Virginia Lawyers Weekly VA Lawyers Weekly
Where the magistrate judge deferred to the interpretation of “managers or supervisors” made by the Department of Labor, or DOL, it did not err. The terms are ambiguous and the DOL’s interpretation wasn’t unreasonable.
Background
Garrett Hoffman alleges that Bear Chase Brewing Company willfully violated the Fair Labor Standards Act, or FLSA, by: (1) failing to give him sufficient notice of the tip credit (Count One) and (2) by unlawfully including “managers or supervisors” in the tip pool (Count Two). Following discovery, defendant filed a motion for summary judgment.
The magistrate judge recommends concluding (i) that summary judgment on plaintiff’s first count is inappropriate because there are genuine issues of material fact regarding whether plaintiff received sufficient notice of defendant’s use of a tip credit; (ii) that summary judgment on plaintiff’s second count is inappropriate because there are genuine issues of material fact regarding whether “managers or supervisors” were improperly included in the tip pool; (iii) that summary judgment is appropriate for all claims for non-continuing violations that arose more than two years before the filing of the instant lawsuit and (iv) that plaintiff’s eleventh-hour allegation that kitchen staff were improperly included in the tip pool be stricken as untimely. Both parties have filed objections.
Plaintiff’s objection
Even though plaintiff prevailed before the magistrate judge with regard to the second count, plaintiff objects to the report’s legal reasoning on that count. Specifically, plaintiff objects to the report’s deference, pursuant to Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), to the Department of Labor’s interpretation of “managers or supervisors.” Plaintiff argues (i) that “manager” and “supervisor” are both unambiguous terms when afforded their ordinary meaning evidenced by dictionaries and (ii) that even if those terms are ambiguous, the DOL’s interpretation of that term is unreasonable.
The first issue is whether the statutory phrase “managers or supervisors” is ambiguous, for if not, then the “agency is not free to counter Congress’s commands.” Here, the court finds that the terms “manager” and “supervisor” are ambiguous because each is susceptible to more than one reasonable meaning.
The conclusion that “managers or supervisors” is ambiguous does not end the inquiry, for the DOL’s regulation defining those terms is entitled to deference only if it is reasonable. Plaintiff’s first argument is that the DOL unreasonably interpreted “managers or supervisors” conjunctively rather than disjunctively. But this is not true.
Plaintiff next argues that the DOL unreasonably defines “managers or supervisors” in the same way that the DOL regulations define “executive.” The court finds that it is not unreasonable for the DOL to interpret “managers or supervisors” similarly to how it interprets “executive.” And, in any event, the regulations actually define “executive” more narrowly than “managers or supervisors.”
Plaintiff’s third argument against deference to the DOL’s interpretation of “managers or supervisors” is that two members of Congress penned a letter disagreeing with the DOL’s interpretation. This argument is unavailing because the statements to which plaintiff points are not probative of the statute’s meaning and do not demonstrate that the DOL’s interpretation is unreasonable.
Finally, plaintiff argues that two Fourth Circuit decisions compel a conclusion that the DOL’s definition of “managers or supervisors” here is unreasonable. But those cases dealt with statutory and regulatory language materially different from the language here. Accordingly plaintiff’s objection is overruled.
Defendant’s objection
Defendant first argues that, notwithstanding the report’s conclusion to the contrary, the undisputed factual record makes clear that none of the bar managers had significant input in hiring and firing employees, a necessary condition for qualifying as a manager or a supervisor under the DOL regulations. But, at this stage, the report was correct in concluding that a jury could determine from the record that particular weight was given to the recommendations of at least some of the bar managers in the tip pool.
Defendant next argues that the record demonstrates that no bar manager in the tip pool qualified as a manager or supervisor because none of them had the primary duty of management. The court finds that a jury could reasonably conclude, from the record, that the tip pool included people whose primary duty was the management of the enterprise.
Plaintiff’s and defendant’s objections to report and recommendation overruled.
Hoffman v. Bear Chase Brewing Company LLC, Case No. 1:21-cv-1443, March 3, 2023. EDVA at Alexandria (Ellis). VLW 023-3-107. 13 pp.
