A interview with Misty Cumbie; Will the fate of server’s tips hinge on a higher courts ruling?

Misty Cumbie

A interview with Misty Cumbie

By Ivy Ross, and Gina Deluca

Last August, in downtown Sellwood, a historic neighborhood that overlooks the Willamette river in southeast Portland, Oregon, Misty Cumbie, graciously agreed to sit down for an interview with Ivy Ross, of Wiser waitress and describe what it was like to live in her community after she challenged her employers tip pooling practices that led to the Ninth Circuit court of appeals ruling in Cumbie v. Woody Woo.  Inc.

In 2009, Misty formally worked at the Vita Café where she decided to challenge the tip pooling practice of restaurant owners Woody and Aaron Woo when she began to experience a dramatic drop in her income because of a restructured tip pool scheme that excluded all ownership of tips away from the servers.

Under the Fair Labor Standards Act, 29 U.S C. 203(M), an employer may only use an employee’s tips as partial credit against its minimum wage obligations (tip credit) or towards a valid tip pool. Misty questioned the practice when the restaurant owners decided to expand the tip pool to include back of the house workers such as cooks and other non-tipped workers that were considered ineligible under FLSA rules to participate in the tip pool.

Rather than giving the back of the house employees a raise, the owners simply redirected as much as 70% of gratuities from the tip pool to subsidize the back of the house wages; even though cooks and other non-tipped employees were earning much more than the minimum wage while front of the house wages sharply declined.

This controversial practice first caught the attention of the media in 2006 when Steve Wynn of Wynn Hotels in Las Vegas Nevada decided Managers were entitled to a portion of dealers’ tips and starting enforcing a policy that required dealers and other tipped employees, to relinquish ownership of tips and share these tips with Managers who earned a salary. The Review Journal reported that Dealers said the change cost them $20.000 decrease in wages annually and that critics argued Wynn should raise managers pay not broaden the tip pool.

Wynn later denied that he was benefiting from the practice, but a judge, determined that the 5 million per year redirected from dealers and other tipped employees was in fact a direct benefit to Wynn, who did not have to pay the salary increases.

And while Misty tried to mediate a tip pooling plan/strategy that would be fair to both the back and the front of the house, she was eventually fired. But with the full support of the U.S Department of Labor, she would continue to challenge the practice again in the higher courts.

However, in 2010, The ninth circuit court of appeals ruled in Cumbie v. Woody Woo Inc   that her employers were exempt from tip pool eligibility rules because the DOL was “silent” and didn’t specify if the tip pool requirements rules applied to employers who elected to take a tip credit or not.  Judge O’ Scannlain stated,” Naturally, she would prefer to receive all of her tips but the court ruled the labor act does not restrict tip pooling when no tip credit is taken.

The US Dept of Labor quickly responded and a year later in 2011, the DOL released its new 2011 rules to clarify that all employers, including those who do not elect to take a tip credit were also subject tip pool rules and regulations.  But In 2013, both the Nevada and Oregon US District courts held that the prior Cumbie decision prevented the DOL from enforcing its own rules and declared that the new 2011 tip credit regulations were invalid.

The enraged and newly unionized dealers pressed on.  On February 23rd, 2016, in Cesar v Wynn, the 9th Circuit court of appeals overturned US District court’s ruling and the decision was reversed and remanded.

Today, the controversial tip pooling practice continues at Wynn hotels and DOL reports on its Website on Fact Sheet #15 that the DOL is prohibited from enforcing its tip retention policy due to injunctive relief entered by the district court.  The DOL states, “The Department of Labor decided that while the injunction is in place, it will not enforce its tip retention requirements against any employer that has not taken a tip credit in the jurisdictions in the 9th circuit.”.

While the injunction is in place, Steve Wynn and the National Restaurant association can elect to appeal the 2-1 ruling by a three-judge panel of the 9th US court of Appeals or try to have the case heard in the US. Supreme Court. Ruben Garcia, UNLV Boyd Law School Professor and Labor Law expert stated, “The US Supreme Court might take the case because the panel has shown an interest in Fair Labor Standard Act Cases”.

And while it remains uncertain how many months or years will pass before the fate of servers’ tips are decided in a higher court ruling.  One thing is clear.  If restaurant workers want more say over their working conditions, there will need to be more “Mistys” in the restaurant industry who are willing to stand up, promote and protect workers’ rights to earn a living wage.   

