Trump Win Paves Way for High Court Review of Tip-Pool Rule

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Ben Penn

Nov. 15 — Add the Labor Department’s 2011 tip-pool rule to the list of workplace regulations that are in jeopardy as a result of Donald Trump’s election victory.

The National Restaurant Association has decided it will ask the high court to review the rule’s legality now that Trump, not Hillary Clinton, has the power to fill the vacant U.S. Supreme Court seat, Angelo Amador, the trade group’s senior vice president and regulatory counsel, told Bloomberg BNA.

The association was already considering filing its petition ahead of a Dec. 5 deadline but was still asking itself, “do we want to expend our resources on that?” Amador said. Trump appointing a justice to fill Antonin Scalia’s seat means “now it looks much better” for a favorable decision on the rule, he said.

The DOL in 2011 updated its tip credit regulations to bar all employers from maintaining invalid tip pools, not just those that take the tip credit that lets them pay a subminimum wage. This means that restaurants and hotels that pay workers the full minimum wage on top of tips are prohibited under the rule from allowing back-of-house staff, such as cooks and dishwashers, to share the tips of bussers, bellhops and other front-of-house workers.

In September, the U.S. Court of Appeals for the Ninth Circuit declined to rehear a panel decision that upheld the DOL’s rule. Although en banc rehearings are rarely granted, the court’s decision drew an unusually long and vigorous dissent.

The Oregon Restaurant and Lodging Association, an affiliate of the National Restaurant Association, then filed a motion to halt the rule, which was granted, pending final disposition by the high court.

The Oregon Restaurant and Lodging Association argued that the agency exceeded its authority under the Fair Labor Standards Act when it issued the rule.

A DOL spokesman declined to comment.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.