Starbucks wins on appeal - $100 million tip sharing verdict reversed
Starbucks corp has 100 million reasons to smile. The cas in question is Chau V Starbucks Inc. (D053491 (Super. Ct. GIC836925))
The California Appeals Court recently ruled that San Diego County Superior Court Judge Patricia Cowett's decision to award baristas $86 million in restitution plus about $20 million in interest was was not based properly. The Appeals Court also felt that the shift supervisors "essentially perform the same job as baristas."
The court also stated in its opinion:
The court's ruling is unsupported. Section 351 does not contain any language prohibiting an employer from equitably dividing tips placed in a collective box among the employees who provided the service. The trial court's reliance on the "mandatory tip pooling" judicial decisions was misplaced. These decisions were premised on factual scenarios different from here and do not apply where customers leave tips in a collective tip box for service rendered by a "team" of employees.The court's ruling is also at odds with legislative objectives. Section 351 was enacted to prevent employers and their agents from using their positions of authority to demand that employees give up their earned gratuities as a condition of employment. The undisputed evidence shows that no barista was required to give up any part of a tip left for the barista. Rather, Starbucks's policy ensured the collective tips were equitably distributed to those who earned them.Section 351 was also enacted to prevent fraud on the tipping public. (§ 356.) The Legislature wanted to prohibit a business owner from deceiving a customer who left a tip for an employee by requiring that the employee later transfer any part of the tip to the employer or the employer's agent. It is undisputed here that the tipping public intended to collectively tip both the baristas and the shift supervisors—for their work as a "team." Requiring these collective tips to be given solely to baristas would mislead the public. Because the trial court's interpretation of section 351 was not supported by the statutory language and led to a result contrary to the fundamental purpose of the statutory scheme, it is one that the Legislature could not have intended. We reverse the judgment in its entirety.This case stems from a 2004 lawsuit brought by a former a former employee, Jou Chau, and 100,000 current and former Starbucks employees. The angle of the suit was that Starbucks baristas were not legally entitled to share in employee tips. Have you ever seen the community tip jar on the counter when getting your Grande Frappucino?
A few Blawgs commenting on this Starbucks "tip sharing" case include:
Your Honor I Object. In this blog, the blogger brings out the following in his post: "Starbucks wins the 86 Million Tips Sharing Class Action"
What maybe should have been sued upon in the first place was the actual formula used to calculate the share of the tips rightfully earned by the shift supervisors (certainly less than a full hour per hour amount) and whether any substantial adverse impact actually befell to the baristas as a whole..Legal Blogger Dennis Westlind, from the law blawg "The World of Work", chimes in on the ruling in his post "Starbucks obtains reversal of $105 million "Tip Sharing" case."
Legal Blogger, Shaun Martin from the law blawg "The California Appellate Report" gives excellent commentary on the Starbucks ruling in the post "Chau v. Starbucks (Cal. Ct. App. - June 2, 2009)"
All eyes are on the legal team representing the baristas and Mr. Chau. According to an LA Times article, Attorney David Lowe is quoted as saying:
"Up to this point, every court that has addressed this issue has found that an employer cannot pay supervisors from a tip pool. This is the first case that goes in a different direction," We will be looking to the California Supreme Court to fix this error."
I guess that when I go into Starbucks later today and wish to thank my barista for the excellent customer service provided, I should hand them the tip directly and "INSIST" that they keep it. This way, I am ensured that my tip was given to the proper person, the person that served me.Let's see if this case will go to the Supreme Court or settle for a nominal amount to make it go away. Time will tell, if this case will continue to the Supreme Court of California. Starbucks shares settled at $15.20 yesterday, according to the Investor Relations section of the company's website.
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.
Comments
In ways i feel this is another form of stealing where stealing being defined as "taking a persons belongings (tips in this case) without proper authority to do so". If i tip a person at a restaurant or anywhere then i give them it for there hard work and for tending to my needs. I don't expect then for the tip i specifically gave them to be shared out amonst other people who i havn't even met.
Posted by: Solicitors Wakefield | June 15, 2009 3:31 AM