As reasoned by the Court, plaintiff’s theory of recovery conflicted with the U.S. Supreme Court’s decision in Williams v. Jacksonville Terminal Co., 315 U.S. 386, 397 (1942), which established a presumption that an arrangement to redistribute tips is valid, as well as the plain language of Section 203(m), which precluded the use of a pool including non-customary tipped employees only where the employer claimed a “tip credit” (i.e. a provision of Section 203(m) which enables an employer to pay tipped employees an hourly wage of $2.13 so long as the employer makes up the difference at any time the tip wages are incapable of meeting Federal minimum wage):
Cumbie argues that under section 203(m), an employee must be allowed to retain all of her tips--except in the case of a "valid" tip pool involving only customarily tipped employees--regardless of whether her employer claims a tip credit. Essentially, she argues that section 203(m) has overruled Williams, rendering tip-redistribution agreements presumptively invalid. However, we cannot reconcile this interpretation with the plain text of the third sentence, which imposes conditions on taking a tip credit and does not state freestanding requirements pertaining to all tipped employees. A statute that provides that a person must do X in order to achieve Y does not mandate that a person must do X, period.
If Congress wanted to articulate a general principle that tips are the property of the employee absent a "valid" tip pool, it could have done so without reference to the tip credit. "It is our duty to give effect, if possible, to every clause and word of a statute." United States v. Menasche, 348 U.S. 528, 538-39 (1955) (internal quotation marks omitted). Therefore, we decline to read the third sentence in such a way as to render its reference to the tip credit, as well as its conditional language and structure, superfluous.Slip Opinion, at 2893-94.
The Court concluded that plaintiff could not state a legally viable claim under Section 203(m), as her employer did not take a tip credit:
Here, there is no question that Woo's tip pool included non-customarily tipped employees, and that Cumbie did not retain all of her tips because of her participation in the pool. Accordingly, Woo was not entitled to take a tip credit, nor did it. See Richard v. Marriott Corp., 549 F.2d 303, 305 (4th Cir. 1977) ("[I]f the employer does not follow the command of the statute, he gets no [tip] credit."). Since Woo did not take a tip credit, we perceive no basis for concluding that Woo's tippooling arrangement violated section 203(m).Slip Opinion, at 2894.