Starbucks Must Give Baristas $100M In Tips

Calif. Judge Rules Tip Money Should Not Have Been Shared With Supervisors

(AP)  A Superior Court judge on Thursday ordered Starbucks Corp. to pay its California baristas more than $100 million in back tips and interest that the coffee chain paid to shift supervisors.

San Diego Superior Court Judge Patricia Cowett also issued an injunction that prevents Starbucks' shift supervisors from sharing in future tips, saying state law prohibits managers and supervisors from sharing in employee gratuities.

Starbucks spokeswoman Valerie O'Neil said the company planned an immediate appeal of the ruling, calling it "fundamentally unfair and beyond all common sense and reason."

The lawsuit was filed in October 2004 by Jou Chou, a former Starbucks barista in La Jolla, who complained shift supervisors were sharing in employee tips.

The lawsuit gained ground in 2006 when it was granted class-action status, allowing the suit to go forward for as many as 100,000 former and current baristas in the coffee chain's California stores.

It was not immediately clear how many current and former employees are affected by the ruling.

"I feel vindicated," Chou said in a written statement released by attorneys. "Tips really help those receiving the lowest wages. I think Starbucks should pay shift supervisors higher wages instead of taking money from the tip pool."

California is Starbucks' largest U.S. market, with 2,460 stores as of Jan. 8, the latest count available. The Seattle-based company has more than 11,000 stores nationwide.

Starbucks employs more than 135,000 baristas in the U.S. The company did not immediately respond to a request for a head count in California.

The judgment comes as Starbucks is struggling to revive its U.S. business, where store traffic has slipped amid a sagging economy, rising energy and dairy costs, and growing competition from cheaper rivals.

The company's stock has slid more than 50 percent since late 2006, when it was trading close to $40 a share. Starbucks shares rose 3 cents to $17.53 Thursday.

Starbucks earned more than $672 million on revenue of $9.4 billion during its 2007 fiscal year, which ended Sept. 30.

The judge ordered Starbucks to pay $87 million in back tips, plus interest of $19 million, bringing the total judgment to about $106 million.

The company said it planned to ask the court to stay the ruling while the appeal is pending.

"The decision today, in our view, represents an extreme example of an abuse of the class-action procedures in California's courts," O'Neil said.

The coffee company also took issue with the brevity of the judge's ruling, which was only four paragraphs, saying she failed to address the unfairness to shift supervisors.

"This case was filed by a single former barista and, despite Starbucks request, the interests of the shift supervisors were not represented in litigation," O'Neil said.

But attorney Laura Ho, who tried the baristas case, said the court's verdict follows state law.

"Starbucks illegally took a huge amount of money from the tip pool to pay shift supervisors, rather than paying them out of its own pocket. The court's verdict rightfully restores that money to the baristas," Ho said.

[gkc99]

Boycott Starbucks! Their coffee sucks anyway.

[creeper00]

Wow! The little guy won one for a change. Who''da thunk?

Wanna bet it''s overturned as soon as it gets to a conservative judge on appeal? The bosses have to get theirs, you know.

You''re right...their coffee does suck. I could tar my roof with it.

[njspanteach]

Yeah for the little guy! They broke the law, they should pay the money back. Point blank. I''m sorry it will hurt them, and I believe they are a good company over all, but what''s fair is fair.

[thgdriver]

This brings to mind the millions Wal-Mart had to pay it''s imployees for making them work through brakes and lunch hours. Just one employee filed that lawsuit also, she worked at a Sams club and won a class action for all Wal-Mart workers.

To pay supervisors out of a tip pool is just plan wrong, Starbucks, you should have been paying supervisors more in the first place, pay up!

[displeased]

Starbucks is a bad example because all they do is pour my coffee and hand it to me. But if I''m in a restaurant and I receive good service from a manager, I expect them to keep my tip and not hand it off to somebody who may have not provided the same service. If they share tips, then the amount should be determined by considering the salary differences and the additional hours managers work to achieve their duties. I''m not certain but I''m guessing Starbucks managers don''t make much more than the baristas.

