Dec 6 (Reuters) - A U.S. Supreme Court ruling that

limited federal agencies' rulemaking powers had no effect on a

decades-old regulation involving the proper way to pay workers

who receive tips, a federal judge in Colorado has ruled.

U.S. District Judge William Martinez in Denver on Thursday

said that even though the high court's June ruling in Loper

Bright Enterprises v. Raimondo led an appeals court to strike

down a 2021 U.S. Department of Labor rule, the agency's similar

non-binding guidance from 1988 was still valid.

The court in Loper Bright eliminated the doctrine known as

Chevron ( CVX ) deference, which was named for a 1984 case and had

directed courts to defer to agencies' reasonable interpretations

of ambiguous laws.

Martinez denied a motion by Perry's Restaurants, which

operates 26 restaurants in eight states, to dismiss a proposed

class action claiming it should have paid servers the standard

minimum wage, rather than the lower minimum for tipped workers,

when they spent more than 20% of their time on non-tipped tasks

such as cleaning and food preparation.

Perry's had argued that the so-called "80/20 rule" first

established by DOL in the 1988 guidance and adopted as a formal

rule in 2021 no longer applied to the case. The New

Orleans-based 5th U.S. Circuit Court of Appeals in August

blocked the 2021 rule nationwide, saying DOL's reading of

federal wage law was no longer owed deference after the Supreme

Court ruling in Loper Bright.

But Martinez on Thursday said that because the 1988 guidance

interpreted a different 1967 DOL regulation, rather than federal

law itself, it was covered by a separate doctrine known as Auer

deference.

"Auer was not discussed, let alone analyzed, in Loper

Bright, and federal courts in this Circuit have continued to

apply it," wrote Martinez, an appointee of Democratic former

President Barack Obama.

Houston-based Perry's did not immediately respond to a

request for comment on Friday.

Drew Herrmann, a lawyer for the named plaintiffs, said the

decision highlights the enduring importance of agency expertise

in interpreting federal law even after Loper Bright.

"The Court also reinforced the need for clear and consistent

interpretative guidance in wage and hour law, particularly in

areas as nuanced as the tip credit rules," Herrmann said in an

email.

The Loper Bright decision was widely seen as a major blow to

agencies' rulemaking authority and a significant victory for

conservative critics of the "administrative state." But like

Martinez, many federal judges have subsequently leaned on other

legal doctrines in upholding agency regulations.

DOL and supporters of the 80/20 standard say it is necessary

to ensure that workers are not exploited by being paid the

tipped minimum, which is currently $2.13 an hour under federal

law, when they are not earning tips.

But business groups say it is difficult to track the amount

of time workers spend on individual tasks and that the 80/20

standard is too stringent.

DOL during the Trump administration had attempted to wipe

out the 1988 guidance, saying in a 2018 opinion letter that

non-tipped duties performed contemporaneously with tipped tasks

do not require the higher standard minimum wage. Multiple courts

said the opinion letter was invalid.

The case is Green v. Perry's Restaurants Ltd, U.S. District

Court for the District of Colorado, No. 21-cv-0023.

For the plaintiffs: Drew Herrmann and Pamela Herrmann of

Herrmann Law; Harold Lichten and Matthew Thompson of Lichten &

Liss-Riordan

For Perry's: Lionel Schooler, Jamila Brinson, Jaclyn Staple

and Michael Drab of Jackson Walker; Allison Dodd and Gregory

Carter of Messner Reeves

Read more:

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