Starbucks Ordered To Pay Back $100 Million In Tips

A California judge has ordered Starbucks to pay its employees more than $100 million in tips and interest that was paid to shift supervisors, says the Associated Press.

It’s against California law for supervisors to share employee tips.

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.

Starbucks Ordered to Pay Back Tips [Yahoo!] (Thanks, Bladefist!)
(Photo:Travelin’ Librarian)

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  1. Bladefist says:

    woohoo i helped!

  2. Dobernala says:

    You’re supposed to leave a tip at Starbucks? Uh oh..

  3. Beerad says:

    Can anyone with Starbucks experience shed a bit more light on the specifics? Are “shift supervisors” different from managers? Do they do the same work as baristas? Can they boss the baristas around? Just curious about the facts here.

  4. EDogII says:

    Now if only the judge could force them to stop serving that bitter coffee…

  5. picshereplz says:

    The shift supervisors are pouring the coffee and mixing the drinks right alongside the other employees.

    I understand that it’s the law that supervisors can’t take tips from employees, and I understand the reasoning behind it, but it’s kinda nonsensical here.

  6. Shadowfire says:

    Kind of lame, since the supervisors are often serving drinks as well.

  7. mrmysterious says:

    So after the lawyers take their fees the former employees will make about $25 each.

  8. Carencey says:

    @Beerad: Seconding your question, and may I add “how are supervisors paid compared to regular employees?”? I think I’ve read here before that baristas are already better paid than waiters/waitresses who depend on tips.

  9. oakie says:

    @Shadowfire: yeah, but managers run hot food at full-on restaurants, but they aren’t allowed tips either.

  10. Trai_Dep says:

    It’s not like they were taking the tips, but sharing. Which, if they’re serving customers in roughly approximate numbers as the rank-n-file…
    Also, I wonder how much a supes’ share worked out to be per day.
    Barristas: what’s the scoop?

  11. morganlh85 says:

    @Beerad: Yes, they are different than managers. The shift supervisors are responsible for doling out cash drawers, they verify cash drawers at the end of the night, they had access to the safe and the security codes. But they still make coffee and clean up and help customers like everyone else.

  12. thirdbase says:

    Are the shift supervisors the ones responsible for burning the coffee.

    Supervisor to barister:
    I’m sorry barister you can’t serve that cafe mocha it has not been sufficiently burned. If you do not burn it properly it may actually taste good. We can’t have that.

  13. morganlh85 says:

    @Trai_Dep: Each week (or every other week depending on the store) all the tips received that week are tallied, then divided by the total number of man-hours for the week. Then each employee is given that amount times the number of hours they worked that week.

  14. LorneReams says:

    The law was to protect servers who make under the minimum wage as base from getting fucked by someone making over the minimum wage base. This should not apply to Starbucks as they all make much more then minimum wage.

  15. KJones says:

    Uh oh, there’s trouble brewing, and Schultz is going to be foaming about this one. They’re on an espesso-train ride to hell.

  16. Claystil says:

    @mrmysterious: Assume that, conservatively, at least 20% of the 100,000 were rejected or didn’t follow through on necessary paperwork and are therefore not qualified for the settlement. That leaves $1,250 per person. Lawyer’s fees, processing fees and the like should be between 30% – 50%. So average payout should be between $625 – $875, not including taxes.

  17. savvy9999 says:

    $100MM? That’s fretalian for a lot of dough!

  18. redhand32 says:

    Working in any retail/food service at the low end is the equivalent of being a “low paid rape victim, if such a “job” classification can be imagined. Is it standard practice to “share” tips” with management. There is a message in here that only 1 state’s employees (CA) objected to or are able to object to such wage slavery.

  19. snoop-blog says:

    it’s not the managers’ fault. it’s corporates. but in the same aspect, i do feel like supervisors should get a wage that is high enough to not need to share the tips. i use to delivery drive and turned down a management oppertunity because with tips, i made more than the managers.

    in general, managers are expected to do some of the same work as their employees, plus additional duties, and therefore their wages should reflect that. the idea of a tip is to pay someone for good service. if your a supervisor, you should always provide excellent service without an incentive.

  20. snoop-blog says:

    *opportunity

  21. Beerad says:

    @LorneReams: Different law. There’s “minimum wage”-related laws, which require employers to pay a certain amount, or less if the employees are tipped. There are also specific laws on the books (in NY, and apparently in CA per this story) prohibiting managers from taking any employee tips. The logic behind it is similar, though — if part of your job income is from tips (as is true for baristas) you should be getting them, not your boss.

