Court Opinion

ID: 4434684
Source: CourtListenerOpinion
Date Created: 2019-08-29 20:03:36.835715+00
Date Added: 2024-06-11T14:53:11.469308
License: Public Domain

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             DISTRICT OF COLUMBIA COURT OF APPEALS

                                 No. 17-AA-1195

                           SARAH PARKER, PETITIONER,

                                        V.

               MCCORMICK & SCHMICK’S SEAFOOD, RESPONDENT.

                      On Petition for Review of an Order of
                      the Office of Administrative Hearings
                                (DOES-1317-17)

(Submitted June 12, 2019                              Decided August 29, 2019)

      Jonathan H. Levy was on the brief for petitioner.

      Before BECKWITH and MCLEESE, Associate Judges, and NEBEKER, Senior
Judge.

      NEBEKER, Senior Judge:         Petitioner Sarah Parker’s application for

unemployment benefits was denied by a District of Columbia Department of

Employment Services (“DOES”) examiner, a decision that was affirmed by an

Office of Administrative Hearings (“OAH”) administrative law judge (“ALJ”)

following a hearing. Before this court, petitioner challenges the ALJ’s finding that

she voluntarily quit her job without good cause.          Respondent did not file a

responding brief. For the reasons discussed below, we reverse and remand for
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further proceedings consistent with this opinion.

                                            I.

      Petitioner worked as a full-time server at McCormick & Schmick’s

Northwest D.C. location from August 7, 2013, to March 7, 2017. On March 7,

petitioner informed her manager that she was quitting, effective immediately.

Petitioner said that she quit because of her dissatisfaction with the restaurant’s tip

pooling policy.

      Subsequent to quitting, petitioner applied for unemployment benefits. The

District of Columbia Unemployment Compensation Act specifies that an applicant

will be disqualified from receiving unemployment benefits if she is found to have

voluntarily left her employment without good cause, and a D.C. DOES claims

examiner found that petitioner’s quitting for dissatisfaction with her employer’s tip

pooling policy did not constitute good cause.          Petitioner appealed the claims

examiner’s decision.

      The ALJ presided over a hearing on September 5, 2017.                  It was not

contested that petitioner voluntarily quit, as petitioner testified, “I did [] voluntarily
                                         3

leave my place of employment and it was based on the fact that as servers we make

our living on tips and the company took a portion of those tips for our support

staff.” Petitioner elaborated that her employer “continued to take that money when

we did not have said support staff such as a busser or a host and I asked many

times to my bosses, to their bosses, why – where does that money go? I had no

help.” Petitioner said that this tip pooling policy was enforced several days a week

during the slower summer period, but at other times of the year it would occur

once a week or once a month. Petitioner did not keep her concerns to herself as

she testified, “I mentioned it to four or five people all up and down the line and

nobody ever really gave me an answer and I felt more and more frustrated and it

more and more felt like theft to me.” In affirming the claims examiner’s decision,

the ALJ concluded in a written order issued on September 25, 2017, that petitioner

failed to establish good cause for her voluntary decision to leave her employment.

This appeal followed.

                                        II.

      Our review of a denial of unemployment benefits is limited – although we

generally defer to the agency’s construction of a controlling statute or regulation,

we must reverse such a decision if the “findings and conclusions are unsupported
                                        4

by substantial evidence in the record of proceedings before the court.” Hockaday

v. District of Columbia Dep’t of Emp’t Servs., 443 A.2d 8, 12 (D.C. 1982).

Substantial evidence requires more than a scintilla – “it means such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion.”

Washington Post Co. v. District Unemployment Comp. Bd., 377 A.2d 436, 439

(D.C. 1977).

      For voluntary leaves from employment, the claimant bears the burden of

presenting sufficient evidence to support a good cause reason for leaving. 7

DCMR § 311.4 (2017).         “The circumstances which constitute good cause

connected with the work shall be determined by the Director based upon the facts

in each case. The test shall be, ‘what would a reasonable and prudent person in the

labor market do in the same circumstances?’” 7 DCMR § 311.5 (2017); see also

Kramer v. District of Columbia Dep’t of Emp’t Servs., 447 A.2d 28, 30 (D.C.

1982).   Examples of good cause include failure to provide remuneration for

employee services. 7 DCMR § 311.7 (2017).

