various public and private sector employees. In 1966, the

FLSA was amended to include hotel and restaurant

employees. 73 Fed. Reg. 43,654, 43,659 (July 28, 2008). To

alleviate the new minimum wage obligations of hotels and

restaurants, “the 1966 amendments also provided for the first

time, within section [20]3(m)’s definition of a ‘wage,’ that an

employer could utilize a limited amount of its employees’ tips

as a credit against its minimum wage obligations . . . through

a so-called ‘tip credit.’” 76 Fed. Reg. at 18,838.

In 1974, the FLSA was again amended. First, Congress

expressly delegated to the DOL the broad authority “to

prescribe necessary rules, regulations, and orders” to

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OREGON REST. & LODGING ASS’N V. PEREZ 9

implement the FLSA amendments of 1974. Pub. L. No. 93-

259, § 29(b), 88 Stat. 55 (1974). Second, Congress revised

the language in 29 U.S.C. § 203(m) to read:

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—

(1) the cash wage paid such employee which

for purposes of such determination shall not

be 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.1

1

In other words, under section 203(m) there are two components of the

employer’s wage obligation to tipped employees: the employer’s cash

wage obligation to the employee and the employee’s tips. The

combination of the employer’s cash wage and the employee’s tips must

equal at least the federal minimum wage. Currently, the employer’s

minimum cash wage obligation to the employee is $2.13 per hour and the

federal minimum wage is $7.25 per hour.

If the employee earns at least $5.12 per hour in tips, then the

employer has no further cash wage obligation because the employer’s

minimum wage obligation of $2.13 plus the employee’s tips of at least

$5.12 equals the minimum wage. In this example, the employer would be

taking a tip credit of $5.12 per hour.

If the employee earns less than $5.12 per hour in tips, the employer

would be responsible for making up the difference between the tip credit

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10 OREGON REST. & LODGING ASS’N V. PEREZ

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 customarilyand

regularly receive tips.

29 U.S.C. § 203(m). As amended in 1974, section 203(m)

required employers to give their employees prior notice of

their intent to use a tip credit and “made it clear that tipped

employees must receive at least minimum wage and must

generally retain any tips.” 73 Fed. Reg. at 43,659.

In 2010, we held in Cumbie v. Woody Woo, Inc. that

section 203(m) does not restrict the tip pooling practices of

employers who do not take tip credits. 596 F.3d at 583. The

employer, WoodyWoo, Inc., paid its servers a cash wage that

exceeded the federal minimum wage but required its servers

to contribute their tips to a “tip pool” that included employees

who were not regularly or customarily tipped. Id. at 578–79. 

The servers claimed that Woody Woo’s tip pooling practice

violated section 203(m) because the practice included noncustomarily tipped employees. Id. at 579. We applied the

“default” rule from Jacksonville Terminal, and found that “in

and the minimum wage. For example, if an employee receives $1.00 per

hour in tips, the employer would be required to pay $6.25 per hour. In this

example, the employer would be taking a tip credit of $1.00 per hour.

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OREGON REST. & LODGING ASS’N V. PEREZ 11

the absence of statutory interference, no reason is perceived

for [Woody Woo’s tip pooling practice’s] invalidity.” Id.

(quoting Jacksonville Terminal, 315 U.S. at 397) (emphasis

and internal quotation marks omitted).

In Cumbie, we read section 203(m) to apply only to

employers who did take a tip credit; for these employers,

section 203(m) is considered “statutory interference.” 

596 F.3d at 581. In contrast, for an employer that meets its

minimum wage obligation without taking a tip credit, section

203(m) is silent; therefore, there is no statutory interference. 

Without statutory interference, Jacksonville Terminal’s

default rule controlled, and we concluded that Woody Woo’s

tip pooling practice was valid. Id. at 583.

In 2008, two years before the Cumbie decision, the DOL

published a notice of proposed rulemaking and request for

comments under the Administrative Procedure Act, 5 U.S.C.

§§ 556–557. The lengthy notice set forth specific revisions

to sections that governed tipped employees in order “to

incorporate . . . legislative history, subsequent court

decisions, and the [DOL’s] interpretations” into the FLSA. 

73 Fed. Reg. at 43,659. More than ten different organizations

submitted comments. These comments and the Cumbie

decision disclosed that section 203(m)’s tip pooling

restrictions could be read to apply only to employers who take

a tip credit. The comments also revealed that section 203(m)

could encourage abuse in an already “high-violation

industry.” See 76 Fed. Reg. at 18,840–42.

In 2011, in response to these comments and the statutory

silence that Cumbie exposed, the DOLpromulgated new rules

to make it clear that tips are the property of the employee. Id.

at 18,841–42; 29 C.F.R. §§ 531.52, 531.55, 531.59. 

