UPDATE: On July 6, 2023, the district court sided with the Department of Labor, holding the final rule was a “permissible construction” of the tip credit statute. While the restaurant industry groups that brought the case could appeal again, the district court’s decision is sound and well-reasoned—and a victory for workers.
UPDATE: On May 2, 2023, the Fifth Circuit found that the plaintiffs submitted sufficient evidence to reverse and remand the district court’s order denying their request for a preliminary injunction. The district court had denied the request on the grounds that the Restaurant Law Center (RLC) had not proven an “irreparable injury” due to the Department of Labor’s rule, but the Fifth Circuit concluded that RLC showed the rule’s estimated compliance costs were enough to demonstrate irreparable harm, which need only be “more than de minimis.”
Fortunately, the Fifth Circuit ruling is narrow: it is limited explicitly to the district court’s conclusion about irreparable harm. If the case returns to the district court, the plaintiffs will still have to prove the additional elements necessary to receive a preliminary injunction (such as a likelihood of success in the lawsuit), and the district court may still deny the request if those additional elements are not proven. When and whether the case will return to the district court, however, is uncertain, as DOL may instead choose to request review from the Fifth Circuit’s full membership (rather than from the three-judge panel that issued this decision) or petition the Supreme Court to review the decision.
In the meantime, NWLC remains in solidarity with workers, and will continue to fight for their protections.
On July 15, 2022, NWLC co-led an amicus brief to the Fifth Circuit in Restaurant Law Center v. U.S. Department of Labor to protect restaurant workers from wage theft and abusive labor practices. Represented by Democracy Forward, NWLC joined the Restaurant Opportunities Centers United, the Economic Policy Institute, Main Street Alliance, and the American Sustainable Businesses Network to submit a brief in support of the Department of Labor, urging the court to uphold the Department of Labor’s final rule limiting the amount of time tipped employees can spend performing non-tip-producing work while still receiving cash wages as low as $2.13 per hour. The DOL’s rule provides clear guidelines to ensure that unscrupulous employers cannot pay subminimum wages when they require workers to spend much of their shifts on work for which they do not earn tips. Amici wrote to provide details from the administrative record showing that the Department of Labor’s decision was not arbitrary and capricious and that the final rule prevents real harm to tipped workers—who are mostly women, disproportionately women of color, and face a far greater risk of poverty than workers overall.