[thgdriver]

I have never purchased a coffee from Starbucks, It''s too expensive. An associate told me if I have a very bad scuff on a car tire I can restore it with the coffee.

[thgdriver]

I''''m not certain but I''''m guessing Starbucks managers don''''t make much more than the baristas.

Posted by Displeased

It''s Starbucks responsibility to pay their managers more, thats why they are managers. We have the same law in my state. Starbucks was clearly braking the law.

[jdclueless31088]

I stopped buying Starbucks last year because they don''t support our military and now this...glad I stopped buying from them...shame on them..now I know I made the right choice...Boycott all their products.

[griking]

If me the customer leaves a person a tip for great service then I expect THAT person to get the tip. To divide tips between all the staff defeats the purpose of tipping and makes me less likely to tip at all.

[easeup-2009]

Why the hell do you tip the slacker who pours you a cup of coffee?

[mrvolleyba11]

thgdriver right on!

the same thing happened or is happening at "Wynn''s" in Las vegas. they are taking the dealers tips and giving some of it to pit bosses because they say the dealers are making more than them! never did I hear anybody say pay the pit bosses more!!!

and if that is the case probably ALL cocktail waitress''s earn more than the supervisors!!!

Corporate policy: let''s not cut into the millions & billions of dollars of our profits to pay supervisors more when we can steal it from the (defenseless) people in the lowest pay scale!!!

[mrvolleyba11]

"Displeased"
...if your served by a manager then the manager is not managing!!! tips should not be divided by hourly salary! you sound like the kind of person that would pay your workers $2 an hour because they make good tips (i.e. counting their tips as part of their hourly wage) when tips very from day-to-day, week-to-week!!! it is obvious you''ve never work a minimum wage job and really needed or depended on your tips to make a living!!!

[tilden7]

"The decision today, in our view, represents an extreme example of an abuse of the class-action procedures in California''s courts,"

What B***S***!!!! The real "extreme example of...abuse" is ripping off the baristas by forcing them to pay the managers, rather that paying them yourself. You people are disgusting. I will be very happy to watch the court force you to pay every cent of that judgement!

[displeased]

the same thing happened or is happening at "Wynn''''s" in Las vegas. they are taking the dealers tips and giving some of it to pit bosses because they say the dealers are making more than them! never did I hear anybody say pay the pit bosses more!!!
Posted by mrvolleyba11

That is wrong. If the pit bosses aren''t on the floor earning tips, they shouldn''t be keeping any, regardless of what the other person is making. Another example of why sharing tips is a bad policy.

[thgdriver]

I was eating at a Texas Roadhouse restaurant, I was still eating and they started to sweep the floor right next to my table. They close at, 11 it was 8, so why the hurry?

When I was leaving the manager asked if everything was OK? I told him I did not finish my meal because I preferred not to eat dust from his floor. I did not have to pay and they gave me a credit card for $50.00 to come back.

That is the managers job and they should and in most cases do, make more money then the waiters/waitresses.

[pollroller1]

It amazes me at the number of Starbucks stores I see. Seems like they are on every street corner. I never cared much for their coffee. I like Folgers myself.
Now that''s good coffee.

[mrvolleyba11]

Displeased; additionally "management" (and supervisors) are not considered to be in tipped positions because they do not "serve" the customers. Some supervisors can be be "servers" but supervise over other servers and in this case that would entitle them to "pooled tips".

management has no business even being involved in the tips, the workers/servers should decide in advance if they are going to pool tips and split or keep your own! if i am working with slackers then i would say keep what you make but as a guy (banquet server) women do make the most tips in such case I would go for pooling! ...let them sweet talk and flirt with the customers and i''ll do all the haulin and cleanin (while they rake it in)! :-)

[displeased]

it is obvious you''''ve never work a minimum wage job and really needed or depended on your tips to make a living!!!
Posted by mrvolleyba11

I''ve worked several restaurants making $2 on hour and very good tips, for several years. We never shared with managers, but managers never worked the floor unless it was an emergency. It depends on the situation. If a manger is required to work the floor and provide service and then provide additional time for their "management" duties on top of that, they should keep the tips they earn. If they don''t work the floor, then they shouldn''t "steal" tips they didn''t earn.

