Paul DeCamp Quoted in “5th Circ. Strikes Down DOL Tip Rule”

Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Law360, in “5th Circ. Strikes Down DOL Tip Rule,” by Max Kutner. (Read the full version – subscription required.)

Following is an excerpt:

The Fifth Circuit on Friday struck down a U.S. Department of Labor rule on tipped wages, saying it goes against the Fair Labor Standards Act and is therefore arbitrary and capricious.

In a published opinion, a unanimous three-judge panel said the rule, which clarified when employers can take a tip credit, set a restriction that Congress did not intend in crafting the FLSA and therefore can be set aside under the Administrative Procedure Act. The panel vacated the rule, which had taken effect in December 2021 and was challenged by the Restaurant Law Center and the Texas Restaurant Association.

"The final rule is attempting to answer a question that DOL itself, not the FLSA, has posed," U.S. Circuit Judge Jennifer Walker Elrod wrote on behalf of the panel. …

Paul DeCamp of Epstein Becker Green, counsel for the restaurant groups, said the ruling is significant and perhaps the first example of an appellate court striking down a federal rule post-Chevron.

"This decision is important not just for the substantive issue that it decides, and it is very important on that issue," DeCamp said. "But it goes beyond that, because this decision lights the way for other courts trying to grapple with what to do about regulations and challenges to regulations following the overturning of Chevron."

Angelo Amador, executive director of the Restaurant Law Center who is also counsel in the case, said in a statement he was pleased with the decision.

"The Department of Labor and its agencies had no authority to redraft the laws that Congress enacts, denying businesses the rights conferred by statute," he said. …

The restaurant groups are represented by Paul DeCamp and Kathleen Barrett of Epstein Becker Green and Angelo Amador of the Restaurant Law Center.

The DOL is represented by Jennifer Utrecht and Daniel M. Riess of the U.S. Department of Justice.

The case is Restaurant Law Center et al. v. U.S. Department of Labor et al., case number 23-50562, in the U.S. Court of Appeals for the Fifth Circuit.