USCA1 Opinion

July 31, 1992

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_____
No. 91-2213.
LYNN MARTIN, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,
Plaintiff, Appellant,
v.
TANGO'S RESTAURANT, INC., ET AL.,
Defendants, Appellees.
___________
ERRATA SHEET
The opinion of this
amended as follows:

Court issued on July 20,

On page 10, section heading

1992, is

"II" should be changed

to

"III".
On page

18, section heading "III" should be changed to

"IV".

July 20, 1992

____________________
No. 91-2213
LYNN MARTIN, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,

Plaintiff, Appellant,
v.
TANGO'S RESTAURANT, INC., ET AL.,
Defendants, Appellees.
____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO
[Hon. Jose Antonio Fuste, U.S. District Judge]
___________________
____________________
Before
Cyr, Circuit Judge,
_____________
Roney,* Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
____________________

Lauriston H. Long, Attorney, U.S. Department of Labor, with w

_________________
Marshall J. Breger, Solicitor of Labor, Patricia M. Rodenhaus
____________________
______________________
Regional Solicitor, Monica Gallagher, Associate Solicitor, and Will
________________
____
J. Stone, Counsel for Appellate Litigation, U.S. Department of Lab
________
were on brief for appellant.

Wallace Vazquez Sanabria for appellees.

________________________
____________________
____________________
_____________________
*Of the Eleventh Circuit, sitting by designation.
BOUDIN,
brought suit

Circuit Judge.
______________
under the

("FLSA" or "the

Fair Labor

Act"), 29 U.S.C.

corporation and its owners

redress

The

violations of

the

Secretary

Standards

of Labor

Act of

1938

201 et seq., against a

________

("the defendants") to enjoin and

statute.

After

a trial,

the

district court awarded some but not all of the relief sought
by the Secretary.
On one
district

The Secretary seeks review on two issues.

of them, we agree with the Secretary and reverse the

court; and

on the

other, we

remand

for further

proceedings.
-2-

I. BACKGROUND
Tango's Restaurant, Inc. ("Tango's"), is

a corporation

conducting a

restaurant business in Hato

Rey, Puerto Rico.

Its president is Jorge Carcavallo, who manages the

together

with his wife,

Vilma Carcavallo, the restaurant's

secretary, treasurer and office manager.

the

business.

The

Secretary,

enforcing the

FLSA, conducted

and concluded

that Tango's

and

failing

to pay

compensation.
in

the

this

of violations,

wages

naming

the

for

Tango's

inaccurate records

and required

overtime

Secretary brought suit

corporation and

both

Although the complaint charged a

only two

appeal, and the facts

responsible

an investigation of

On June 11, 1991, the

district court,

Together, they own

who is

was keeping

minimum

Carcavallos as defendants.
number

business

episodes are

set forth below

pertinent to
are limited to

those episodes.

In the district

court, the Secretary

sought back

pay

and liquidated damages for the waiters at Tango's, asserting

that they had not been
U.S.C.

paid the minimum wage (FLSA

206) or required overtime compensation.

29 U.S.C.

207.

fact

and

FLSA

7,

After extensive discovery, a six-day trial

was held before the district judge.

district court

6, 29

On July 31, 1991,

entered judgment, together with

conclusions

of

law, granting

-33

the

findings of

extensive

relief

against defendants but not

Secretary.

all of the relief sought

The relief granted included, as

provided by the

Act, awards of back

pay and liquidated damages for

the waiters.

16, 29 U.S.C.

The

FLSA

district

court

ruled

by the

most of

216.
that

15

of

the

waiters

(together with seven other former or present employees) were

entitled to $51,880.68

in back

statutory liquidated damages.

books reported
week at

been

like amount

The court found that

these waiters as

an hourly

waiters had

pay, and a

working a uniform

rate of

$2.95 per

paid this

amount

hour.

in

Tango's
40 hour

Although the

by Tango's,

they

had

generally worked six days a week and had averaged 53 hours a

week.
the

Further, under
time of

their employment

6(a)(1), (c)(1)(B),
"time and a half"
excess

the Act the minimum wage in

29 U.S.C.

was $3.35

per hour

waiters had also

(FLSA

206(a)(1), (c)(1)(B)), with

the employee's regular rate for

of 40. FLSA

force at

7(a)(1), 29 U.S.C.

averaged about

hours in

207(a)(1).