[erichsh]

Starbucks is struggling as it is, and now they might have a $100M bill to pay. The "little guys" might have won this battle, but a lot more "little guys" will lose the war if Starbucks goes bankrupt.

[mrvolleyba11]

Displeased the pit bosses are on the floor (monitoring the dealers/action) but they do not earn any tips. except at steve wynn''s property! it never seemed to be an issue before at any of his other properties but some how is there! management needs to stay out of telling employees how they "HAVE" to handle THEIR tips!!!

[mrvolleyba11]

Displeased i do angree that if the place is so busy that the manager/supervisors then start serving customer that they should share or keep their own tips. but if pooled their share is only a portion of the time they actually servered. if they helped for 1 hour they shouldn''t share equally in a pool of tips earned for an 8 hour shift!

[Renegade.Rivers]

Starbucks is struggling as it is, and now they might have a $100M bill to pay. The "little guys" might have won this battle, but a lot more "little guys" will lose the war if Starbucks goes bankrupt.

Posted by erichsh

----------------------------------
So what let them go under, if their poor policies, and management cost them the ballgame then so be it. you get what you pay for, or as my Grandmother used to say, "The road to he11 is paved with good intentions."

[inventagod]

Supervisors?
Taking a cut of employee wages?
Where did they learn THAT one?
Congress?
Shame on $tarbuck$!

[gronamox-2009]

Don''t ya love Starbucks? It isn''t fair to shift supervisors if they don''t get a share of the tips. What are they nuts? It isn''t fair that you don''t pay them more you f----g a------s. I hope they go broke. And all the fifty million clones that blight our landscape will wink out. Goodnight Moon. Cheap ***.

[samseventy7]

I am really not surprised that a company as big as Starbucks is too cheap to pay their managers out of their own pockets. So they rob the hardest working one to pay those that get to feel priviledged for just showing up. Shame on you Starbucks!!!!

[thgdriver]

and now they might have a $100M bill to pay. The "little guys" might have won this battle, but a lot more "little guys" will lose the war if Starbucks goes bankrupt.

Posted by erichsh

So you think it''s OK for the little guy to subsidize a managers pay while the big Company rakes in 672 million in profits on 9.4 billion in revenues? Come on, you can''t want to keep a thief in business that bad.

[b-easy63]

*** is a barista? Is that an English word? (sarcasm) obviously, since most wait staff are paid less than minimum wage, why should mgrs get a cut? The problem with the Starbucks lawyers is that they fail to realize the judges job is not to reinvent the law, but to intepret it. The law was pretty clear: mgmt and supervisors do NOT share in tips, that being the case, Starbucks broke the law and should not only pay the 100 million but also a fine for breaking the law. After that is settled, before disbursing a penny--find out how many "baristas" are illegal. If any are, they forfeit their share of recompense as ALL monies they make are illegal.

On another note--don''t do class action suits guys. The lawyers make millions and the average pay out to any citizen is about 55.00. (depending on the size of the suit) class action suits allow lawyers to win big, companies to pay out--but the average plaintiff gets very little, no matter how much they really lost. If a case is worth litigating, do it one on one, class actions are splashy, but rarely benefit the true people who lost money.

