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Starbucks Brewing Appeal on Tip Sharing Verdict

tipStarbucks was reportedly brewing something new—not for the enthusiasm of its customers, but for its appeal to a multi-million verdict brought against it by a class-action lawsuit.

According to news reports, Starbucks Corp. is appealing the recent $14.1 million judgment from a class-action lawsuit in Massachusetts.

Apparently, the dispute on whether or not the coffee shop’s shift supervisors were allowed to participate in the distribution of tips left by customers took the spotlight of the said lawsuit.

It can be recalled that it was March last year when the court ruled that Starbucks’ shift supervisors are prohibited from receiving  money from any tip pools under the Massachusetts’ tips law and that the coffee shop’s tip-sharing system violated that state’s laws. This only means that Starbucks’ baristas were owed unpaid tips.

Under the Massachusetts Tips Law, an employer is prohibited from requiring or permitting any wait staff employee to participate in a tip pool that includes distribution to any person who is not a wait staff employee. Moreover, an employee classified as ‘wait staff’ cannot have any managerial job responsibility.

In resolving the case, the court noted that the fact that supervisors are not considered as wait staff since they have managerial responsibilities already excluded them from participating in any tip distribution.

At present, the laws of the State of Massachusetts regarding tip sharing provide more protection than those of California. Under the California employment laws, an employer or agent is excluded from taking a tip that is paid, given to, or left for an employee. Remarkably, California’s tip law only regulates ‘employees’ and not particularly ‘wait staff’ who do not have managerial responsibility, unlike as provided in the Massachusetts law.

So far, the case law in said area is currently at its developing stage and it is not yet clear whether shift supervisors in California are able to take part in tip pooling under other state law claims. Hopefully, the Golden State may soon adopt a more comprehensive law for tip-pooling for the benefit of many tipped workers.

Posted in Labor Laws.

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