Interview with Misty Cumbie, August, 2016 

What do you think might have been the outcome on servers’ livelihoods in states that prohibit tip credits if you had not taken a stand against this restaurant industry practice of forcing servers to share tips with non-direct service workers such as cooks and dishwashers?

I think someone else would have done what I did at some point.  I know in the 9th circuit there was a case in Nevada that followed mine that had the same contention with the tip pooling.  I believe they do take a tip credit in Nevada but I think it had to do with casinos.  I know that the Department of Labor was also thinking about that issue, I don’t think that I was the only person that had noticed that those things were happening.  So I hope that it would have come up after me.

I started working at Vita in 2009, but previously I had different kinds of work experiences and working conditions in which I felt  I was being treated poorly and unfairly.  At that point, I had just had it.  It didn’t start as something that I wanted to pursue legally, it was actually more of a collective action pursuit based on quite a few things that were happening.

I started an organization called The Portland Restaurant Workers Association, with a group of people and I actually found that group of people I found through craigslist.  Someone was putting ads up saying ‘Hey!  Are you tired of all these things?  Do you want to get together and work on some solutions around your employment in the service industry?”  And that’s kind of how it all started, how it became more active, because alone, I was just thinking about all these things, and I was just getting really frustrated, and feeling like I was just spinning my wheels a lot.  I would work somewhere and I would feel like I was being mistreated and I would quit and go somewhere else.  But the same things were happening over and over.

What were the biggest issues in this case?

The main issue was the tip pooling.  My attorney, my team, also added the break violations.  Those were the 2 things that were tagged in the class action.

All the servers at Vita signed a petition saying that they disagreed with what was happening and we appealed to the owner,  Aaron Woo repeatedly about the issue.

And essentially what was happening was all the tips were pooled and distributed based on the hours that you worked but there were more kitchen staff than there were front of the house people, and so the incentive was, I would work 6, 7, 8 hour shifts, and sometimes I would walk with about $20 in tips.  The back of the house would walk with the majority of the tips, so it was kind of contentious there.

So the tip pool was really the thing that felt unfair.  In addition to that, the kitchen staff were making way above minimum wage at the time, so they were making, with tips,  something like $22 an hour with tips and we were making minimum wage.  It started as a way of keeping labor costs down because in order to walk with a reasonable amount of your tips for the night you would have to cut people, so we would just start cutting people really really early and just work harder and harder and close by ourselves.  They didn’t have any managers or any shift leaders.  It turned into a very stressful environment.

What was it like for you to stand up against this practice?

Originally my efforts were more collective so I tried to speak with the back of the house folks, because I was friends with everybody I worked with, I had good relationships with everyone.  Some people were like “Well if you don’t like it you can leave.  This is the only place where I can work and make this much money in the kitchen.”

I apprenticed to be a chef when I was a teenager and I worked in the back of the house for a very long time until I realized I could make more money bar tending and serving.  I just got burned out.  So I understood what they were thinking and why they felt so protective over that money because they had family and they needed to make a living wage, too.

My whole idea was, if we all stick together, we can force him to raise our wages and we can do this more equitably.  It wasn’t fair, and I would try to compel them with a moral argument, “Hey, I get that you’re not making enough money.  We’re not making enough money.  The person that is making money is the person that owns this place, so we really need to hold him accountable.”

That’s what I said over and over again.  I worked with the servers in the front of the house, and we all decided, “Okay, we’re all going to sign this petition, we’re going to turn it in.  He can’t fire all of us, and then maybe he will feel compelled to do something.”  So I did get the petition signed by every person that worked in the front of the house except for 2.  I don’t think I ever got to the point where I could turn it in, because the owner, Aaron, had a meeting, and there was a suggestion box.  I wrote this letter saying “You’re breaking the law.  You need to stop it.”  I was naïve in the way that I approached it for sure, but it forced the issue.  I had been working with IWW about it and they were not very helpful and that’s a whole other story.

Anyway, they had the meeting, and the owner  decided that the person who wrote that suggestion in the suggestion box shouldn’t work there.  It was submitted anonymously, but he knew it was me.  The back of the house was mad, really mad at me.  I had a lot of people that were calling me and threatening me.