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12 OREGON REST. & LODGING ASS’N V. PEREZ

Specifically, the DOL revised 29 C.F.R. § 531.52 by

replacing the sentence:

In the absence of an agreement to the contrary

between the recipient and a third party, a tip

becomes the property of the person in

recognition of whose service it is presented by

the customer.

with the following language:

Tips are the property of the employee whether

or not the employer has taken a tip credit

under section [20]3(m) of the FLSA. The

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 section [20]3(m):

As a credit against its minimum wage

obligations to the employee, or in furtherance

of a valid tip pool.

Compare 32 Fed. Reg. 13,575, 13,580 (Sept. 28, 1967), with

29 C.F.R. § 531.52 (2011). The 2011 rule expressly prohibits

the use of a tip pool that violates section 203(m) regardless of

whether an employer uses a tip credit.

These revisions to 29 C.F.R. § 531.52 are the subject of

the two cases before us. The Oregon Restaurant and Lodging

Association, consisting of restaurants, taverns, and one

individual, brought suit against the DOL, challenging the

validity of the 2011 rule and seeking to enjoin its

enforcement. Later, a group of casino dealers brought suit

against their employer, Wynn Las Vegas, LLC, challenging

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OREGON REST. & LODGING ASS’N V. PEREZ 13

Wynn’s tip pooling practice as violating the 2011 rule. In

both cases, the employers paid the employees at least the

federal minimum wage and did not take a tip credit. The

employers also instituted tip pools, in which customarily

tipped employees, i.e., servers and casino dealers, were

required to share tips with non-customarily tipped employees,

i.e., kitchen staff and casino floor supervisors. Both district

courts sided with the employers, relying in large part on our

holding in Cumbie.

2 The DOL and the casino dealers

appealed.

Discussion

I. Standard of Review

We review a district court’s grant of summary judgment

de novo. Los Coyotes Band of Cahuilla & Cupeño Indians v.

Jewell, 729 F.3d 1025, 1035 (9th Cir. 2013). We also review

a district court’s grant of a motion to dismiss de novo. Fayer

v. Vaughn, 649 F.3d 1061, 1063–64 (9th Cir. 2011).

We review the validity of an agency’s regulatory

interpretation of a statute under the two-step framework set

forth in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,

467 U.S. 837 (1984).

3 The first step is to ask, “has

2

In Oregon, the district court granted summary judgment in favor of the

OregonRestaurant and Lodging Association. In Nevada, the district court

granted Wynn’s motion to dismiss under 12(b)(6) for failure to state a

claim.

3 At Chevron step zero, we ask whether the Chevron framework applies

at all. An “administrative implementation of a particular statutory

provision qualifies for Chevron deference when it appears that Congress

delegated authority to the agency generally to make rules carrying the

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14 OREGON REST. & LODGING ASS’N V. PEREZ

[Congress] directly spoken to the precise question at issue.” 

Id. at 842. If Congress’s intent is clear, then that is the end of

our inquiry. Id. at 842–43. If, however, “the statute is silent

or ambiguous with respect to the specific issue,” we proceed

to step two and ask if the agency’s action is “based on a

permissible construction of the statute.” Id. at 843. Even if

we believe the agency’s construction is not the best

construction, it is entitled to “controlling weight unless [it is]

arbitrary, capricious, or manifestly contrary to the statute.” 

Id. at 844; see also Nat’l Cable &Telecomms. Ass’n v. Brand

X Internet Servs.(“Brand X”), 545 U.S. 967, 980 (2005).

II. Analysis

When the Oregon district court and the Nevada district

court conducted their Chevron analysis, both held that

Cumbie left “no room” for the DOL to promulgate its 2011

rule and thus granted Oregon Restaurant & Lodging’s motion

for summary judgment, Or. Rest. &Lodging, 948 F. Supp. 2d

at 1226, and Wynn’s motion to dismiss, Cesarz, 2014 WL

117579, at *3. We disagree with the district courts’

applications of Cumbie and their Chevron analyses.

force of law, and that the agency interpretation claiming deference was

promulgated in the exercise of that authority.” United States v. Mead

Corp., 533 U.S. 218, 226–27 (2001). In 1974, Congress granted the

Secretary ofLabor the authority to “prescribe necessary rules, regulations,

and orders with regard to the [1974] amendments” to the FLSA, which

included section 203(m). Pub. L. No. 93-259, § 29(b), 88 Stat. 55, 76. 

The DOL exercised its rulemaking authority within its substantive field

when it promulgated the 2011 rule. This is sufficient to satisfy the

Chevron step zero inquiry. See City of Arlington v. FCC, 133 S. Ct. 1863,

1874 (2013).

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OREGON REST. & LODGING ASS’N V. PEREZ 15

A. Chevron Step One

The precise question before this court is whether the DOL

may regulate the tip pooling practices of employers who do

not take a tip credit. The restaurants and casinos argue that

we answered this question in Cumbie. We did not.