[b-easy63]

management has no business even being involved in the tips, the workers/servers should decide in advance if they are going to pool tips and split or keep your own! if i am working with slackers then i would say keep what you make but as a guy (banquet server) women do make the most tips in such case I would go for pooling! ...let them sweet talk and flirt with the customers and i''''ll do all the haulin and cleanin (while they rake it in)! :-)

Posted by mrvolleyba11 at 09:27 AM : Mar 21, 2008


I worked as a waitress while in college. In places where tips had to be pooled, people usually underreported and turned in the tips. Mgmt got wise and started making people empty their pockets, but the staff got wiser and had arrangements with the bus boys and kitchen to take the money to the back with the dirty dishes and just rake in a few dimes. I knew a girl who often made over 100.00/night in tips, but she always reported as making around 20 to 30.00. She would flash us the bills once we were outside of the restaurant. Most staff did this. The reason? If a person worked for tips, why the hell should they let others reap the money for them?

[louklou51]

Starbucks, aka Charbucks, ya got caught! Shame on you, pay up for it will cost you more to fight the ruling than abide by it.

[displeased]

If a person worked for tips, why the hell should they let others reap the money for them?
Posted by b-easy63

Ain''t that the truth. I''ve had to work with some pathetic laziness back in my restaurant days and have always been fortunate not to have to share tips. If I did have to share, I would have found ways around it, like your co-workers did.

[gheemaster38]

back in my college days, when I had to wait tables if a manager got a tip he was obligated under company policy to put the tip in a pool and distribute it to the employees no matter how big or small it was. Unless it was a few pennies or something like that, then he would put it in the "give a penny take a penny" tray for the customers that come up a few cents short. That is when companies cared about the well being of the employees. Nowadays, big business are only interested in 2 things:

1. How much money they can make (Bottom line)
2. How big the CEO golden Parachute can get.

said thing is, in this Pyramid Business World, No one cares about checks and balances because once the top guy jump ship-the next one moves up and starts to nit his golden parachute

[berniepeders]

I have never understood the attraction of all these coffee shops. Their coffee is very expensive and is WAY too strong (at least for my tastes). And I''ve always thought that calling the people that work there "baristas" was the height of pretense. Anyplace else, a waiter or waitress pours your coffee. Like calling a janitor a "custodial engineer". Just my two cents.
Pax vobiscum

[racheldh1]

I am a barista with starbucks......We all get paid above minium wage. Shift Leads are just that Shift leads they are not Upper management. I love working for starbucks and the company truely values its employees.

[easeup-2009]

Why do people tip at Starbucks? *** makes them any different than someone working at Arby''s or Taco Bell?

[sigotratando]

"This case was filed by a single former barista and, despite Starbucks request, the interests of the shift supervisors were not represented in litigation," O''Neil said.

If it is against the law for supervisors to take a cut of tips, what ''interests'' would be relevant?

[silentomen]

StarBucks is not the only company to do things of this nature. I work for a Large company spans outside the US. They decided to not give profit shareing this year even though we made a large profit even when we was not supposed to. Instead they gave the profit shares to all management and above.. basically giveing the finger to all those who actually broke their backs to give them the profit margin in the first place. Why you ask? simply to make things look good for Shareholders... Corperate politics stink and the little people seldome get any acknowledgement for their efforts..

[puzzler125]

What a crock! When I was management (not for Starbucks) we knew as supervisors we could not share in the employee''s gifts and tips. We had better benefits and other "perks" that made up for any financial loss but more importantly than that-the tips were to be given to the employees who did something extra, special, dealt with customers day to day etc. All it would take to reverse Starbucks archaic and greedy position would be for (starting today, for me) a few of us to say "I''m not going to Starbucks until 100% of the tips go to the deserved employees'' pockets and NOT supervisors and management."

[beehive21-2009]

The IRS likes this story.

[hachidori]

As someone that years ago worked for Starbucks as a manager & left because of their employment practices I can tell you that a shift supervisor is not management. They dont place orders, they don''t do paperwork, all shift supervisor means is that they have a key to open the door and access to the safe to make change. They have no actual authority over employees. Starbucks does pay their starting baristas better than minimum wage, and employees do get raises. They also provide health care for every employee. They do have a policy of discriminating against working mothers. When I was a manager for Starbucks, it was quite common that employees made more than management with tips, and that included paying the shift supervisors tips also.

