On June 2, 2009, the Fourth District Court of Appeal in San Diego decided Starbucks can legally require its low-wage hourly coffee baristas to share tips with supervisors who also wait on customers. The appeals court reversed a $106 million award against Starbucks, which currently has over 1,300 locations throughout California.

The lawsuit was filed in 2004, alleging Starbucks of violating California state law that declares tips to be the property of employees and denies a share to a company’s owners or managers. The lower court judge, Patricia Cowett, ruled last year that shift supervisors were company agents and equivalent to managers. Thus, Starbucks must repay the baristas for the portion of tips that went to the supervisors.

In March 2008, Judge Cowett awarded $86.7 million in damages to 100,000 past and present baristas who had worked in a California store since October 8, 2000, added $19 million in interest and ordered Starbucks to direct all future tips to baristas. She put the order on hold during Starbuck’s appeal.

The lower San Diego court ruled that Starbucks’ shift supervisors are managers who are ineligible to be paid out of the tip jar. The Court of Appeal rules that customers intend their tips to go to everyone who serves them, supervisors as well as baristas. The court ruled that there is nothing unfair or illegal about Starbucks’ policy of dividing up the money according to the hours each employee worked.

By leaving money in a box near the cash register, “a customer would necessarily understand the tip will be shared among the employees who provide the service,” Justice Judith Haller said in the 3-0 ruling. “There is no danger the tipping public is being misled by allowing Starbucks shift supervisors to obtain their fair share of the tipping proceeds.”

Baristas, the company’s entry-level employees, make and serve drinks and operate the cash register, and can be promoted to shift supervisors after six months. The supervisors do the same jobs for more than 90 percent of their workday, the court said, and direct the baristas, open and close the stores, and deposit money into the safe. They have no authority to hire, fire, or discipline other employees, the court said. The court also said, the tips are left in a “collective box” for the customer service team - which includes the shift supervisor - and therefore can be shared between baristas and supervisors.

A lawyer for the baristas said they would appeal to the state Supreme Court. Courts have ruled in other cases that employees do not need not share tips with supervisors who are part of the services team.

If you have questions regarding Employment Law then contact The Law Offices of Amanda Hill located in Beverly Hills at (310) 694-8089 to have an attorney help you with your legal needs.

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