Wednesday, March 15, 2017

Employers of Tipped Employee's Beware: You May Be Calculating Minimum Wage Wrong!

In a decision published on March 7th, the Tenth Circuit Court of Appeals, the federal appellate court with jurisdiction over Utah, ruled that a trial court judge had incorrectly dismissed a case in which an employee claimed she was denied minimum wage on portions of her work that were not entitled to a "tip credit."  In Romero v. Top-Tier Colorado LLC, the court ruled that it did not matter that the employee received minimum wage for the entire week when applying the tip credit to all hours the employee had worked. Instead, the court instructed the trial court to determine whether the restaurant impermissibly applied tip credits to hours the employee did work that was not entitled to an application of a tip credit.  

An example might help understand this decision.  Assume an employee was hired as a waitress, but she was also responsible to do administrative work.  She was hired at $5 per hour with a tip credit.  Further assume that the employee worked ten hours in a week---5 of those hours on administrative tasks and 5 as a waitress---and made $50 in tips in that same week.  If the employer paid the employee at $5 per hour and then was entitled to enhance all of those hours with the $50 tip credit, the employee would have been paid minimum wage and would not be entitled to any more pay.  $50 in wages added to $50 in tips would result in a wage of $10 per hour ($100/10 hours).  However, if the employer were not entitled to apply the tip credit to the administrative hours, the employee would not have been paid minimum wage for the administrative hours because the pay for those hours was only $5.00 per hour, less than the federally mandated $7.25 per hour.  Accordingly, the waitress would be entitled to an additional $11.25 for that week.  

Although as applied to a single week to a single employee an employer's mistake may have minimal financial impact, the financial impact of an incorrect application of the tip credit could have enormous financial consequences to an employer of many tipped employees.  Employers of tipped employees that rely on those tips to meet minimum wage requirements should therefore carefully review their policies and practices.

Monday, March 13, 2017

Cases --- March 5th through 11th

Discrimination/Retaliation

*Henson v. Amerigas Propane, Inc. (10th Cir., March 10, 2017) (affirming summary judgment in favor of Amerigas:  Henson failed to show Amerigas’s stated reasons for firing him were pretexts for unlawfuldiscrimination and retaliation)

ERISA and Employee Pension Plans

SEC v. DeYoung (10th Cir., March 9, 2017) (affirming district court approval of a settlement including a bar to all other claims against the fund custodian by any of the 5500 account owners with a stake in the fund in receivership)

Public Employees

Garling v. EPA (10th Cir., March 7, 2017) (discussion of government employee liability under the Federal Tort Claims Act. Ultimately, the court determined that neither they, nor the court below, had jurisdiction and dismissed the matter)

Wages

Romero v. Top-Tier Colorado, LLC (10th Cir., March 7  2017) (reversing dismissal of Romero's minimum-wage claim and holding that, to the extent an employee's tips are relevant in determining whether an employer has satisfied its legal minimum-wage obligations under 29 USC § 206(a), the threshold question is whether the employer can treat those tips as wages under § 203(m). The Tenth Circuit remanded the case to allow the district court an opportunity to answer the question in the first instance.)

*Cases marked with an asterisk are cases the 10th Circuit does not consider binding precedent except under the doctrines of law of the case, res judicata, or collateral estoppel. They may be cited, however, for persuasive value under Fed.R.App.P. 32.1 and 10th Cir.R. 32.1.

Wednesday, March 8, 2017

Employers Can Rest A Bit Easier: EEOC Subpoena Power Does Have Limits

In a decision issued on February 27, 2017, the Tenth Circuit Court of Appeals, the federal appellate court with jurisdiction over Utah, ruled that an employer justifiably refused to comply with an EEOC subpoena that sought information in an investigation into company-wide discrimination spurred by what the EEOC alleged was a company's admission of wrongdoing in an individual's pregnancy and disability discrimination claims.  In EEOC v. Tricore Reference Laboratories, the court held that it was not enough that the EEOC noted in a letter during the investigation of the underlying charge that it intended to broadened the investigation into other potential violations, the EEOC could only investigate the violation that was actually charged.