Our task in Cumbie was to decide whether a restaurant’s

tip pooling practice violated the FLSA. 596 F.3d at 578. We

did not hold that the FLSA unambiguously and categorically

protects the practice in question. Rather, we held that

“nothing in the text purports to restrict” the practice in

question. Id. at 583. In reaching this holding, we relied on

Christensen, in which the “Supreme Court . . . made clear that

an employment practice does not violate the FLSA unless the

FLSA prohibits it.” Id. (citingChristensen v. Harris Cty, 529

U.S. 576, 588 (2000)). Christensen illustrates the crucial

distinction between statutory language that affirmatively

protects or prohibits a practice and statutory language that is

silent about that practice.

In Christensen, the plaintiffs-employees worked a

substantial amount of unpaid overtime for their employer,

Harris County, for which the employees accumulated

“compensatory time” in lieu of cash compensation at a rate of

one and a half hours for every hour of overtime worked. 

529 U.S. at 579–80. The FLSA expressly authorized the use

of the compensatory time but also set a statutory cap on the

amount of compensatory time an employee could accrue,

after which the employer would be required to pay monetary

compensation for every additional hour of overtime worked. 

Id. To avoid having to pay large sums of monetary overtime

compensation, Harris County enacted a policy whereby it

could force its employees to use their compensatory time so

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that they would not reach the statutory cap. Id. at 580–81. 

The employees sued and argued that Harris County’s policy

violated a provision of the FLSA that required employers to

reasonably accommodate employee requests to use

compensatory time. Id. at 581 (citing 29 U.S.C. § 207(o)(5)).

The Supreme Court rejected the employees’ argument

because “no relevant statutory provision expressly or

implicitly prohibits” the employer’s policy. Id. at 588. As

we held in Cumbie, the Court in Christensen held that the

employer’s policy did not violate the FLSA because nothing

in the FLSA prohibited the employer’s policy. Id. at 585–86. 

The Court reasoned that “[b]ecause the statute is silent on this

issue and because Harris County’s policy is entirely

compatible with [the statute],” there was no violation. Id. at

585 (emphasis added). Thus, just as we did in Cumbie, the

Court in Christensen construed the FLSA’s silence in favor

of the employer.

But, critically, the Court in Christensen did not preclude

the DOL from enacting future regulations that prohibited the

challenged policy. Indeed, the Court suggested that were the

agency to enact future regulations, Chevron deference would

apply. See id. at 586–87. The Court noted that “[o]f course,

the framework of deference set forth in Chevron does apply

to an agency interpretation contained in a regulation. But in

this case the Department of Labor’s regulation does not

address the issue of compelled compensatory time.” Id. at

587. The Court also acknowledged that the DOL had issued

an opinion letter on the subject, but noted that an

interpretation in an opinion letter is not entitled to Chevron

deference because it is “not one arrived at after, for example,

a formal adjudication or notice-and-comment rulemaking.” 

Id. Five Justices joined this portion of the Court’s opinion,

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OREGON REST. & LODGING ASS’N V. PEREZ 17

including Justice Souter, who filed a single-sentence

concurrence:

I join the opinion of the Court on the

assumption that it does not foreclose a reading

of the Fair Labor Standards Act of 1938 that

allows the Secretary of Labor to issue

regulations limiting forced use.

Id. at 589 (Souter, J., concurring). The Court’s comments

regarding Chevron deference, along with Justice Souter’s

concurrence, suggest that the DOL, by regulation, could

prohibit the very practice the Court held to be neither

explicitly nor implicitly prohibited by the FLSA. Following

that reasoning, Cumbie should not be read to foreclose the

DOL’s ability to subsequently issue a regulation prohibiting

the challenged tip pooling practice.

Here, the Oregon district court, the Nevada district court,

the parties, and the dissent overlook the part of Christensen

that discussed Chevron deference and Judge Souter’s

concurrence. Instead, the district courts, the parties, and the

dissent focus their attention on the rule from Brand X.

In Brand X, the Supreme Court held that “[a] court’s prior

judicial construction of a statute trumps an agency

construction otherwise entitled to Chevron deference only if

the prior court decision holds that its construction follows

from the unambiguous terms of the statute and thus leaves no

room for agency discretion.” 545 U.S. at 982. Relying on

Brand X, the restaurants and casinos argued that Cumbie

trumps the 2011 rule because Cumbie relied on the “clear”

language of the FLSA. The district courts adopted this

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18 OREGON REST. & LODGING ASS’N V. PEREZ

position. Or. Rest. & Lodging, 948 F. Supp. 2d at 1223;

Cesarz, 2014 WL 117579 at *3.

But as Christensen strongly suggests, there is a distinction

between court decisions that interpret statutory commands

and court decisions that interpret statutory silence. Moreover,

Chevron itself distinguishes between statutes that directly

address the precise question at issue and those for which the

statute is “silent.” Chevron, 467 U.S. at 843. As such, if a

court holds that a statute unambiguously protects or prohibits

certain conduct, the court “leaves no room for agency

discretion” under Brand X, 545 U.S. at 982. However, if a

court holds that a statute does not prohibit conduct because it

is silent, the court’s ruling leaves room for agency discretion

under Christensen.

