Bloomberg Law
March 13, 2023, 8:52 PM

Bias Suit Over Darden Wage, Tipping Rules Remanded for New Look

Patrick Dorrian
Patrick Dorrian

Darden Restaurants Inc. is going back to a trial court over allegations that certain wage policies encouraged sexual harassment and racially disparate wages, after the Ninth Circuit held the suit might have been dismissed for the wrong reason.

The US Court of Appeals for the Ninth Circuit said a lower court needs to assure it had jurisdiction under the US Constitution over the suit by One Fair Wage Inc.—a nonprofit that advocates for the elimination of submininum wages for tipped workers.

The trial court signaled that the group may not have established organizational standing under Article III of the US Constitution, but then dismissed the case after concluding the group lacked standing to sue under Title VII of the 1964 Civil Rights Act.

That may have skewed the “order of battle” laid out by the US Supreme Court for ensuring courts have the authority to hear a case before reaching the suit’s merits, the Ninth Circuit said March 10.

The most recent decision by the justices “strongly suggests that statutory standing questions” like whether One Fair Wage can sue Darden as an nonemployee on behalf of its members are nonjurisdictional, the court said.

If they are, then the US District Court for the Northern District of California’s dismissal for lack of Title VII standing addressed the merits prior to ensuring it had the power to hear the case, the unpublished opinion said.

In the suit, One Fair Wage seeks to recover for injuries it allegedly sustained as a result of Darden’s cash-wage policy and tipping policy. According to the group, it’s been injured by having to divert money and other resources to assist Darden employees who are negatively affected by the policies, the opinion said.

The Supreme Court held in Steel Co. v. Citizens for a Better Environment that federal courts can’t proceed to the merits without first assuring they have Article III jurisdiction.

Subsequent decisions by the justices have created uncertainty over the interplay between subject-matter jurisdiction and “subject-matter adjacent questions” like statutory standing, the Ninth Circuit said. But whether that’s so may vary depending on the language of the statute in question, it said.

Given the complicated nature of and the lack of a developed record on the issue, the lower court must address the question in the first instance, it said, remanding for that review.

Judges William A. Fletcher, Jay S. Bybee, and Lawrence VanDyke joined the opinion.

Gerstein Harrow LLP and South Texas College of Law Houston represent One Fair Wage. McDermott Will & Emery LLP represents Darden.

The case is One Fair Wage, Inc. v. Darden Rests. Inc., 2023 BL 78389, 9th Cir., No. 21-16691, unpublished 3/10/23.

To contact the reporter on this story: Patrick Dorrian in Washington at

To contact the editors responsible for this story: Rob Tricchinelli at; Carmen Castro-Pagán at