I did not feel necessarily that all of the tips should have been mine, but I didn’t want the owner to control who got tips and who didn’t.  I wanted that to be the workers’ collective decision.  He was subsidizing his staff with the tips instead of being responsible and paying a reasonable wage for the work that was being done.  That was always my issue with it.

After that I met with John Egan.  He’s in Lake Oswego.  He’s an attorney.  He had been taking on cases pro bono that were like this for a while.  It was something that I think he felt really passionately about.  It was really hard once it was in his hands to control how it went.  He had his agenda, I had mine.  I really didn’t want anyone to get hurt.  It just kind of took off from there.

What would you like the dining community to know about this case?

Ask where the tips go.  Ask how people are paid.  A lot of people, especially during the recession,  people were just working for tips.  I know several restaurants in Portland, which  I will not name, that stopped paying their workers during the recession, and  the servers were willing to work for just tips, because they couldn’t get another job.

Maybe tipping isn’t the best way of doing things.  I wrestle with that.  As a woman and a first generation college student, I grew up really poor.  Waiting tables was the only way I could make a living wage and take care of myself.

Thinking about the power differential with tipping and the restaurant industry is really important.  I don’t know how to convey that to people who are coming to restaurants per se, because they are hungry, and they want to have a good time.  It’s more of an institutional issue that should be addressed at some point.  It has more to do with inequity in general.

Can you speak a little bit more about how you feel impacted by that as a woman?

Yes, I do believe that the majority of food service workers are women, especially in the lower grossing restaurants, regular Mom and Pop shops.  When you get in to fine dining it’s a little bit different.  It becomes more esteemed, right, so what we see often with the wait staff is that men tend to inhabit those higher paying higher status jobs, whereas women are seen as ‘naturally’ desiring to serve apparently.  So you see them concentrated in those lower positions.

For me, I was a homeless youth, and my first job was in a restaurant, serving.  That was my ticket out of the situation I was in.  Without that job I wouldn’t have been able to do all of the things that I’ve done, so I feel very passionately about that being a mechanism for closing that wage gap.  There’s so much work to do around that.  If you look at the stats, a lot of the servers are single mothers.  There is no other job that I can think of aside from sex work that you can make that much money and support your family despite all of the pitfalls.

Where were you homeless?  Where are you from?

I was born in Seattle.  My parents are both from the South, so we moved to Mobile, Alabama when I was 13, but they were both addicted to drugs, so you know, that was not a safe environment for me to live in.   I moved out when I was pretty young

While working at Vita café, how much of your tips were you required to tip out to the back of the house employees?

It depended how many people were working in the kitchen.  It was like a see-saw.  There was an even split between everyone working, which often led to the majority of the tips going to the back of the house.  I would work a busy brunch and I would be responsible for doing the tip-out and I would count all the money and often give each person in the kitchen $85, $90. I would get $15.  I can’t remember exactly what the breakdown was and it changed based on how many people were working but I never got the portion that I felt I worked for.

Did these employees have to report tips to the IRS as well?

I don’t believe so.

Did this policy drastically reduce your earnings?


What do you think would be a fair amount to tip out the back of the house staff?

I think if everyone is paid the same,  it should be up to the people that are working at an establishment to decide that policy.  It shouldn’t ever be that they’re being urged or coerced into doing something.

In terms of turnover, would that be re-evaluated every time a new employee came on board, or what would you suggest….

It could be re-evaluated quarterly or yearly.  The turnover is an issue because of the economic factor and the way people are treated.  People would stay if it were more equitable and if they had a say in how things were.  It’s not just about tips.  There are so many other issues that happen where you don’t have any control over the conditions you are working in.

What was minimum wage in 2009 when this all went down?

$7.25 or so.

In other states that allow a tip credit, employers sometimes illegally force servers to also subsidize back of the house wages, which is worse in your opinion, receiving a sub-minimum wage of $2.13 an hour plus tips or receiving full minimum wage but no control over tips?

There’s not a good answer for that.  It’s unfortunate that the tipped minimum wage is so low.  I know that it’s being held down by the restaurant association and that’s been going on for 20 years now.  I remember sometimes I would work and that’s all I would make.

That’s like asking if you want to cut your ear off or arm off, I’m not really sure which one is better.  I wish things were different.  The premise is what we need to be addressing, not the symptoms.