Cumbie falls precisely into the latter category of

cases—cases grounded in statutory silence. When we

decided Cumbie, the DOL had not yet promulgated the 2011

rule. Thus, there was no occasion to conduct a Chevron

analysis in Cumbie because there was no agency

interpretation to analyze.4 The Cumbie analysis was limited

4

In Cumbie, after citing Jacksonville Terminal for the “background

principle” that an arrangement to turn over or redistribute tips is valid “in

the absence of statutory interference,” we noted that we “need not decide

whether” the DOL’s over forty-year-old regulations governing tips “are

still valid and what level of deference they merit” “because we conclude

that the meaning of the FLSA’s tip credit provision is clear.” 596 F.3d at

579 & n.6. However, the DOL regulations at the time did not specifically

address the issue of employers who require tip pooling and do not take a

tip credit. See 32 Fed. Reg. at 13,580; see also Christensen, 529 U.S. at

587. Moreover, contrary to the dissent’s assertion, our characterization in

Cumbie of the FLSA’s tip credit provision as “clear” does not necessarily

foreclose agency discretion. What was “clear” in Cumbie was that the

FLSA’s tip credit provision did not impose any “statutory interference”

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OREGON REST. & LODGING ASS’N V. PEREZ 19

to the text of section 203(m). After a careful reading of

section 203(m) in Cumbie, we found that “nothing in the text

of the FLSA purports to restrict employee tip-pooling

arrangements when no tip credit is taken” and therefore there

was “no statutory impediment” to the practice. 596 F.3d at

583. Applying the reasoning in Christensen, we conclude

that section 203(m)’s clear silence as to employers who do

not take a tip credit has left room for the DOL to promulgate

the 2011 rule. Whereas the restaurants, casinos, and the

district courts equate this silence concerning employers who

do not take a tip credit to “repudiation” of future regulation

of such employers, we decline to make that great leap without

more persuasive evidence. See United States v. Home

Concrete & Supply, LLC, 132 S. Ct 1836, 1843 (2012) ( “[A]

statute’s silence or ambiguity as to a particular issue means

that Congress has . . . likely delegat[ed] gap-filling power to

the agency[.]”); Entergy Corp. v. Riverkeeper, Inc., 556 U.S.

208, 222 (2009) (“[S]ilence is meant to convey nothing more

than a refusal to tie the agency’s hands . . . .”); S.J. Amoroso

Constr. Co. v. United States, 981 F.2d 1073, 1075 (9th Cir.

1992) (“Without language in the statute so precluding [the

agency’s challenged interpretation], it must be said that

Congress has not spoken to the issue.”).

In sum, we conclude that step one of the Chevron analysis

is satisfied because the FLSA is silent regarding the tip

pooling practices of employers who do not take a tip credit. 

Our decision in Cumbie did not hold otherwise.

that would invalidate tip pooling when no tip credit is taken – i.e., that the

FLSA was silent regarding this practice.

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20 OREGON REST. & LODGING ASS’N V. PEREZ

B. Chevron Step Two

Having found that the statute is silent as to the precise

question at issue, we continue to step two. At Chevron step

two, we must determine if the DOL’s interpretation is

reasonable. Chevron, 467 U.S. at 843–44. This is a generous

standard, requiring deference “even if the agency’s reading

differs from what the court believes is the best statutory

interpretation.” Brand X, 545 U.S. at 980. We may reject an

agency’s construction only if it is arbitrary, capricious, or

manifestly contrary to the statute. Chevron, 467 U.S. at 844. 

To determine whether the DOL’s interpretation is reasonable,

“we look to the plain and sensible meaning of the statute, the

statutory provision in the context of the whole statute and

case law, and to the legislative purpose and intent.” Nat. Res.

Def. Council v. U.S. Envtl. Prot. Agency, 526 F.3d 591, 605

(9th Cir. 2008) (citation omitted).

The DOL promulgated the 2011 rule after taking into

consideration numerous comments and our holding in

Cumbie. The AFL-CIO, National Employment Lawyers

Association, and the Chamber of Commerce all commented

that section 203(m) was either “confusing” or “misleading”

with respect to the ownership of tips. 76 Fed. Reg. at

18840–41. The DOL also considered our reading of section

203(m) in Cumbie and concluded that, as written, 203(m)

contained a “loophole” that allowed employers to exploit the

FLSA tipping provisions. Id. at 18841. It was certainly

reasonable to conclude that clarification by the DOL was

needed. The DOL’s clarification—the 2011 rule—was a

reasonable response to these comments and relevant case law.