    The devil really is in the details in these sorts of cases, and largely comes down to what my initial questions were getting at — how much were these shift supervisors actually “managers” and not just “baristas” themselves? Tricky question.

  22. RandomHookup says:

    I’m just amazed that Starbucks was officially managing these things anyway. I figured they (like Dunkin with the “no tips” signs) made believe there was no such thing as a tip. I don’t like tipping at quick service places, especially if it’s really a way to dodge paying taxes for employees.

  23. bobskedeet says:

    Why is it we need to pay tips again at all these places? Really these folks are doing their jobs, just like I do. I won’t say never, but I rarely ever give tips to these places like Subway, Starbucks, and all the local places that do there job and serve you. I expect to pay a tip in a restaurant becuase the service is more personal, they come to you. In this case you go to them and they simply make the product to sell you. Honestly, its stupid that we pay tips to these folks.
    100 million is a lot of money, let’s just solve the problem for them by not tipping any more, or maybe starbucks should just remove that dumb tip jar.
    Seriously.

  24. Bladefist says:

    @bobskedeet: I agree with you man. lol, you’re commented reminded me of a scene on ‘The Office’ where Dwight said he never tips someone to do something he couldn’t do himself. I forget the profession, but he said he tipped his surgeon, because thats something he couldn’t have done.

  25. Beerad says:

    @bobskedeet: That’s a separate, and perhaps a valid, argument. But let me ask you: do you tip the bartender who simply filled a 20oz beer mug from a tap? Seems to me that mixing a half-caf double skinny white chocolate mocha with whipped cream is probably more complicated and personalized, yet the bartender probably earns more in wages than the coffee-slinger.

  26. KithKanan says:

    @LorneReams: Just a note since this is a CA law we’re talking about — it couldn’t be “to protect servers that make under minimum wage” because servers in CA must be paid the same minimum wage as any other employee (currently $8.00/hr), PLUS their share of any tips. Mind, that still doesn’t go very far with the cost of living in this state, but the ‘sub-minimum wage’ argument doesn’t apply.

  27. bobskedeet says:

    @Bladefist: :) That was a great flick!

    @Beerad: That is a pretty good point. Never thought of that. The only counterpoint is that usually at a bar you linger for longer than 5-10 minutes and expect to get served in more personal way (although that is not always the case). Perhaps I will stop tipping bartenders too! (Darn you beerad! bartenders will probably not serve me anymore once I stop tipping)

  28. The Porkchop Express says:

    @Beerad: Um, mixed drinks, coming back to you to check on you/get you more booze. I’m sure they do more but those two are the most important that I can think of. That are certainly different than the folks at Starbucks.

  29. mac-phisto says:

    this is strange b/c logically, it contradicts a ruling by caliornia a couple of years ago that required employers to pay salaried managers/supervisors overtime if they were performing the duties of rank-&-file wage employees. i would think that this falls in the same category.

    i would assume that shift supervisors are compensated more for their extra duties, but if an integral part of their job is serving drinks, they should share the tips.

  30. BStu says:

    Well, I’m not sure the law makes sense in this circumstance, but unless it is specifically directed at employees earning a service wage, I don’t see how Starbucks is going to get out of this. A law not making sense doesn’t mean it stops being the law.

  31. Beerad says:

    @Lo-Pan: So do you tip only if you plan on drinking more than one beer at the bar? And if the Starbucks barista was squirting in Kahlua rather than vanilla syrup they should get a tip? That doesn’t seem like a big distinction in “deserves” to me.

  32. UX4themasses says:

    @Beerad: I was a shaft(sic) supervisor for 2 years and we were like the Barista-In-Charge-Of-Store-Only. We are not PERSONNEL managers, we are simply asked to be barista with EXTRA responsibility over the store. (Usually doing the opening, closing, balancing the tills to 150, ensuring the safe was balanced and submitting the receipts, deposits)

    In fact a shift supervisor has no hiring or firing (at the time).

    I can understand if the store manager was in on it, but a shift supervisor?

  33. lemur says:

    @picshereplz: Here’s the deal: it is Starbucks’ responsibility to organize their workforce to fit the model that the government has established and not the other way around. Starbucks must pay attention to who the law says can share in the tips, who cannot and compensate both groups accordingly. The fact that managers pitch in to provide the service is irrelevant because just about everywhere I’ve worked that’s what managers do if they want to keep the place running smoothly.

  34. RokMartian says:

    I wonder how many starbucks employees will be losing jobs to help pay for this little expense. They might just increase the prices, so that there will be less leftover monety to tip from.

