Starbucks suit tips in baristas’ favor

Dan Grech Mar 21, 2008


Scott Jagow: Starbucks baristas in California have won a class-action lawsuit against the company. Last night, a San Diego judge ordered Starbucks to pay $100 million in back tips to lower-level employees. Dan Grech explains.

Dan Grech: Starbucks policy has been to share tips equally between baristas and their supervisors. Tips were pooled, then distributed at week’s end according to hours worked. But California law forbids supervisors from sharing in employee tips.

The case isn’t clear cut: shift supervisors take orders and made frappuccinos. too.

John Coffee: We’re not talking about good or evil here. They all poured coffee.

That’s the appropriately named John Coffee. He’s an expert in class-action lawsuits at Columbia University.

He says it may make sense that tips were shared, but that may have still broken the law.

Coffee: It’s a regulatory line drawn by the state of California that you can’t share this. It’s not necessarily fraud on the customer or fraud on the worker in a more classic moralistic sense.

Up to 100,000 California baristas could be affected by the ruling — meaning pay-outs in the thousands. Now that’s a fat tip. Starbucks plans an appeal.

I’m Dan Grech for Marketplace.

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