The legislative history of the FLSA supports the DOL’s

interpretation of section 203(m) of the FLSA. An

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OREGON REST. & LODGING ASS’N V. PEREZ 21

“authoritative source for finding the Legislature’s intent lies

in the Committee Reports on the bill, which represent the

considered and collective understanding of those

Congressmen [and women] involved in drafting and studying

proposed legislation.” Garcia v. United States, 469 U.S. 70,

76 (1984) (citation and internal quotation marks omitted). On

February 21, 1974, the Senate Committee published its views

on the 1974 amendments to section 203(m). S. Rep. No. 93-

690 (1974).

Employer-Appellees argue that the report reveals an

intent contrary to the DOL’s interpretation because the report

states that an “employer will lose the benefit of [the tip credit]

exception if tipped employees are required to share their tips

with employees who do not customarily and regularly receive

tips[.]” In other words, Appellees contend that Congress

viewed the ability to take a tip credit as a benefit that came

with conditions and should an employer fail to meet these

conditions, such employer would be ineligible to reap the

benefits of taking a tip credit. While this is a fair

interpretation of the statute, it is a leap too far to conclude

that Congress clearly intended to deprive the DOL the ability

to later apply similar conditions on employers who do not

take a tip credit.

Moreover, the surrounding text in the Senate Committee

report supports the DOL’s reading of section 203(m). The

Committee reported that the 1974 amendment “modifies

section [20]3(m) of the Fair Labor Standards Act by requiring

. . . that all tips received be paid out to tipped employees.” S.

Rep. No. 93-690, at 42. This language supports the DOL’s

statutory construction that “[t]ips are the property of the

employee whether or not the employer has taken a tip credit.” 

29 C.F.R. § 531.52. In the same report, the Committee wrote

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22 OREGON REST. & LODGING ASS’N V. PEREZ

that “tipped employee[s] should have stronger protection,”

and reiterated that a “tip is . . . distinguished from payment of

a charge . . . [and the customer] has the right to determine

who shall be the recipient of the gratuity.” S. Rep. No. 93-

690, at 42.

In 1977, the Committee again reported that “[t]ips are not

wages, and under the 1974 amendments tips must be retained

by the employees . . . and cannot be paid to the employer or

otherwise used by the employer to offset his wage obligation,

except to the extent permitted by section [20]3(m).” S. Rep.

No. 95-440 at 368 (1977) (emphasis added). The use of the

word “or” supports the DOL’s interpretation of the FLSA

because it implies that the only acceptable use by an

employer of employee tips is a tip credit.

Additionally, we find that the purpose of the FLSA does

not support the view that Congress clearly intended to

permanently allow employers that do not take a tip credit to

do whatever they wish with their employees’ tips. The

district courts’ reading that the FLSA provides “specific

statutory protections” related only to “substandard wages and

oppressive working hours” is too narrow. As previously

noted, the FLSA is a broad and remedial act that Congress

has frequently expanded and extended.

Considering the statements in the relevant legislative

history and the purpose and structure of the FLSA, we find

that the DOL’s interpretation is more closely aligned with

Congressional intent, and at the very least, that the DOL’s

interpretation is reasonable.

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OREGON REST. & LODGING ASS’N V. PEREZ 23

Conclusion

To be clear, we have no quarrel with Cumbie v. Woody

Woo Inc., 596 F.3d 577 (9th Cir. 2010). Our conclusion with

respect to Cumbie is only that its holding was grounded in

statutory silence. Following Christensen v. Harris Cty.,

529 U.S. 576 (2000), we find that Cumbie does not foreclose

the DOL’s ability to regulate tip pooling practices of

employers who do not take a tip credit.

Applying Chevron, we conclude that Congress has not

addressed the question at issue because section 203(m) is

silent as to the tip pooling practices of employers who do not

take a tip credit. There is no convincing evidence that

Congress’s silence, in this context, means anything other than

a refusal to tie the agency’s hands. In exercising its

discretion to regulate, the DOL promulgated a rule that is

consistent with the FLSA’s language, legislative history, and

purpose.

Therefore, having decided that the regulation withstands

Chevron review, we reverse both judgments and remand for

proceedings consistent with this opinion.

REVERSED and REMANDED.

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24 OREGON REST. & LODGING ASS’N V. PEREZ

N.R. SMITH, Circuit Judge, dissenting:

Colleagues, even if you don’t like circuit precedent, you

must follow it. Afterwards, you call the case en banc. You

cannot create your own contrary precedent.1

This case is nothing more than Cumbie II. Because the

majority ignores our precedent in Cumbie v. Woody Woo, Inc.

(“Cumbie”), 596 F.3d 577 (9th Cir. 2010), I begin by

describing it in some detail. I will then compare Cumbie to

this case.

In Cumbie, a waitress working at an Oregon restaurant

sued the restaurant, alleging that its tip-pooling arrangement

violated 29 U.S.C. § 203(m). Id. at 579.