The

each in

tips

$66 per day

which they pooled, divided, and retained.

The

district

court

held,

over

the

Secretary's

objection, that

the defendants

were

entitled to

portion

tips received

by the

waiters as

of the

treat

a credit

against

the

compensation
credit"

defendants'

minimum

obligations.

under certain

The

Act

wage

and

permits

overtime

such a

conditions, including

"tip

a requirement

-44

(described
FLSA
that

more fully

3(m), 29

below) of

U.S.C.

203(m).

the notice requirement had

allowed the defendants to

hour for both
This

the employees.

The district
been met in

court found
this case and

take a tip credit of 40 cents per

the minimum wage

credit eliminated

notice to

and overtime

any underpayment

compensation.

for the

first 40

hours ($2.95 + 40 cents = $3.35) and reduced the defendants'

liability for overtime hours and liquidated damages.
The district court declined to order any back pay award
for Manuel Santiago,
manager of

other

who acted both as a waiter

waiters.

Tango's books as working a 40

In fact he

was paid not

Santiago was

and as the

also carried

hour week at $2.95 per

only the book

figure of $118

on

hour.
per

week (40 x $2.95) but an additional off-book payment of $200

per week,

regardless of hours

judge found
to

actually worked.

that Santiago's hours of work

week but averaged 58 hours a week.

on the same basis as the

ruled that

compensated him

of

varied from week

Santiago shared tips

other waiters.

Santiago's wages

The trial

$318 per

The district court

week

adequately

for his 58 hours of work, and it added that

he was in any event an involuntary plaintiff and responsible

for the illegal practices that led to the case.
This
contends

appeal followed.
that no

In

tip credit

this court,

should have

the Secretary

been allowed

in

-55

computing

liability to

the waiters

and that

Santiago was

entitled to an award for uncompensated overtime.

II. THE TIP CREDIT
A

stranger

to

the

FLSA

might

suppose

that,

in

determining an employer's minimum wage obligations, the tips

regularly received and retained by an employee either
be

treated as

wages

paid

by

the

employer

or,

would
in

the

alternative,

would

be

wholly

ignored.

legislative compromise, Congress chose

partial
met.

At

tip credit if, but

the time of

Instead,

in

to allow employers a

only if, certain conditions are

the employment in this

case, section

3(m) of the Act provided that in computing minimum wages the

employer

could

treat as

actually

received

by

wages paid
the

by the

employee

up

employer tips
to

"an

amount

determined by the employer but not . . . in excess of 40 per

centum of the
203(m) (1982).

applicable minimum

wage."

Section 3(m) also

See
___

29 U.S.C.

provided, however,

that

this tip credit provision would not apply unless

"(1) such employee has been informed by the
employer of the provisions of this subsection, and
(2) all tips received by such employee have been
retained by the employee [except that pooling of
tips among tipped employees is permitted]."
In
waiters

this

case, the

who testified

them nothing

about

Secretary
uniformly

either

intention to treat tips as

the

called

at trial

that defendants
minimum

wage

wages under the Act.

-66

or

eight

had told
Tango's
Jorge and

Vilma Carcavallo each testified at trial, as did the waitermanager Santiago, but none of
waiters

tip

The Secretary's compliance officer allowed a 40

credit

in

his

investigative

Secretary tells us that this

prior

to

the

waiters'

report,

but

testimony

in part on an

and

that

was told that Tango's

each

utilized a tip credit against

minimum wage obligations.

affidavit was

the

affidavit of Vilma

Carcavallo, asserting that at the outset of employment

waiter

the

was a tentative allowance made

trial

compliance officer relied

its

the

had been notified of either the minimum wage or the

tip credit.
cent

the three testified that

We are further told that the

not offered at trial nor did Vilma Carcavallo

repeat this assertion in her testimony.

The

trial judge

were told
against
waiters.
denial

that the
its

nevertheless found that

restaurant would

obligations

The court
of notice

to

credible because

offered many jobs at the

that

the

utilize a

minimum

said that it did not

likely to accept employment

stressed

pay

"the waiters
tip credit

wages"

employees would

minimum wage of $3.35.

had

the

find the waiters'

at $2.95 an hour when

waiters

to

received

not be
San Juan

The court

and

retained

substantial tips and that the compliance officer had allowed

the tip credit on the first 40 hours of work.
contends that
had been given.

the trial court

erred in ruling

We agree with the Secretary.

