Starbucks wins California Tip-pooling Case Appeal
June 3, 2009 by Jim Coen
Filed under Competitors News, Legal Updates, Legislative Updates
An appeals court in California sided with Starbucks Corp. and on Tuesday reversed a lower-court ruling that the Seattle coffee giant’s tip-sharing policies violated California labor law. The court agreed with Starbucks that shift supervisors may share in customers’ tips.
A class-action lawsuit brought by Jou Chau, a former barista for Starbucks (NASDAQ: SBUX), alleged that the coffee chain’s policy allowing shift supervisors to share in tip money that customers place in jars violated California labor laws. A San Diego lower court sided with Chau in the suit and awarded more than $86 million in damages but on Tuesday, that ruling was overturned.
“We conclude the trial court erred in ruling that Starbucks’s tip-allocation policy violated California law. The applicable statutes do not prohibit Starbucks from permitting shift supervisors to share in the proceeds placed in collective tip boxes,” wrote Fourth Appellate District Court judges, in their decision.
Chau alleged that Starbucks’ shift supervisors should be considered managers and not eligible for tip-sharing. Shift supervisors perform various duties at the company’s stores, such as making coffee drinks, cleaning tables, cleaning bathrooms and working the cash register, and Chau said they shouldn’t be allowed to share in the tips collected in the plastic containers at each store location. The lower court awarded more than $86 million in damages plus interest, with the total award estimated at more than $100 million.
Starbucks countered that all baristas and shift supervisors are eligible to share in tips, and the appeals court agreed.
“It is undisputed here that the tipping public intended to collectively tip both the baristas and the shift supervisors — for their work as a ‘team,’” wrote the appeals court.
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It’s not undisputed that the tipping public intended to collectively tip both the baristas and the shift supervisors — for their work as a ‘team,’” Some customers may have intended to tip just the baristas. Some customers may have intended to tip just one barista. Some customers may have intended to tip just one supervisor. The problem with this ruling is customer now are unable to determine for themselves who they intend to tip. The courts have basically ruled that the courts, rather than customers, will determine who is entitled to the customer’s tip.
California labor laws clearly state that, No employer shall collect any part of the tips or gratuities paid, given or left for an employee by a patron. To suggest that California’s labor laws do not prohibit employers from collecting tips in a plastic box where the employer will distribute them in a manner the employer sees fit is comtemptible and perjurious.
Gerry, your problem is that you do not live in the real world. It is the employees that collect, handle and split up the tips amongst themselves. Lying about facts is” contempible and perurious” (sic)
Under your curious theory, if the shift supervisor isthe only one talking to the customer, then the entire tip belongs to the shift supervisor because YOU want to be the one deciding what the customer should think.