On Feb 23rd,  2016, the ninth court of appeals ruled to uphold the US Dept. of labor right to promulgate a rule under sec 203m that enforces tip pooling restriction that includes tipped employees who receive full minimum wages.  The National restaurant association wants to challenge this decision and wants the Supreme Court to hear the case. What do you think the impact will be if the 9th circuit’s decision is overturned and employers are allowed to force waiters to subsidize the back of the house wages?

I think that will uphold the status quo as it was after my case.  I think a lot of it has to do with casinos, actually.  What I’ve noticed is that the restaurants and casinos that are multi-national companies or at least national conglomerates are watching heavily because what they could do is subsidize the back of the house with tips and that would lower their overall overhead.

I’m not sure what’s going to happen.   I hope somebody would bring another case.  The Department of Labor fully agrees with the side of servers controlling the flow of tip money.  A lot of things could happen.  Perhaps they will sue the Department of Labor again.  After they changed the statute when the ruling happened in my case, the Restaurant Association did sue the Department of Labor to try to stop that change.  It was kind of amazing to have that support from them.   Some of them flew here from DC and provided an amicus brief  on my behalf.  Which, to me, felt really supportive, and I didn’t feel supported at the time.  I couldn’t get a job.  It was during the recession, and I thought “What did I just do to my life?”

If they overrule this most recent  ruling in my favor and in servers’ favor, I hope someone else brings another case and keeps pushing for that.

Do you think Restaurant operators will be able to recruit talented servers under a tip pooled policy that includes back of the house?

I do feel like they could if it’s worth their while to do so.  I think that in general the US is moving towards a more service-based economy, service and tech, so a lot of people are going to want those jobs, especially now with the niche markets in the food industry: natural wine; organic foods.  There’s so much going on that’s really exciting and I do feel like people want to be part of that.  So I don’t know if that desire will be diminished.

I think it really does go back to the control of the workspace itself and how people want to work together.  There’s always been a divide between the front of the house and the back of the house, and I do think it has to do with money because it sucks to work all night as a line cook for $11 an hour and half to do it over and over and over again with no benefits.

$11 an hour.  That’s about what I made when I worked full-time in Social Work.

Me, too.  I ran a domestic violence shelter before I came here for 2 years and back of house workers make more money than I did at that job, and I was in a supervisory position

How do you think tensions could be resolved between front of the house and back of the house related to wages and tips?

Having more control over work conditions and providing those opportunities for having those discussions where everybody can buy in on a solution instead of it being a constant conflict. …. and they didn’t just prioritize money over individual happiness and safety.  And it is unfortunate that we tie benefits to employment.  Before Obamacare was passed you couldn’t get health care benefits.  It was really difficult if you worked at a smaller establishment.  There’s still a persistent thing, where all of your benefits are tied to employment.

Historically, these kinds of jobs just don’t provide that, no health care, sick days, vacation days things like that.

In your experience, did you find that other servers in the industry supported your efforts?

Not the people that I worked with so much.  I think some people understood it.

I know the people at the back of the house at Vita felt betrayed by me, because I had a lot of conversations with them about how I understood why they were doing what they were doing, I was just asking them to think about it differently.  I think the way that everything went down it seemed like I didn’t care about them.  The front of the house people didn’t say anything, but a lot of them benefitted from it,  immediately.

During the day there was one server, for breakfast, and that one server was the same person pretty much every day.  She was the one person up front, and there were 5 people in the back, and so all of the tips went to the back of the house, and she would work really really hard all day long and then make 30 or 40 dollars.

By the end of it, after everything went down, she was taking the majority of the tips home, and they were getting like 20% of the tips, which is more reasonable.

It’s easier to blame the person pointing out the problem than it is to blame the person that’s responsible for it.

So I think a lot of people rallied behind the owner of the restaurant.  I got phone calls, I was walking down the street and people were yelling at me, telling me to fuck off.  That was rough.  I got fired from another job because of it.  I was working behind the bar.  The owner of Vita walked in, saw me, walked out, and I got fired the next day.

Even now when you google my name that’s all that comes up

In the beginnings my co-workers were more supportive, but once it got into the legal stuff, they had to protect their jobs.  They didn’t want to feel like they were in the conflict.  It was easier to just let someone that’s not there take the fall.

There were people outside that were also working in restaurants that were supportive.  The friend that I started The Portland Restaurant Workers’ Association with, he was really supportive, and I had other people around me that were supportive, but I don’t think that when I started doing it I understood the impact it would have on my life, and how far it would go.

