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Burt v. Rackner, Inc.

Supreme Court of Minnesota

October 11, 2017

Todd Burt, Respondent,
v.
Rackner, Inc. d/b/a/ Bunny's Bar & Grill, Appellant.

         Court of Appeals Office of Appellate Courts

          Andrew L. Marshall, Mark R. Bradford, Christine E. Hinrichs, Bassford Remele, P.A., Minneapolis, Minnesota, for respondent.

          Sarah E. Bushnell, Jeffrey M. Markowitz, Colin S. Seaborg, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, Minnesota, for appellant.

          Matthew A. Frank, Nichols Kaster, PLLP, Minneapolis, Minnesota; Frances E. Baillon, Baillon Thome Joswiak & Wanta LLP, Minneapolis, Minnesota; and Brian Rochel, Doug Micko, Teske Micko Katz Kitzer & Rochel, PLLP, Minneapolis, Minnesota for amicus curiae National Employment Lawyers Association, Minnesota Chapter.

          Bruce J. Douglas, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Minneapolis, Minnesota; Joseph G. Schmitt, Peter D. Gray, Veena A. Iyer, Nilan Johnson Lewis, P.A., Minneapolis, Minnesota; and Alec J. Beck, Ford & Harrison LLP, Minneapolis, Minnesota, for amicus curiae Minnesota Management Attorney's Association.

          John C. Hauge, Meggen E. Lindsay, Brandon J. Wheeler, Felhaber Larson, Minneapolis, Minnesota for amicus curiae Minnesota Restaurant Association.

         SYLLABUS

         1. An employer violates Minn. Stat. § 177.24, subd. 3 (2016), when it terminates an employee for refusing to acquiesce in the employer's requirement to share gratuities.

         2. The Minnesota Fair Labor Standards Act, specifically Minn. Stat. § 177.27, subd. 8 (2016), expressly provides a private cause of action for an employee who is discharged for refusing to acquiesce in an employer's requirement to share gratuities.

         Affirmed.

          OPINION

          HUDSON, Justice.

         Appellant Rackner, Inc. d/b/a Bunny's Bar & Grill challenges a court of appeals' opinion reversing the dismissal of respondent Todd Burt's complaint alleging a violation of the Minnesota Fair Labor Standards Act (MFLSA), Minn. Stat. §§ 177.21-.35 (2016), for Rackner's decision to terminate him for "not properly sharing his tips." The issue presented is whether the MFLSA provides a private cause of action for an employee who is discharged for refusing to share gratuities. Because the plain language of Minn. Stat. § 177.27, subd. 8, expressly provides such a cause of action, we affirm.

         FACTS

         Rackner employed Burt as a bartender from January 2007 to July 2014. In December 2014, Burt sued Rackner, claiming that Rackner terminated his employment in violation of Minn. Stat. § 177.24, subd. 3, which prohibits an employer from requiring an employee to contribute or share a gratuity received by the employee. The complaint alleged the following. At some point before the termination, Burt was told "that he needed to give more of his tips to the bussers, and that there would be consequences if that did not happen." Burt did not follow this directive. On July 21, 2014, Burt met with the co-owners of Rackner, who informed Burt that "he was being terminated because [he] was not properly sharing his tips with other staff." After the termination, Burt was "unable to find other employment."

         Rackner answered the complaint and moved for judgment on the pleadings. The district court dismissed the complaint, concluding that the MFLSA "does not contemplate an action for wrongful discharge" because the statute does not contain specific language prohibiting an employer from discharging an employee for refusing to share tips. Relying on our decision in Dukowitz v. Hannon Sec. Servs., 841 N.W.2d 147 (Minn. 2014), the district court stated that "if the Legislature had intended for employees [to] be able to sue for wrongful discharge, it would have included that language explicitly in the MFLSA." Absent language to that effect, the district court refused to recognize a wrongful-discharge cause of action.