The Secretary
that notice

-77

Section 3(m) requires

that

the

employee

be

as a condition of the tip credit

informed by

the

provisions of this subsection . . . ."

of

section

against

the

3(m) allow

an employer

employer's

minimum

amount to be determined by
limitations.
least

wage

"of the

The core

provisions

take a

tip credit

obligations, in

an

the employer, subject to certain

We read section

notice to

to

employer

employees of

3(m) to require

at the very

the employer's

intention to

treat tips as satisfying part of the employer's minimum wage

obligations.
example,

It could easily

notice

of "the

be read to require more--for

amount .

. determined

by the

employer" to constitute wages--but how much more need not be

decided in this case.
As

the

finder of

fact,

reversed only where a finding

R. Civ. P. 52(a);
573

(1985).

the

district

judge may

is "clearly erroneous."

be
Fed.

Anderson v. Bessemer City, 470 U.S. 564,

________
______________

As the

record

stands,

we

are pointed

substantial, uniform testimony that the minimum wage or

to
tip

credit

was never mentioned to

the waiters but

cited to no

evidence that Tango's gave its waiters any notice of either.

The inference

that notice

judge, seems to us

was given,

to be faulty.

to work for wages of $2.95,

other available jobs,
expected

to earn

The

drawn

by the

trial

waiters' willingness

where $3.35 might be earned

might be some proof

and retain

their tips,

in

that the waiters

but it

does not

-88

suggest even mildly

minimum

that the waiters

wage laws or

knew anything of

defendants' intention to

the

claim a tip

credit against their obligations.

As for the investigating officer, he testified at trial
that
and

no notice of

the tip credit was

"no one [among the waiters] even knew what a tip credit

meant";

that

in making

allowed

a 40

cent tip

hours

given to the waiters

a week;

and

that

his

calculations he

credit for
he did

nevertheless

each waiter's
so

not because

first 40
the

law

warranted it but because the tips were actually paid and the

officer thought a
testimony
that

tip credit "would

be more fair."

plainly undercuts, rather

notice

was given.

Cases

This

than supports, a claim

are ordinarily

decided in

accordance with the evidence presented at trial.

Defendants

have provided no reason or

by its agent's generous

precedent to bind the government

impulse to be "fair" in

making his

computations.
We have considered
their

prejudice

by

the

whether defendants
Secretary's

were misled

change of

to

position.

Prior to trial the Secretary said that she did not challenge
the tip credit as applied to the waiters' first 40 hours but
only as applied
Secretary

to their overtime

compensation.

When

the

altered her position after trial, in light of the

evidence, defendants

made no claim

that they had

proof of

notice which they had not offered at trial, nor do they make

-99

such a claim now.

issue in

the trial

Further, notice of the tip

(because

claim), so defendants had

of the

credit was at

Secretary's

overtime

ample reason to offer what

proof

they had, and they apparently offered none.

It may at first seem

odd to award back pay against

employer, doubled by liquidated damages, where the

employee

has actually received and retained base wages and tips

together amply

satisfy the minimum wage

that

requirements.

Congress has in section 3(m) expressly required notice

condition of

the tip

that requirement.
303, 305

credit and

See Richard
___ _______

(4th Cir.),

the courts have

433

U.S. 915

Yet
as a

enforced

v. Marriott Corp., 549

______________

cert. denied,
____________

an

F.2d

(1977);

Bonham v. Copper Cellar Corp., 476 F. Supp. 98, 101-02 (E.D.

______
___________________
Tenn. 1979);

Donovan
_______

v. 75 Truck Stop Inc., 92 Lab.

___________________

at 44,091

(M.D. Fla. 1981).

Cas.

(CCH)

34,071,

It does

not

matter

in this case (although it might were the adequacy of

a specific notice in issue) whether Congress deemed notice a

matter
minimum

of fairness to the employee,

wage

payments,

or both.

omitting notice appears harsh, it

a device for enforcing

If

the penalty

is also true that

for

notice

is not difficult for the employer to provide.