I had no idea that it would make it to the 9th circuit court of appeals.  I had no idea.  I was just kind of like “I want him to stop doing this.  I don’t want to quit this job and go to another job and have the same thing happen again.  I am tired of being treated this way.  I was fed up.  I’d had enough.”

Now Misty is the Operations Manager at the fantastic Either/Or Cafe in Sellwood.  I asked her what her vision is for her future.

That’s a good question.  I went back to school and started a degree in Sociology that I finished at Portland State University.  When I graduated I got the job at the shelter.  In general I lean toward Social justice-y things.  I got a little burnt out on working at the non-profit.  I’m re-evaluating.  I’m  really interested in project management but I also make perfumes on the side.  I have a lot of weird things that I’m doing.

I thought about grad school.  I’ll probably end up doing something that’s related to social justice.  It’s a value that I have so I feel strongly inclined to go in that direction.

Do you ever think about doing law or policy around that?

I thought about public policy.  I was looking at Brandeis for a while, especially after I graduated.  I am so tied to this city that I don’t want to leave.

Portland State has a policy program, so I could do that.  I’m almost ready to explore the option.  I definitely feel that pull in that direction.  I’ve always been like that, very vocal about things that I disagree with.  I think that it’s important to be compassionate also.  That’s one thing I learned from this whole thing.  My perspective isn’t necessarily the right perspective, but it was important to me.

There were a lot of people that I met during that time where I was doing the Portland Restaurant Workers Association that didn’t have the same power that I did.  They were undocumented, and they would try to get their money when they weren’t getting paid.  They were working the front of the house and the owner would take all of the tips, and nobody could get them.  They would say, “If you don’t like it, we’ll call ICE.”  So they were kind of captive in this way.  More of that happens than we think, and those people, they can’t say the stuff that I can say.  There were a lot of situations like that.

That quality that you have, being able to speak out, stand your ground…where does that come from?

I don’t know.

My brother and I are very similar.  We are both the only ones who made it out.  We have cousins that are incarcerated.  Our parents are both incarcerated.  We’re both like “I don’t know what happened.”

My Mom was really outspoken.   I think living in the South, too, was transformative.  It was really difficult when I first moved there, being a northerner.  I saw a lot of things that I was really surprised about.  The oppression there around race, class, and gender really is very stark.  You can see it.  It’s palpable.  Here, we have better laws, and at least there’s a goalpost.  We’re moving towards this thing.  It’s not perfect, but we’ve all agreed collectively, well, most of us,  that that’s where we want to go.  There, that’s not the goal.  Being there shook me up and sparked that sense of indignity that I have about things being unfair.  I always have that sense of “This isn’t fair”.  I feel empathetic towards people who have to endure situations that are not fair.

Any closing thoughts?

This has been a lesson.  If you get stuck in “Why did this happen to me, I don’t understand,” and you don’t get to the point where it’s that gift or lesson, you can’t be the advocate, you know you have to come out on the other side.

To be honest, that time of my life was very hard.  I didn’t have any money, I have a heart condition, and I didn’t have health insurance.  I didn’t have health insurance for years because I was in the industry.

I didn’t have a higher education, a degree, and so it was hard for me to even think about getting a job in an office.  To me that was this foreign land, that I didn’t even understand.  I didn’t know anybody that did that, my parents didn’t do that kind of work, so to me it was out of reach.

And I thought that the service industry was really the only thing I could do.  I was good at it, and it felt comfortable.  After I went to school and pushed myself to do something else I felt better about that and then I got health insurance, which was awesome.

Currently, the US Dept. of Labor is prohibited from enforcing its tip retention policy  due to injunctive relief entered by the district court until the 9th Circuit issues its mandate, which formally notifies the district court of the court’s appeals decision.  Steve Wynn and the National Restaurant association can  elect to appeal the 2-1 ruling by a three judge panel of the 9th US court of  Appeals. The Department of labor decided that while the injunction is in place, it will not enforce its tip retention requirements against any employer that has not taken a tip credit in jurisdictions in the  9th Circuit.  The ninth circuit has appellate jurisdiction over the states of California, Nevada, Washington, Oregon, Alaska, Idaho, Montana, Hawaii, and Arizona; Guam: and the Northern Mariana Islands. 


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