Landmark Sub-Minimum Wage Lawsuit Reversed in Ninth Circuit

Last Tuesday, The United States Court of Appeals for the Ninth Circuit — the federal court with appellate jurisdiction over 13 Western-state districts — reversed a landmark decision allowing foodservice operators to pay employees sub-minimum wages for some non-tipped work.

Nation’s Restaurant News has reported that the case of Alec Marsh v. J. Alexander’s LLC, which was originally ruled in favor of the operator, J. Alexander’s, was reversed in agreement with a similar and subsequent ruling the Eight Circuit.

Alec Marsh, who was joined by 13 other servers and bartenders from a range of franchise foodservice brands for the new suit, alleges that he was paid a tipped-wage for non-tipped work, like cleaning. Marsh’s complaint revolves around the Department of Labor’s so-called 80/20 rule, which allows employers to pay employees a sub-minimum wage if they spend 80 percent or more of their time on tipped work. Marsh says his employers broke that rule by paying him a tipped-wage even when he spent more than 20 percent of his time on non-tipped work.

By reversing its earlier decision and ruling in Marsh’s favor, the Ninth Court is signaling to restaurant owners that they need to take a close look at the day-to-day duties of all of their tipped-wage workers.