Although this case does give some restraints to the EEOC's investigative powers, the court's decision is very limited in application and still recognizes the broad investigative powers of the EEOC.  In fact, the opinion notes many instances where the EEOC may have prevailed had it made different arguments to the district and appellate courts.

Tuesday, March 7, 2017

Cases --- February 26th through March 4th

Discrimination/Retaliation

EEOC v. Tricore Reference Laboratories (10th Cir., February 27, 2017) (affirming federal district court refusal to enforce a subpoena seeking disclosure of information as to individual's charge of disability and pregnancy discrimination)

Workers Compensation/Occupational Safety and Disease

Vallejo v. Berryhill (10th Cir., February 28, 2017) (remanding disability decision to the district court to address remaining arguments and determine whether the correct legal standards were applied. A complex opinion which discusses sentences 4 and 6 of 42 USC 405(g))

*Cases marked with an asterisk are cases the 10th Circuit does not consider binding precedent except under the doctrines of law of the case, res judicata, or collateral estoppel. They may be cited, however, for persuasive value under Fed.R.App.P. 32.1 and 10th Cir.R. 32.1.

Cases --- February 19th through 25th

Discrimination/Retaliation

Williams v. FEDEX Corporate Services (10th Cir., February 24, 2017) (affirming summary judgment for FEDEX on Williams's regarded-as-disabled claim, but reversing and remanding his disability-related inquiry claim for district court decision)

ERISA and Employee Pension Plans

Keller Tank Services II, Inc., v. Commissioner of Internal Revenue (10th Cir., February 21, 2017) (affirming summary judgment against Keller on its protest of tax penalty appeal regarding its deductions for contributions to an employee benefit plan)

Workers Compensation/Occupational Safety and Disease

*Lewis v. Berryhill (10th Cir., February 21, 2017) (reversing denial of disability benefits because the administrative law judge erred by failing to give appropriate weight to Lewis's treating physician)


*Cases marked with an asterisk are cases the 10th Circuit does not consider binding precedent except under the doctrines of law of the case, res judicata, or collateral estoppel. They may be cited, however, for persuasive value under Fed.R.App.P. 32.1 and 10th Cir.R. 32.1.

Saturday, March 4, 2017

February 12th through 18th

Discrimination/Retaliation

*Chaney v. Wal-Mart Stores, Inc. (10th Cir., February 14, 2017) (affirming dismissal with prejudice for failure to file amended complaint because there was no abuse of discretion, and claims of potential bias were entirely speculative)

*Huggins v. Reilly (10th Cir., February 15, 2017) (affirming summary judgment in favor of defendant on inmate Huggins' s.1983 discrimination and retaliation employment claims, because he failed to exhaust his administrative remedies)

*Sanchez v. Brennan (10th Cir., February 14, 2017) (affirming dismissal of complaint for lack of jurisdiction because Sanchez failed to exhaust his administrative remedies)

Miscellaneous

*BNSF Railway Company v. C.A.T. Construction, Inc. (10th Cir., February 13, 2017) (affirming denial of motion for judgment as a matter of law because even assuming employee's negligence, causation remains a question of fact for the jury)

Workers Compensation/Occupational Safety and Disease

Brown v. Williams (Utah Ct. App., February 16, 2017) (affirming summary judgment in favor of Williams: 
there were no material facts at issue; the court below correctly applied workers' compensation law; and such benefits were Brown's exclusive remedy. This case also adopts the "parking lot rule" that a parking lot used by employees is part of the employer's premises)

*Johnson v. Berryhill (10th Cir., February 15, 2017) (affiming denial of disability benefits because Johnson still retained the residual functional capacity for limited sedentary work)


*Cases marked with an asterisk are cases the 10th Circuit does not consider binding precedent except under the doctrines of law of the case, res judicata, or collateral estoppel. They may be cited, however, for persuasive value under Fed.R.App.P. 32.1 and 10th Cir.R. 32.1.