Judge Theresa Springmann of the Northern District of Indiana on Tuesday dismissed claims brought by a former server employed by an Indiana-based Applebee's operator alleging the restaurant was not entitled to avail itself of the FLSA’s tip credit provision, 29 U.S.C. § 203(m) for certain hours worked. Roberts v. Apple Sauce, Inc., N.D. Ind., No. 12-cv-0830, 05/13/13.

Plaintiff Roberts brought several claims based upon the so-called “20% rule” and the Eighth Circuit’s related interpretation of the tip credit provision in Fast v. Applebee’s International, Inc., 638 F.3d 872, 877 (8th Cir. 2011). Roberts alleged that she spent more than 20% of her time performing allegedly “non-tipped” duties, requiring payment of those hours at the full non-tipped minimum wage of $7.25/hour, rather than the tip credit minimum wage, which remains $2.13/hour under federal law. She also alleged that certain tasks always fall outside the “tipped occupation” and require payment at the full minimum wage without consideration of other tasks performed during those hours.

Judge Springmann ruled that merely invoking certain supposedly non-tipped duties in a complaint—such as food preparation or general cleaning—is insufficient to state a claim. Observed the Judge, “the cases, together with the regulations and interpretive guidance, lend no merit to the Plaintiff’s proposition that duties like food preparation and general cleaning around the dining room cannot be incidental to the regular duties of a server and therefore must be compensated at minimum wage regardless of the percentage of time the employee spends on such duties or whether the duties are generally assigned to servers.” The Court did not explicitly rule whether it would give the Field Operations Handbook—the genesis of the 20% rule—any deference because the Complaint did not sufficiently allege facts triggering that rule, but the Court made several comments expressing skepticism regarding the deference owed.

In other contexts, the Department of Labor has acknowledged that many of the duties cited by Plaintiffs in cases such as Roberts are the “core” duties of a server, such as “sweeping and mopping floors, vacuuming carpet, tidying up server station, taking out trash, or checking and cleaning bathroom.”

While Roberts is a favorable decision for the hospitality industry, as it rejects broad conclusory pleading to support tip credit claims, tip practices should be regularly reviewed by counsel for compliance with both federal and applicable state law.