[The restaurant] paid its servers a cash wage

at or exceeding Oregon’s minimum wage,

which at the time was $2.10 more than the

federal minimum wage. In addition to this

cash wage, the servers received a portion of

their daily tips. [The restaurant] required its

servers to contribute their tips to a “tip pool”

that was redistributed to all restaurant

employees. The largest portion of the tip pool

(between 55% and 70%) went to kitchen staff

(e.g., dishwashers and cooks), who are not

1 As a three-judge panel of this circuit, we are bound by prior panel

opinions and can only reexamine them when “the reasoning or theory of

our prior circuit authority is clearly irreconcilable with the reasoning or

theory of intervening higher authority.” Miller v. Gammie, 335 F.3d 889,

893 (9th Cir. 2003) (en banc). Here, our circuit precedent is clear and

there has been no intervening higher authority. Therefore, we are bound

to follow precedent.

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OREGON REST. & LODGING ASS’N V. PEREZ 25

customarily tipped in the restaurant industry.

The remainder (between 30% and 45%) was

returned to the servers in proportion to their

hours worked.

Id. at 578–79 (footnotes omitted). The district court dismissed

the waitress’s complaint for failure to state a claim, and she

timely appealed. Id. at 579.

On appeal,thewaitress argued the restaurant’s tip-pooling

arrangement was invalid, because it included employees who

were not “customarily and regularly tipped employees” under

section 203(m). Id. The restaurant argued that this

interpretation of section 203(m) was correct only “vis-à-vis

employers who take a ‘tip credit’ toward their minimumwage obligation,” and that, because the restaurant had not

taken a tip credit, it had not violated section 203(m). Id.

We affirmed the district court, relying on the precedent

established by the Supreme Court in Williams v. Jacksonville

Terminal Co., 315 U.S. 386 (1942). Cumbie, 596 F.3d at 579.

In Williams, the Supreme Court held that “[i]n businesses

where tipping is customary, the tips, in the absence of an

explicit contrary understanding, belong to the recipient.

Where, however, [such] an arrangement is made . . . , in the

absence of statutory interference, no reason is perceived for

its invalidity.” Williams, 315 U.S. at 397 (internal citations

omitted). Thus, “Williams establish[ed] the default rule that

an arrangement to turn over or to redistribute tips is

presumptively valid.” Cumbie, 596 F.3d at 579.

We also held, as a matter of first impression, that section

203(m) did not interfere with the default rule articulated in

Williams. Id. at 580–81. Employers (who do not take a tip

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26 OREGON REST. & LODGING ASS’N V. PEREZ

credit) remain free to contract with their tipped employees to

redistribute tips among all employees, including those who

are not customarily tipped. Cumbie, 596 F.3d at 579–81. We

reasoned that section 203(m) did not impose statutory

interference, because the plain text of section 203(m) had

only imposed a condition on employers who take a tip credit,

rather than a blanket requirement on all employers regardless

of whether they take a tip credit. Cumbie, 596 F.3d at 581. As

we concluded, “[a]statute that provides that a person must do

X in order to achieve Y does not mandate that a person must

do X, period.” Id. We continued:

If Congress wanted to articulate a general

principle that tips are the property of the

employee [when the employer does not take a

tip credit], it could have done so without

reference to the tip credit. “It is our duty to

give effect, if possible, to every clause and

word of a statute.” United States v. Menasche,

348 U.S. 528, 538–39, 75 S.Ct. 513, 99 L.Ed.

615 (1955) (internal quotation marks

omitted). Therefore, we decline to read

[section 203(m)] in such a way as to render its

reference to the tip credit, as well as its

conditional language and structure,

superfluous.

Id. Because the restaurant in Cumbie did not take a tip credit,

there was no basis for concluding that the restaurant’s tippooling arrangement violated section 203(m). Id.

Lastly, we addressed the waitress’s argument that the

restaurant was functionally taking a tip credit by using a tippooling arrangement to subsidize the wages of its non-tipped

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OREGON REST. & LODGING ASS’N V. PEREZ 27

employees. Id. at 582. We said, even if this were the case, this

“de facto” tip credit was not “so absurd or glaringly unjust as

to warrant a departure from the plain language of the statute.”

Id. (quoting Ingals Shipbuilding, Inc. v. Dir., Office of

Workers’ Comp. Programs, 519 U.S. 248, 261 (1997)). We

recognized that “[t]he purpose of the [Fair Labor Standards

Act (“FLSA”)] is to protect workers from ‘substandard wages

and oppressive working hours,’” and concluded that the

restaurant’s tip-pooling arrangement did not thwart that

purpose. Id. (quoting Barrentine v. Ark.-Best Freight Sys.,

Inc., 450 U.S. 728, 739 (1981)). Thus, because “[t]he

Supreme Court has made it clear that an employment practice

does not violate the FLSA unless the FLSA prohibits it,” we

rejected the waitress’s argument and concluded that the FLSA

does not restrict employee tip-pooling arrangements when the

employer does not take a tip credit. Id. at 583.