  35. nighthwk1 says:

    I was also a shift supervisor at Starbucks for about 2 years. The job is exactly the same as a regular barista, except I was also responsible for opening, closing, and counting money.

    If I didn’t share tips as a shift supervisor, I would have been making LESS than I was before I was promoted.

  36. WraithSama says:

    As expensive as Starbucks is, I won’t leave a tip. I don’t fee like making that $8 cup of coffee into a $10 one.

  37. PermanentStar says:

    I didn’t know people actually tipped them…I mean, seriously, I tip regular waitstaff, that actually wait on me, because I know they make crap for an hourly wage in most states, but I don’t tip people that get paid a normal wage, even if they “depend on tips” to make a living…I have worked food service, and can probably count on one hand the number of times I was tipped, and honestly, it was for service that went above and beyond, not just showing up and doing my job…that being said, though, i will ammend my statement. I don’t NORMALLY tip people who are not wait staff, but if they went above and beyond I do, and I hand it to them, rather than putting it in a tip jar that might get distributed amont all workers.

  38. The Porkchop Express says:

    @Beerad: First off, why go for only one?

    now seriously, I don’t know what I would do if I was only getting one drink. In normal situations I would be at the bar a bit longer than one drink and would tip the bartender throughout my time there to ensure that he/she would come back to me when I was ready. Also, the drinks are usually cheaper than starbucks and that leads me to believe that at least my bartenders are making less than the highschool kid at starbucks.

    At starbucks, you don’t get “served” they hand you a drink and if you want more I would assume you get back in line.

    also: no need to get arguementative, I just won’t tip at a starbucks or starbuckish place. ever.
    They don’t do much per individual client.

  39. Beerad says:

    @RokMartian: The answer to your question is that zero employees will be laid off. Starbucks had over 9 billion dollars in revenue in 2007. That’s over 90 times the amount of this judgment. And yes, profit was significantly less (only over $2 billion), but remember that’s revenue per year. If the stores are making money, employees will have jobs. It’s that simple.

    @Lo-Pan: I’m not picking a fight, I just think that the idea that “I tip bartenders but not baristas because a bartender does things that are way more complicated” doesn’t really hold up. Admittedly, promptness of attention doesn’t really apply at Bucky’s because you wait in line anyway. But the drinks generally aren’t really more complex at a bar (and frankly if you order a planter’s punch the bartender is not going to want to make it anyway, and either a) pour some mix over ice and hand it to you; b) grumble and try and dig up some recipe book for it; or most likely c) punt and say ‘we can’t make that here’).

    If tips are just to ensure good service in the future, then it just makes sense to tip your local barista. They’ll be seeing you again in the future, and if you really care about that perfect latte maybe you don’t mind buying a little goodwill.

    But suit yourself — tips are, after all, voluntary.

  40. PDX909 says:

    Leaving tips at fast food/drink places is for dopes. Don’t plant that tip jar front and center at the cash register and expect me to feel obliged to leave my change in it when you’ve just made 800% margin on the hot drink I just bought. How about paying the people that work there a fairer wage.

  41. kable2 says:

    tips are for suckers. i DO NOT TIP.

    They are not my employee.

  42. chartrule says:

    you would think that tips would be shared at the end of the shift by the people that worked the shift not divided up at the end of the week by hours worked

  43. ktmorton says:

    @Lo-Pan: You’ve obviously never paid much attention at Starbucks if you think baristas don’t give much individual care. I only worked there for a few months, and it was repeatedly drilled into my head how I always had to say yes to customers, even if that meant putting 5 Raw Sugars and half a Splenda in their Frappucino to make it just right. That is an actual order.

    Tips are voluntary, of course, and I don’t always tip at fast food places, but don’t act like baristas don’t do anything.

    Also, chiming in to say that shift managers are basically just the team leader and are on the floor serving drinks or cleaning just like everyone else. They deserve tips.

  44. snoop-blog says:

    @ktmorton: i think his point was just that the bartender will remember that he tips well, and will make sure his glass is never empty without the guy ever leaving his seat. me on the other hand, i order cocktails and tip well in order to a) get the same drink never empty deal, plus b) get stronger drinks. i’ve seen bartenders make my drink without the electronic thing on top, and then turn around and use it on someone else.

    don’t get me wrong, if i was a fancy coffee drinker, and you remembered my hard to make order everytime i came in, i’d tip you. but i only have bought 2 things at starbucks, double shots (in the can), and regular coffee (which tastes like sh*t, can’t see what all the hype is about).

    but the bars i visit, the bartenders DO remember my fav’s and they flirt, and when my wife is with me, they talk to her and treat her like gold (best way to get a tip from me is to pay more attention to my wife)

  45. mac-phisto says:

    @kable2: wrong board. i think you’re supposed to be here: [jezebel.com]

  46. RandomHookup says:

    The real reason for the law (we have something similar in Mass.) is to keep managers from strong-arming the tips. Most companies are afraid of FLSA which dictates overtime for certain non-management employees. If you are going to give someone a supervisor title to keep from paying overtime, then you need to pay a higher salary than the people they are “supervising”.