Accordingly,

on

this

issue we

reverse

the district

court and remand so that the court can recompute defendants'

liability to the waiters with no tip credit allowed.
III. SANTIAGO

-1010

In the
pay

district court, the Secretary

for Santiago to

trial judge found

week.

reflect his

also sought back

overtime work,

to vary widely but to

The Secretary concedes that

which the

average 18 hours a

Santiago's fixed wage of

$318 per week fully covered the minimum wage for a work week
of 40 hours,

as it clearly does

(40 x $3.35 = $134).

Yet

the Secretary's brief asserts that Santiago has "received no

compensation
week."

for

The Act

provides that

approximately

of

overtime per

not only requires payment for

overtime but

compensation for

18 hours

hours in

excess of 40

per

week shall be paid "at a rate not less than one and one-half
times the regular rate at which [the employee] is employed."
FLSA

7(a)(1), 29 U.S.C.
Although

district
first

it deemed

court denied

207(a)(1).
Santiago subject

any award

to the

to Santiago.

Act, the
The

court

noted that Santiago had received $318 per week and it

ruled that "[t]his amount adequately compensated him for his

forty (40) hours of
to

regular work and his overtime

fifty-eight (58) hours a week."

hours up

The court then observed

that Santiago appeared to be "an involuntary plaintiff," who

supported

Tango's

management

Santiago was, in the

at

the

trial.

court's opinion, himself

Finally,
"responsible

for the implementation of the illegal practices which led to

the filing of this case."

-1111

Starting with
Secretary

argues

the district
to

us

court's first reason,

that the

district

court

the

has no

warrant under the statute to decide "subjectively" that $318

is adequate
own

compensation, for the Act

objective

compensation.
a

formula

minimum

wages

and

overtime

It is not clear that the trial judge intended

subjective judgment.

that

for

plainly provides its

Rather, he

might well

have meant

the $318 per week not only compensated Santiago at the

minimum wage

for the first 40 hours ($134) but left $184 to

cover Santiago's remaining 18 hours of overtime at an hourly

rate ($184 divided
amply more

by 18 hours

than one

(1.5 x $3.35 = $5.03).

= $10.22 per hour)

and one-half

times

that is

the minimum

wage

Had the defendants

and Santiago agreed to such

structure in advance--$134
for

all

required

structure

would

overtime--it

Secretary's

the

Supreme

regulations,

favorable result.

Act,

7(f), 29

and

dictates

that

at least
U.S.C.

the language

Court

hours and $184

possible

the

See FLSA
___

advance agreement,

construed by

is

have satisfied

certain conditions.
Absent an

for the first 40

this
under

207(f).

of the Act,

implemented

a wage

different

in
and

as
the
less

In Overnight Motor Transp. Co. v. Missel,

___________________________
______

316 U.S. 572 (1942), the Supreme Court glossed the governing
language

of section

[employee's]

regular

7(a)(1)--"one and
rate"--in the

one-half times

case

of

the

"an employee

-1212

working
hours
The
best

irregular hours for a

fixed weekly wage" where the

regularly exceeded 40 hours

Court held,
left

to

for reasons
connoisseurs

a week.

Id. at 573-74.
__

explained in its
of

the FLSA,

that

opinion and
where

no

"regular rate" has been set by the employer for the first 40
hours,

the Act treats the regular rate for that week as the

fixed weekly wage

divided by the

number of hours

worked in that week, including overtime hours.

actually

Id. at 580.
__

Overnight's outcome is binding upon us and the district

_________
judge

and

its

formula

is

in

fact

Secretary's regulations for computing

in

the

case

fluctuating

of

employees

hours."

29

Overnight formula,
_________
week depending

on the

divided by

treated as

50%

to

overtime,

In

be

collected

her

778.114.

for

Under

in

each

he worked

The

is

the required

each overtime hour,

lawsuit.

would

an employee

100% (instead of

the

the

varied

overtime hours

effect such

regular rate for

computation of
despite

58).

the

salary

week, his regular rate per hour

having been paid

150%) of the

"fixed

"regular rate"

number of

in

overtime compensation
a

C.F.R.