We now decide a case identical to Cumbie. Once again,

an Oregon restaurant (named aptly enough “Oregon

Restaurant”) is defending its practice of pooling the tips of its

tipped employees and redistributing those tips among all of

its employees, including those who are not customarily

tipped. Exactly like Cumbie, the restaurant is paying all of its

employees above minimum wage and has not taken a tip

credit. Again, its tipped employees are challenging that

practice—not under a new theory, but under the same theory

advanced in Cumbie. Again, they argue that section 203(m)

prohibits the redistribution of tips.2 Because we are obligated

2 Technically, rather than waiting to be sued by its tipped employees,

Oregon Restaurant is instead suing the Department of Labor in response

to its newly promulgated rule reinterpreting section 203(m). Nonetheless,

in Cesarz v. Wynn Las Vegas (the other case in this appeal), involving a

casino instead of a restaurant, the tipped casino dealers are indeed suing

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28 OREGON REST. & LODGING ASS’N V. PEREZ

to follow precedent, this case should have ended with a

memorandum disposition.

Instead, the majority ignores our circuit precedent and

pretends this case is different, because this time the

Department of Labor (“DOL”) has promulgated a new rule

interpreting section 203(m) differently than we interpreted it

in Cumbie. However, the DOL’s promulgation of this new

rule changes nothing. As the majority notes, if Congress’s

intent behind a statute is clear, that is the end of our inquiry.

We need not defer to an agency’s interpretation of this

statute. Maj. Op. at 13–14; Chevron U.S.A., Inc. v. Nat. Res.

Def. Council, Inc., 467 U.S. 837, 842–43 (1984).

No one disputes that the courts can determine whether a

statute is clear. In fact, the Supreme Court has held that a

prior judicial construction of a statute “trumps an agency

construction otherwise entitled to Chevron deference” when

“the prior court decision holds that its construction follows

from the unambiguous terms of the statute and thus leaves no

room for agency discretion.” See Nat’l Cable & Telecomms.

Ass’n v. Brand X Internet Servs. (“Brand X”), 545 U.S. 967,

982 (2005). The majority wants to dodge the Brand X bullet

by saying Cumbie did not determine that the meaning of

section 203(m) is clear and unambiguous, but instead only

determined that “nothing in the text purports to restrict” the

practice of redistributing tips, thereby leaving room for

agency interpretation. Maj. Op. at 15, 18–19 (quoting

Cumbie, 596 F.3d at 583). This interpretation of Cumbie has

no merit. Any rational reading of Cumbie unequivocally

the casino just as the waitress in Cumbie sued the restaurant. Thus, the

facts and procedural posture in both cases remain functionally identical to

those in Cumbie.

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OREGON REST. & LODGING ASS’N V. PEREZ 29

demonstrates that we determined the meaning of section

203(m) is clear and unambiguous, leaving no room for

agency interpretation. We explicitly concluded that section

203(m) is “clear” or “plain” multiple times—not only in the

footnotes to the opinion, but also in the text of the opinion

itself. Cumbie, 596 F.3d at 579 n.6, 580–81, 581 n.11.

Moreover, because the language of the statute was clear and

unambiguous, we expressly concluded there was no need to

refer to the legislative history. Id. at 581 n.11. If there were

any remaining question concerning the plain language of the

statute, we clearly stated that any alternate reading would

render its language and structure superfluous. Id. at 581.

Indeed, there has not been penned a stronger application of

the Brand X standard than the majority encounters in Cumbie.

If Cumbie did anything at all, it held that the meaning of

section 203(m) was clear an§d unambiguous.3

The majority next tries to dodge Cumbie by suggesting

section 203(m) is silent as to whether the DOL can regulate

tip pooling arrangements of employers who do not take a tip

credit. Cumbie addressed this “statutory silence” argument

squarely: according to the plain text of the statute, section

203(m) only applies to employers who do take a tip credit

(because they are not paying the minimum wage), and

therefore does not apply to employers who do not take a tip

credit. Nowhere in its text, either explicitly or implicitly, does

section 203(m) impose a blanket tipping requirement on all

3 The majority counters that “[w]hat was ‘clear’ in Cumbie was that the

FLSA’s tip credit provision did not impose any ‘statutory interference’

that would invalidate tip pooling when no tip credit is taken.” Maj. Op. at

18–19, n.4. Read Cumbie; the majority is wrong. Instead, we explicitly

held in Cumbie that section 203(m) does not apply to employers who do

not take a tip credit, and that any alternate reading would render its

language and structure superfluous. Cumbie, 596 F.3d at 581.

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30 OREGON REST. & LODGING ASS’N V. PEREZ

employers. We explained, “[a] statute that provides that a

person must do X in order to achieve Y does not mandate that

a person must do X, period.” Cumbie, 596 F.3d at 581. There

is no contrived ambiguity to address in section 203(m).

Contrary to the majority opinion, Christensen has no validity

here. Maj. Op. at 15; see Christensen v. Harris Cty., 529 U.S.

576, 588 (2000).4

Even if Christensen were relevant, the majority’s

interpretation of Christensen turns Chevron on its head.