      A tipped employee is “any employee engaged in an occupation in which

[s]he customarily and regularly receives more than $30 a month in tips.” 29
                                         5

U.S.C. § 203(t) (2012).1 There is no debate that petitioner here qualifies as a

tipped employee. Tip pooling arrangements are permitted among “employees who

customarily and regularly receive tips.” Kilgore v. Outback Steakhouse of Fla.,

Inc., 160 F.3d 294, 300 (6th Cir. 1998) (quoting 29 U.S.C. § 203(m) (2012)).

Identifying which employees customarily and regularly receive tips is determined

on a shift basis and is not based on employees’ titles. Montano v. Montrose Rest.

Assocs., Inc., 800 F.3d 186, 192 n.11 (5th Cir. 2015).

                                        III.

      On appeal, petitioner argues that it was reasonable for her to quit her job as a

server based on her concerns with her employer’s tip pooling policy. In contrast to

the petitioner in Beynum v. Arch Training Ctr. whose testimony about voluntarily

leaving employment at the vocational training facility for good cause was unclear,

petitioner here provided clear justification and reasoning for her decision to leave

her position as a server. 998 A.2d 316, 319-20 (D.C. 2010). Tip pooling concerns

are not novel. E.g., Montano, 800 F.3d at 186 (factual issue regarding whether

      1
         This tipping standard is a national standard that also accounts for local
variation.          See     U.S.      DEPARTMENT        OF      LABOR,       Tips,
https://www.dol.gov/general/topic/wages/wagestips (last visited July 30, 2019);
D.C. Code § 32-1003(g)(3) (2019 Repl.); 7 DCMR § 903.1 (2017).
                                         6

restaurant barista/coffeeman would customarily and regularly receive tips as part

of tip pooling agreement precluded summary judgment); Myers v. Copper Cellar

Corp., 192 F.3d 546, 550-51 (6th Cir. 1999) (restaurant tip pooling scheme deemed

improper for shifts where salad preparers were included in tip pool, as such

preparers did not directly interact with patrons and duties focused on food

preparation and kitchen support); Barcellona v. Tiffany English Pub, Inc., 597 F.2d
464, 467 (5th Cir. 1979) (restaurant failed to meet its burden of demonstrating a

valid tip pooling agreement); Stephens v. Farmers Rest. Grp., 291 F. Supp. 3d 95,

114 (D.D.C. 2018) (motion for class certification granted as servers made

sufficient showing that tip pooling policy violated the law because servers were

required to share tips with other employees who do not customarily and regularly

receive tips).

      Similarly, while the ALJ credited petitioner’s testimony that she quit her job

because of her tip pooling policy concerns, the ALJ failed to explain why

petitioner’s objection did not constitute good cause for voluntarily leaving her job.

See Cruz v. District of Columbia Dep’t of Emp’t Servs., 633 A.2d 66, 71-72 (D.C.

1993).   In Cruz, we reversed and remanded the hearing examiner’s decision

because the hearing examiner did not grapple with petitioner’s cited good cause

reasons, including the employer’s financial status and the workplace environment,
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making “no attempt at the hearing to elicit facts relevant to the complainant’s

allegations as to the situation existing at [the employer].” Id.

      Although the ALJ elicited facts about petitioner’s reason for voluntarily

leaving her employment, the ALJ failed to explain why her reasoning did not

constitute good cause. We conclude that the ALJ’s finding that petitioner left

without good cause is unsupported. We further conclude as a matter of law that

petitioner could reasonably leave her position based on her objection to her

employer’s enforcement of the tip pooling policy during shifts when other

employees who customarily and regularly receive tips were not working.            A

reasonable and prudent person in petitioner’s position would likely leave his or her

employment as a server when faced with the enforcement of the tip pooling policy

during those shifts, so reversal is appropriate here.

      Because we reverse on the grounds that petitioner’s reason for leaving

constituted good cause, we do not reach petitioner’s argument that her employer’s

conduct was illegal. See Ware v. District of Columbia Dep’t of Emp’t Servs., 157
A.3d 1275, 1277 (D.C. 2017).
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      For the foregoing reasons, we reverse the ALJ’s decision and remand the

case to DOES for further proceedings consistent with this opinion.

                                            So ordered.