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U.S. SC Should Be Tempted to Review DOL's Tip-Pooling Rule

9.29.16

The article, “U.S. SC Should Be Tempted to Review DOL's Tip-Pooling Rule,” featured on Legal NewsLine, discussed how the U.S. Court of Appeals for the Ninth Circuit recently refused to rehear a case regarding a controversial tip-pooling regulation, a win for tipped employees and a blow to businesses in the restaurant and hospitality industry.

Rochelle Nelson weighed in on the judges’ response to the case.

She said it’s interesting and indicative of the deep divisions within the Ninth Circuit regarding how judges responded.

“Judge Dean Pregerson declined to give much more than a nod to another Ninth Circuit panel’s earlier decision in Cumbie,” Rochelle told Legal Newsline

“He merely notes that Cumbie pointed out a silence within the FLSA and that the DOL properly exercised its authority in interpreting the FLSA when it created the 2011 regulation to fill that void. 

"Otherwise, the case was as simple as finding that the agency acted within its rulemaking authority in that its interpretation was reasonable, and therefore, should be accorded Chevron deference.

Rochelle said the dissent may prompt the U.S. Supreme Court to accept a request to review the issue.

“With such a significant number of dissenting judges joined by some legal heavyweights like Diarmuid O’Scannlain and Consuelo Callahan, the Supreme Court may very well be interested in taking this case,” she said. 

“It also creates a circuit split, deviating from the Fourth Circuit’s 2015 decision on the same issue. O’Scannlain wrote the Cumbie decision that the Perez decision ignores.”

"The ruling upsets the rule of orderliness. This rule is a version of stare decisis that binds the panels within the Ninth Circuit to honor earlier panel decisions, even where one panel happens to fiercely disagree with an earlier decision. 

"The rule is designed to maintain continuity within the circuit. From the dissenter’s perspective, the panel in Perez simply ignored the requirement.”

 To read the full article, please visit Legal NewsLine.

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