Court of Appeal Reverses Trial Court in Starbucks Case

Last year I reported that Starbucks had lost a case regarding managers and supervisors sharing in the “tip pool.” The Court of Appeal has now reversed the lower court and determined, based on the written policy regarding tips that the managers could participate in the tip pools since patrons had the option of either putting the tip in a collective pool or giving it straight to the deserving employee. This is definitely not going to make the employees happy! The lower court had awarded them $86 million plus another $19 million in interest (ouch!)

The court’s reasoning was sound. They felt that certain key facts were imporant.

1. The vast majority of the time the shift superviors and baristas performed the same job function;

2. These employees rotate jobs and work as a team throughout the day;

3. Customers intend that the tips placed in collective tip boxes collectively award all of the servicing employees;

4. Starbucks’ manner of dividing the collective tips based on the hours worked by each employee is fair and equitable.