         The court of appeals reversed, concluding that the MFLSA "unambiguously provides that the employee may seek wrongful-discharge damages, including back pay and other appropriate relief as provided by law." Burt v. Rackner, Inc., 882 N.W.2d 627, 628 (Minn.App. 2016). The court of appeals noted that Minn. Stat. § 177.27, subd. 8, unambiguously provides that "[a]n employee may bring a civil action seeking redress for a violation . . . of sections 177.21 to 177.44, " which "broadly applies to any violation of the MFLSA, including a violation of [the tip-sharing provision in MFLSA]." Burt, 882 N.W.2d at 631-32. The court of appeals further observed that "[t]he statute also broadly permits a wronged employee to 'seek damages and other appropriate relief . . . as otherwise provided by law.' " Id. at 632 (quoting Minn. Stat. § 177.27, subd. 8). Accordingly, the court concluded that Burt's complaint "states a claim upon which relief can be granted" and remanded to the district court for further proceedings. Id. at 631, 633.

         We granted Rackner's petition for review and the amicus motions of the Minnesota Restaurant Association, the Minnesota Chapter of the National Employment Lawyers Association, and the Minnesota Management Attorney's Association.

         ANALYSIS

         On appeal from a grant of a motion for judgment on the pleadings under Minn. R. Civ. P. 12.03, we "consider only the facts alleged in the complaint, accepting those facts as true and drawing all reasonable inferences in favor of the nonmoving party." Zutz v. Nelson, 788 N.W.2d 58, 61 (Minn. 2010). We review a district court's decision on a Rule 12.03 motion de novo to determine whether "the complaint sets forth a legally sufficient claim for relief." Id. (quoting Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn. 2003)). Whether a statute provides a private cause of action also presents a question of statutory interpretation that we review de novo. Larson v. Nw. Mut. Life Ins. Co., 855 N.W.2d 293, 301 (Minn. 2014).

         At issue is whether the MFLSA provides a cause of action for an employee who is terminated for failing to share gratuities. Rackner argues that the MFLSA does not provide such a cause of action because (1) although the statute prohibits an employer from requiring an employee to share gratuities, it does not prohibit an employer from discharging an employee who refuses to do so, and (2) the statute does not contain any language that specifically allows an employee to sue for wrongful discharge in the context of tip sharing. By contrast, Burt contends that he may sue under the MFLSA because an employer violates Minn. Stat. § 177.24, subd. 3, when it discharges an employee for refusing to share tips, and Minn. Stat. § 177.27, subd. 8, allows an employee to sue for any violation of the statute, including a violation of Minn. Stat. § 177.24, subd. 3.

         We agree with Burt, and hold that the language of the MFLSA expressly provides a cause of action for an employee who is terminated for failing to share tips. We consider each of Rackner's arguments in turn.

         I.

         Rackner first contends that Burt does not have a claim under the MFLSA because, although Minn. Stat. § 177.24, subd. 3, forbids an employer from requiring employees to contribute or share gratuities, it does not prohibit employers from terminating employees who refuse to share tips. Rackner also maintains that Burt was not harmed by the requirement to share tips because he did not lose any tips; "indeed, the act of terminating [Burt] deprived [Rackner] of the power to compel, require, or coerce him to do anything." We disagree.

         "The first step in statutory interpretation is to determine whether the statute's language, on its face, is ambiguous." Christianson v. Henke, 831 N.W.2d 532, 536 (Minn. 2013) (citation omitted) (internal quotation marks omitted). "A statute is only ambiguous if its language is subject to more than one reasonable interpretation." Id. at 537. In interpreting a statute, we give words and phrases "their plain and ordinary meaning." In re Welfare of J.J.P., 831 N.W.2d 260, 264 (Minn. 2013).

         Minnesota Statutes § 177.24, subd. 3, provides, in relevant part: "No employer may require an employee to contribute or share a gratuity." (Emphasis added.) The provision also states that although an employee may voluntarily agree to share gratuities, the agreement "must be made by the employees without employer coercion or participation." Id. (emphasis added).

         The parties agree that this provision is unambiguous. And as Burt correctly states, to "require" means "[t]o impose an obligation on." The American Heritage Dictionary of the English Language 1492 (5th ed.); see, e.g., Larson v. Nw. Mut. Life Ins. Co., 855 N.W.2d 293, 301 (Minn. 2014) ("We construe nontechnical words and phrases according to their plain and ordinary meanings and we often look to dictionary definitions to determine the plain meanings of words.") (citation omitted) (internal quotation marks omitted). In everyday language, threatening to terminate an employee for failing ...


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