Santiago's

(e.g., for a 58 hour

____
be $318

paid

reflected

leaving

Secretary's

back pay due Santiago in the district court,

present

appears to

claim

that

have followed

Santiago

received

the Overnight
_________

although we do not vouch for the actual computation.

no

formula
T h e

district court's judgment as to Santiago cannot be sustained

-1313

for either of

the other

two reasons offered

by the

judge, even assuming that they were intended as

trial

independent

grounds.

Santiago may be an "involuntary plaintiff," as the

district

court said, but the Secretary can still sue on his

behalf.

FLSA

16(c),

17; 29 U.S.C.

216(c), 217.

See
___

International Ladies' Garment Workers' Union v. Donovan, 722

____________________________________________
_______
F.2d 795, 808-09
820

(1984);

1205-06

(D.C. Cir. 1983),

cert. denied, 469

_____ ______

U.S.

Donovan v. University of Texas, 643 F.2d 1201,

_______
___________________

(5th Cir. 1981).

Indeed, payment of back wages, if

proved due, is intended to protect complying competitors

the defendants, in
FLSA

addition to making

2(a)(3), 29 U.S.C.

the employee

whole.

202(a)(3); International Ladies'

_____________________

Garment Workers' Union v. Donovan, 722 F.2d at 807-08.

______________________
_______
would happen

if an

of

employee awarded back

pay declined

What
to

accept the award is a matter for another day.

Similarly,

the

district court's

bare

statement that

Santiago was "responsible" for the "illegal practices" seems

to

us an insufficient basis to deny recovery.

The question

whether

an employee

under the

might ever

be debarred

from recovery

Act because of his own role in a violation is not

necessarily answered by cases, cited to us by the Secretary,

that

the duty

to obey the

others by the employer.

Act may

not be

"delegated" to

In this case, however, the district

court has provided nothing to support or explain its cryptic

reference to Santiago's

"responsibility":

we

do not

know

-1414

whether Santiago was aware of the Act, his role in the false
bookkeeping or in the

fixing of waiters' wages, or

culpability in

contrast to that

of defendants.

policy of

Act

employees,

findings

the
and

support an

to

specific

protect

justification

in pari delicto defense,

________________

defense would ever be allowed.

his own
Given the

more

would

detailed

be needed

assuming that

to

such a

The defendants, it appears,

never offered such a defense in this case.

A
Santiago

final issue
is his

posed

by the

alleged status

denial
as an

of an

award

to

executive employee.

Defendants

asserted in

the trial

exempt from coverage under

court that

the Act because he was

in an "executive . . . capacity" (FLSA

213(a)(1))

as the

district court
was at

best

regulations.
defendants

supervisor

rejected that
a

"working

remain

of

541.115.

free to

grounds not accepted by

defend

other

under

the

offers a

that Santiago was

an executive employee

the

Secretary's

determination.

lengthy

general

29 C.F.R.

the

The

Santiago

Secretary's

judgment below

(1924).

Here,

footnote again

criteria

on

United States v.
______________

U.S. 425, 435-36

defendants' brief

and

waiters.

Without cross-appealing,

the lower court.

American Ry. Express, 265

_____________________

employed

13(a)(1), 29 U.S.C.

claim, finding that

foreman"

29 C.F.R.

Santiago was

under the
for

urging
statute

making

this

541.1.

-1515

The

regulations have

special importance

here because

section 13(a)(1) does not define "executive .

but leaves it to
the terms.

. . capacity"

the Secretary to "define[] and

delimit[]"

The "working foreman" regulation, closely

read,

does not say that a working foreman invariably falls outside

the statutory category of executive.
offers

description

illustrate persons
exceed the

low

of

whose

the Act

status is lost.

See FLSA
___

of

working

foremen

non-executive work

percentage

individual under

29 C.F.R.

types

Rather, the regulation

of

such hours

and regulations

will

for retail and

usually

allowed

to

an

before executive

13(a)(1), 29 U.S.C.

541.1(e) (40%

to

213(a)(1);

service workers;

20% for others).

Santiago,
limitation
earning

however, was

on hours

over

regulations

$200
as

541.119(a)-(b).

employee under the

consists

of

includes the

because, as
a

a high
A

not subject to

week,

he

salaried

a worker
is

in Puerto

classified

employee.

high salaried employee

29
is an

Rico

under the
C.F.R.
executive

regulations so long as his "primary duty

the management

of the

enterprise

. .