Instead of requiring that administrative rulemaking be rooted

in a congressional delegation of authority, the majority claims

that, where a statute is “silent,” administrative regulation is

not prohibited. In other words, the majority suggests an

agency may regulate wherever that statute does not forbid it

to regulate. This suggestion has no validity. The Supreme

Court has made clear that it is only in the ambiguous

“interstices” within the statute where silence warrants

administrative interpretation, not the vast void of silence on

either side of it. Util. Air Regulatory Grp. v. E.P.A., 134 S.

Ct. 2427, 2445 (2014) (“Agencies exercise discretion only in

the interstices created by statutory silence or ambiguity

4 The majority states “the dissent overlook[s] the part of Christensen that

discussed Chevron deference and Judge Souter’s concurrence.” Maj. Op.

at 17.

Again, the majority is wrong. In Christensen, the Supreme Court

allowed the DOL to enact further regulation over compensatory time,

because the DOL had been given the express authority to do so.

Christensen, 529 U.S. at 580–81. However, under section 203(m), the

DOL has only been given authority to regulate the tips of employers who

take a tip credit. The DOL has not been given authority to regulate the tips

of employers who pay their employees a minimum wage and do not take

a tip credit. Therefore, unlike Christensen, there was no statutory silence

permitting the DOL further regulation of this issue.

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OREGON REST. & LODGING ASS’N V. PEREZ 31

. . . .”). If it were otherwise, within each statute granting

administrative authority, Congress would need to erect walls,

making it clear that the agency is limited to regulating only

that which the statute expressly addresses, or implies within

those parameters. As the district court below correctly noted,

“[t]o express its intention that certain activities be left free

from regulation, Congress need not lace the United States

Code with the phrase, ‘You shall not pass!’” Oregon Rest. &

Lodging v. Solis, 948 F.Supp. 2d 1217, 1225–26 (D. Oreg.

2013). Thus, because section 203(m) is “silent” to regulation

over employers who do not take a tip credit, any such

regulation falls outside of the scope of the statute and the

DOL has no power to regulate there. See City of Arlington v.

F.C.C., 133 S. Ct. 1863, 1868 (2013) (“No matter how it is

framed, the question a court faces when confronted with an

agency’s interpretation of a statute it administers is always,

simply, whether the agency has stayed within the bounds of

its statutory authority.”).

It is curious why the majority seizes on the DOL’s newly

promulgated rule as the basis for its decision. The argument

the DOL makes now was the same argument made in

Cumbie.

5 However in Cumbie, the waitress ultimately

“recogniz[ed] that section 203(m) [was] of no assistance” in

prohibiting employers (who do not take a tip credit) from

pooling their employees’ tips and “disavowed reliance on it

in her reply brief and at oral argument” in favor of an

alternative, albeit equally meritless argument. Cumbie,

596 F.3d at 581. Now, after losing in Cumbie, the DOL has

decided to go through the backdoor by promulgating a new

5 The DOL supported the waitress’s appeal in Cumbie by filing an

amicus brief.

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32 OREGON REST. & LODGING ASS’N V. PEREZ

rule codifying its argument in Cumbie and its preferred

interpretation of section 203(m).

Chevron deference does not work that way. The DOL is

not a legislative body unto itself, but instead must carry out

Congress’s intent. Chevron, 467 U.S. at 842–43. To the

extent Congress’s intent is unclear with regard to a particular

statute, the DOL may engage in statutory interpretation and

issue rules. Id. But that circumstance is not presented here.

Instead, we explicitly and unequivocally found section

203(m) clear and unambiguous. Congress’s intent was clear

on this matter. Regardless of how much the DOL dislikes the

interpretation, it must follow it. See Brand X, 545 U.S. at 982.

The DOL is not free to manufacture an ambiguity, which

circuit precedent mandates is not there.

CONCLUSION

There are two cases before us. In the first case, the

Oregon Restaurant and Lodging Association sued the DOL,

challenging the validity of its newly promulgated rule and

seeking to enjoin its enforcement. In the second case, a group

of casino dealers sued their employer, Wynn Las Vegas,

LLC, challenging its tip pooling practice as a violation of the

DOL’s new rule. In both of these cases, the employer paid its

employees above minimum wage and did not take a tip credit.

In both cases, the district court ruled in favor of the employer,

relying in large measure on our decision in Cumbie.

Our course is clear in both cases. Williams is still good

law; the Supreme Court has done nothing to overturn or alter

it. See Williams, 315 U.S. at 397. Thus, the rule remains that

tips belong to the tipped employee unless otherwise agreed

between the employee and the employer. Here, such

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OREGON REST. & LODGING ASS’N V. PEREZ 33

agreements existed between the employers and their

respective employees. These tip redistribution agreements are

presumptively valid and compliant with our circuit’s law.

Thus, in each case, we ought to be affirming the district court.

To do otherwise is to ignore circuit precedent and disregard

stare decisis, as the majority does here.

I respectfully dissent.

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