Cumbie v. Woody Woo, Inc., No. 08-35718, was a Fair Labor Standards Act (FLSA) action claiming unpaid wages. The district court dismissed the complaint.
As the court of appeals wrote: "[Defendant] Woo required its servers to contribute their tips to a "tip pool" that was redistributed to all restaurant employees. The largest portion of the tip pool (between 55% and 70%) went to kitchen staff (e.g., dishwashers and cooks), who are not customarily tipped in the restaurant industry. The remainder (between 30% and 45%) was returned to the servers in proportion to their hours worked."
The Ninth Circuit affirmed on the ground that the restaurant did not violate the FLSA when, despite paying a cash wage greater than the minimum wage, it required its wait staff to participate in a "tip pool" that redistributed some of their tips to the kitchen staff. As noted by the court, "nothing in the text of the FLSA purports to restrict employee tip-pooling arrangements when no tip credit is taken".