. and

customary and regular direction of the work of

two or more other employees . .

Such a high

salaried employee

certain

the

of

the percentage

other

. ."

29 C.F.R.

also does not

criteria

of

section

defendants claim to satisfy, i.e., 29 C.F.R.

____

-1616

541.1(f).

have to

meet

541.1

that

541.1(c)-(d).

See generally Donovan

_____________ _______

v. Burger King Corp., 672 F.2d

_________________

221,

223-24 (1st Cir. 1982).

Santiago testified at trial that 80 percent of his time
was spent supervising other waiters and the balance spent as
a waiter.
was

He said that the extra $200 he received each week

for

detail.

his manager

duties

which

he described

in

some

Under the Secretary's regulation, "primary duty" is

judged on all the facts.

Santiago's

testimony

29 C.F.R.

portrays

him

541.103.
as

On its face,
high

salaried

employee who spent most of his time engaged in, and was paid
most

of his wages

Unless

supervision of

these supervisory duties

some unspecified
have

for, the

some force.

are not

reason, the defendants'

See generally
______________

other waiters.

"management," for
claim appears

Donovan v.
_______

to

Burger King
___________

Corp., 672 F.2d at 226. ("The supervision of other employees

_____
is clearly a management duty.").
If there is
answer was

an easy answer to

not obvious from

defendants' claim, that

our review of

the Secretary's

more

elaborate

court.

arguments on

There,

this

the Secretary

Santiago of $2.95

issue

in the

argued that

district

the payment

per hour for 40 hours and

to

his sharing of

tips showed that he must have worked 40 hours as a waiter, a

non sequitur that requires
____________

little discussion; even assuming

doubtfully that the books attributed all of Santiago's first

40

hours

to

his service

as a waiter,
_____________

those books

are

-1717

admittedly false; and

hours as a

the

waiter (and

inference that Santiago spent 40

only 18 in

contradicted by Santiago's direct

also said

testimony.

that Santiago's supervisory role

certain powers
pertinent

supervision) is

(importantly,

under the

criteria need not

to hire

criteria of

be met by

flatly

The Secretary
did not include

and fire

section 541.1,

employees)
but these

high salaried employees

under

section 541.119.
We believe that the district court may have been misled
in its treatment

of the executive exemption issue, first by

the

Secretary's

regulation
the

inexact portrayal

as precluding executive

Secretary's

resort

to

of the

status and,

section

Santiago did not have to meet.

working foreman

541.1

second, by

criteria

that

In all events, the governing

questions, not squarely addressed by the district court, are

whether Santiago's "primary

duty" consisted of

supervisory

work or service as a waiter and, if the former, whether that

work involved "management of the enterprise or a customarily
recognized department
C.F.R.

541.1(f).

management

tasks

other employees).
as well as the
that a remand

or subdivision

See also 29 C.F.R.

________
as including

thereof .

. . ."

29

541.102 (describing

"directing

[the] work"

of

Because this court cannot know the record

parties and the district court,

for a further determination

we conclude

of the exemption

-1818

issue is needed
record.

in light

of the evidence

already in

that

-1919

IV.
To summarize,

the defendants failed to

required by section 3(m).

therefore be recomputed
tip

credit.

remanded to
status

as

13(a)(1)
court

CONCLUSION
give notice as

The award to the 15 waiters must

to reflect the

elimination of

the

The Secretary's claim on behalf of Santiago is

permit the
an

district

executive

court to

employee

vel non
________

in light of this court's opinion.

concludes

that

Santiago

re-examine

does

not

under

his

FLSA

If the district
qualify

as

an

executive employee, then the formula set forth in

Overnight
_________

and the regulations must be applied in determining

overtime

compensation

due to him.

Of course, the

formula does not

preclude averaging or estimating the number of hours

worked

per week where more specific information is lacking.

Before

more court

time is

devoted to

this case,

we

encourage the parties, as the district judge wisely did,

to

discuss an amicable resolution.

The judgment of the district court is reversed as to
_______________________________________________________
the waiters other than Santiago for whom defendants were
____________________________________________________________

allowed a tip credit.

As to Santiago, the judgment of the
____________________________________________________________
district court is vacated. The case is remanded for further
____________________________________________________________
proceedings consistent with this opinion.
_________________________________________

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