Source: http://openjurist.org/192/f3d/546/eric-myers-jimmy-underwood-michelle-grundorf-et-al-v-the-copper-cellar-corporation
Timestamp: 2013-06-20 05:25:36
Document Index: 490191402

Matched Legal Cases: ['§ 203', '§531', '§ 203', '§ 203', '§ 215', '§ 203', '§ 2105', '§ 206', '§ 531']

192 F3d 546 Eric Myers, Jimmy Underwood, Michelle Grundorf, et al. v. The Copper Cellar Corporation | OpenJurist
192 F. 3d 546 - Eric Myers, Jimmy Underwood, Michelle Grundorf, et al. v. The Copper Cellar Corporation	Home192 f3d 546 eric myers, jimmy underwood, michelle grundorf, et al. v. the copper cellar corporation
192 F3d 546 Eric Myers, Jimmy Underwood, Michelle Grundorf, et al. v. The Copper Cellar Corporation 192 F.3d 546 (6th Cir. 1999)
Eric Myers, Jimmy Underwood, Michelle Grundorf, et al., Plaintiffs-Appellants,v.The Copper Cellar Corporation, Defendant-Appellee.
No. 98-5595
During the subject three year span, Copper Cellar's corporate standard operating procedures dictated that the table server must prepare a house salad for each of his or her customers2. The waiter or waitress would draw ingredients from storage bowls which had been stocked by the kitchen staff, mix them in a standard salad bowl, add the customer-specified dressing, and deliver it to the patron. However, during various peak volume seasons, days, or hours, management at some Copper Cellar restaurants would occasionally designate a single wait staff employee exclusively to prepare house salads for all table servers then on duty. During such "salad shifts," the assigned salad maker typically performed no substantial duties other than the assembly of house salads and associated tasks, such as the maintenance of the salad preparation area and the restocking of depleted salad ingredients obtained from the galley. The salad preparer had no personal contact with diners, labored outside their view, and received no direct customer gratuities.
Nonetheless, because the defendant considered the salad preparers to perform a wait staff function, it compelled the inclusion of the salad maker within the shift's "tip pool." Generally, Copper Cellar required each of its directly tipped service employees to contribute a portion of his or her gratuities (generally an amount equal to 2% or 3% of the server's total gross sales, although the practice varied among the defendant's restaurants) earned during the shift to a fund to be divided among the employees who had assisted the servers, including bus boys, runners, service bartenders, and (if one was on duty) the salad maker. In turn, the employer compensated personnel who shared in customer largess at a rate equal to approximately 50% of the $4.25 per hour prevailing statutory minimum wage (to wit, $2.13 per hour), claiming for itself the "tip credit" against the minimum wage obligation authorized by 29 U.S.C. § 203(m)3. The defendanthas endeavored to justify its classification of the salad assemblers as properly "tipped" service employees by reason of their performance of a task which each individual server otherwise would have been required to discharge, thereby enhancing the efficiency of customer service and concurrently increasing the total number of tables which a server could tend, which, in tandem, escalated the server's potential perquisite earnings during the subject shift.4 See 29 C.F.R. §531.54 (recognizing that bus boys who assist servers but who customarily do not directly receive diner-donated gratuities may properly be included in an employer-mandated tip pool)5.
However, this forum rejects the proposition that, to avoid invalidation of the tip credit, an employer's deduction from an employee's credit card tip may not, under any circumstances, exceed the actual service charge imposed by the credit service provider with respect to the specific charged gratuity at issue. To the contrary, this court concludes that the employer may, consistent with the letter and spirit of the FLSA, withhold a standard composite percentage from each credit card tip, even if, as a consequence, some deductions will exceed the expense actually incurred in collecting the subject gratuity, as long as the employer proves by a preponderance of evidence that, in the aggregate, the amounts collected from its employees, over a definable time period, have reasonably reimbursed it for no more than its total expenditures associated with credit card tip collections15. Stated differently,the employer must prove that its total deductions from employees' tip incomes did not enrich it, but instead, at most, merely restored it to the approximate financial posture it would have occupied if it had not undertaken to collect credit card tips for its employees during the relevant period.16 See Herman v. Collis Foods, Inc., 176 F.3d 912, 918 (1999) (recognizing "the FLSA's policy of preventing employers from exploiting § 203(m) deductions for profit.").
This circuit has recently defined that the "reasonable cost" of an employer- provided meal, which, pursuant to section 203(m), the employer may deduct from the employee's pay check as a credit against its minimum wage obligation,17 may consist of a standardized substantiated estimated average cost, rather than the actual cost, of such customarily furnished meals, which the employer may subtract automatically on a "per-shift" basis, even if the employee declines that repast18. Id. at 916-18. While the question posed before the instant forum is not whether an employer may deduct the reasonable cost of processing an employee's credit card tip from his or her minimum wages, but instead is whether the employer may subtract those reasonable expenses from the employee's non-wage tip income, Collis Foods furnishes analogical support for the conclusion that Congress intended, via section 203(m), to permit an employer, at least in some instances, to credit itself with the average, instead of the actual, expense incurred in providing a valuable service or commodity to its employees.
A painstaking review of the record evidence disclosed no clear error in the initial forum's finding that Copper Cellar's 3% standard composite deduction from its employees' credit card tips between September 29, 1992 and September 29, 1995 was reasonably compensatory. See Collis Foods, 176 F.3d at 919. Accordingly, that practice did not divest the defendant of its statutory tip credit. 29 U.S.C. § 203(m). Additionally, this review has identified no clear factual error, abuse of discretion, or mistake of law in the lower court's disallowance of claimed damages for alleged retaliation and/or intimidation under 29 U.S.C. § 215(a)(3), or in its rejection of the plaintiffs' request for sanctions.
29 U.S.C. § 203(m) (as amended Nov. 17, 1989). See Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294, 298 (6th Cir. 1998). Section 203(m) has been materially amended effective August 20, 1996. Pub.L. 104-188, § 2105(b).
At all times relevant to the case at bench, the statutory basic minimum wage was $4.25 per hour. 29 U.S.C. § 206(a)(1) (as amended Nov. 17, 1989). Accordingly, an employer was authorized to compensate its tipped staffers at one-half of minimum wage (or $2.125 per hour), contingent upon satisfaction of other statutory requisites.
Although the Labor Department's wage and hour regulations, as administrative interpretations of the FLSA, "constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance," the Regulations have recognized that "[t]he ultimate decisions on interpretations of the Act are made by the courts." 29 C.F.R. § 531.25(a) (citations omitted).
"Wage" paid to any employee includes the reasonable cost . . . to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees[.]"
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