Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Law360 Employment Authority, in “Biz Groups Say EPA Decision Helps Their Tip Rule Challenge,” by Irene Spezzamonte. (Read the full version – subscription required.)

Following is an excerpt:

The U.S. Supreme Court's decision on the Environmental Protection Agency's ability to regulate greenhouse gas emissions highlights that a Department of Labor rule regulating tipped and nontipped pay is illegal, two restaurant groups told a Texas federal court Monday.

In an unopposed motion to file a notice of supplemental authority, the Restaurant Law Center and the Texas Restaurant Association told a Texas district court that the West Virginia et al. v. EPA et al. decision showed the DOL didn't have the authority to issue a rule splitting what tasks are considered tipped or nontipped work. …

Monday's filing comes in support of the groups' April bid for summary judgment. The groups told the court then that the DOL overstepped its authority when it mandated the rule, which went into effect in December 2021. …

The industry groups argued that neither Congress nor the Fair Labor Standards Act — which allows employers to pay tipped workers as low as $2.13 per hour, as long as tips make up the difference between that amount and the federal minimum wage of $7.25 per hour — allowed the DOL to issue the rule.

The Restaurant Law Center and the Texas Restaurant Association already tried to block the rule in December, but the district court denied that request in February and the groups appealed to the Fifth Circuit. …

The groups sued in December, asking the Texas court to prevent the rule from going into effect. Later that month, the groups filed a motion for a nationwide preliminary injunction, leading to the February decision at stake in the Fifth Circuit.

In May, the DOL filed its own bid for summary judgment in the lower court, arguing that the process it followed to issue the rule was not arbitrary or capricious and that the agency acted within its authority.

Paul DeCamp of Epstein Becker Green, who is representing the groups, reiterated Monday that the DOL went beyond its allowed authority to issue the rule and that the agency is trying "to micromanage on a minute-by-minute basis the work of any tipped employee in the United States earning less than $7.25 per hour in cash wages."

"As the Supreme Court has made perfectly clear, most recently in West Virginia v. EPA, the department's approach is unlawful and a violation of constitutional separation of powers," DeCamp said. 


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