[excoachken]

Who cares? Starbucks is guilty of fraud for selling overpriced coffee to sheeple for years. Their "coffee" with faux-class is an "Oprah" style joke on the moronic consumers who frequent their coffee houses.

[docofthebay]

OH puh-lease! I gave up Starbucks years ago in favor of Peets. Pretentious, ridiculous prices, and the coffee just tastes like a$$.

[docofthebay]

Why do people tip at Starbucks? *** makes them any different than someone working at Arby''''s or Taco Bell?
Posted by easeup

Good point; it''s that snotty uppity atmosphere and the big fat TIP JAR sitting in from of customers faces me thinks!

[jehovahwtnss]

Well! Well! Well! So there is occasionally some justice in the world

[lorinkundert]

Appeal all you want, the law is the law and you are not above it.

[bearswife11]

I was a waitress for 18 years. CA law says management can not receive compensation from "barristers". Why should a hard working waitperson that is on their feet all day running and EARNING those tips have to compensate the managements wages. Management aren''t the ones doing the work for what the customers are tipping for. If a good waitperson EARNS good tips then the customer wants that waitperson to have them, not share with someone who had nothing to do with them. If management wants more money then stay a waitperson. The owners of businesses are illegally getting off from paying decent wages by having the waitperson pay part of those wages. I had no problem paying my dishwasher and busser tips because they were running with me.

[cantshutup]

I was in Starbucks at the Barnes & Noble in Springfield MO. The "barista" wiped her nose with her fingers and proceeded to make my coffee. I asked Joel (with tattoos) "Don''t you think she should wash her hands before she makes my coffee since she was wiping her nose with her fingers?" Genius Joel the cashier said, "She''s not going to touch your coffee with her fingers." I said, "Keep your coffee Joel, I won''t pay for that!" Starbucks...you suck all around...AND you steal tips??? tsk, tsk...I am no longer a customer.

[closethippy1]

I once went to the local Starbucks and when I put some money in the tip jar the manager grabbed the money, put it in his pocket and he goes, "What you looking at?"
Tough crowd, I tell ya.

[hissteps4u]

As a Former Manager for Starbucks I never too tips the company paid me what was expected and I always felt the Tips belonged to the employees who made far less than I.

for starbucks to fight this only shows me further evidence that I was right to leave the company so long ago.

If the Owner has any Morals at all they will stop the apeal and pay up and Move forward.

What they are doing is wrong in every moral sense and fiber of ones sensibility.

Grow up! Do the right thing or watch your base continue to dwindle as you fight an unjust fight and feel the revolt of Millions.

[klawkat]

CEO Schultz, you are a phony. You preach the talk but don''t walk the walk. Your stores are dirty; your coffee is no longer offered ''fresh'' in the bins, but packaged like middle of the road brands at groceries. Your staff can''t pronounce some of the coffees, let alone explain them. How hard is is to keep the milk and creams full and cold? How hard is it to keep the that area clean of spilled coffee and have napkins available. Why does everything come to a halt when one customer orders a ''mixed, bar drink''? We all stand in line waiting while three employees make a latte or other such concoction. Your stronger coffee blends are great; everything else about your stores and corporate STINKS.

[gordon.couger]

In my opinion pooling TIPs is improper. The TIP should go the person/persons that rendered the service plain and simple. Any dilution of that reduces the effectives of the process. If the TIP needs to be spread around the person that earned is the best judge of how to do it not the management. They work hard for their TIP, commissions, etc. and they should get them all.

When a salesman makes sale and I have to pick it up later and he isn''t there I make sure he gets all the commision. The last time I found out a manager took half a commison on a sale he simply rang up after the salesman had spent a couple of hours with me I took it back and came back and bought from the sales with manager watching.

I know the manger and salesman pretty well and told the manager not to do that to me any more. That was 10 year ago and he hasn''t and tell all the new hires not to do it either.

gc