Epstein Becker Green’s capability to shape the law through litigation as well as government relations has proven to be of great benefit to our clients. For instance, we recently achieved a major win for the National Restaurant Association and several state restaurant and hospitality associations in a litigation matter involving U.S. Department of Labor (DOL) sub-regulatory guidance known as the “80/20 rule.”
The 80/20 rule prohibits employers from paying a tipped minimum wage to workers whose untipped side work—such as wiping tables—accounted for more than 20 percent of their time. In recent years, class actions against restaurants have flooded courts across the nation, all contending that the restaurants owe the tipped employees extra money because of the 80/20 rule.
In July 2018, Epstein Becker Green, on behalf of the Restaurant Law Center (the litigation arm of the National Restaurant Association), filed a declaratory judgment action against the DOL in a federal court in Texas challenging the validity of the 80/20 rule under the Fair Labor Standards Act (FLSA), the Administrative Procedure Act, and the U.S. Constitution. In the midst of our federal court challenge, on November 8, 2018, the DOL issued an opinion letter reversing its position, withdrawing the sub-regulatory guidance at issue in the lawsuit, and clarifying that employers may use the tip credit provisions of the FLSA without being subject to the onerous requirements that the DOL had imposed in recent years. This policy reversal undermined or effectively ended many FLSA lawsuits that the National Restaurant Association and other restaurant industry clients collectively faced across the country.
Epstein Becker Green played a leading role in the litigation opposing the 80/20 rule and worked behind the scenes with the DOL to obtain the policy reversal.