  47. Major-General says:

    @LorneReams: I am going to reference the following, item number five: [www.dir.ca.gov] I would say don’t tip at Starbucks, but more to the point, are shift supervisors hourly or exempt employees?

    @RandomHookup: In California it is twice minimum wage for a 40 hour workweek, by 52 weeks for the year. So $16/hour, times 40 hours = $640/week time 52 weeks is $33,280/year. The ‘living wage” level in my county is about $26,000/year.

    @Beerad: Where do you get $2 billion for profit? Because the article I read said $672 million? Which for those who are interested is 7.14%; a respectable rate of return.

  48. Ailu says:

    @Bladefist: Hey Bladefist, when did you tip consumerist? Just curious, cause I sent them an email about this yesterday. Thanks.

  49. BAAAAAHAHAHAHAHAHAHAHAHAHA @ the supervisors. The supervisors there must be retarded as hell to think they deserve a share of the tips. Tips are for the ones that actually serve the customer. How would the supervisor at starbucks like it if i let the supervisor at oh… let’s say dunkin’ donuts get a share of it?

  50. katylostherart says:

    why couldn’t the shift supervisors share in the tips? they generally do as much work at the counter and espresso machine as the regular baristas? i can understand why the managers don’t really deserve anything but i know a couple shift supervisors and they’re making coffee and taking payment the same as the rest of the people behind the counter.

  51. Ilovezombies says:

    I worked for Stabucks for 3 years. I remember we all (everyone) would split the tips. How do I get in on this? Do we have to file some papers or will they dig up all the Starbuck’s employees and pay our dues?

  52. Bearish says:

    OK, former Shift Supervisor here. Almost 2 years with the Bux.

    1) At most stores, SS are just a step up from regular Baristas. They still do all the same work. Make coffee, cleanup messes, deal with customers, open/close stores. Depending on the shift they may have other responsibilities relating to cash management and “partner management.”

    2) Depending on the size of their store, they may take on additional semi-manager roles like ordering product and helping with scheduling. This happens when the store is not profitable enough for a dedicated assistant manager.

    3) In my region, all SS shared tips with Baristas as we were all hourly employees. Asst managers were hourly too, but it’s widely known that they really get the shit end of the stick. AFAIK there was never a problem with tip sharing – everyone did virtually the same work. Although SS have a nominal responsibility to make their shifts run smoothly and check tills at the end of the night, it’s a bit of a stretch to call them management.

    Unless things in La Jolla run very differently, this sounds like a group of people making trouble. All Sbux employees make way over the prevailing minimum wage, not including benefits. Not to sound like a corporate apologist, but it’s actually a pretty cool company to work for.

  53. dogfish454 says:

    Shift supervisors at Starbucks are not part of management. They make drinks, they greet customers, and they wipe tables. In short, on top of supervising the shift they do the same work as the baristas and are essential for creating that “Starbucks experience”. Since they help create the reason that customers tip (great service) they should get part of the tips.

  54. Falconfire says:

    @lemur: Actually since 49 of the 50 states do NOT follow this “Californian” way of thinking, its the Californian governments job to shut the hell up and understand it cant make “governmentally approved terms” for positions.

    Odds are a appeal is going to overturn this once it gets to federal level.

  55. saugusbob says:

    Wife has worked as a barista for about 2 years and says that at her store the shift supervisors perform all the normal barista duties plus the other duties mentioned with regard to cash control and opening and closing stores. We have a sister-in-law who is an assistant manager at another store and she says that the shift supervisors make about a dollar more per hour than the baristas. They put up with the extra duties because most want to move up the ladder and are willing to accept the additional responsibilities for what is basically a lousy pay differential. Starbucks does not pay much over minimum wage but the benefits are almost as good as a government job. To obtain these benefits all one has to do is work 240 hours during a quarter or an average of 20 hours per week. Try to find an entry level job with those kinds of perks. My wife and I are both over 55 and we both love what Starbucks Corporation provides for her today and for our future. When we received the notice of this lawsuit, I asked her and she indicated that she felt that the ship supervisors are entitled to tips.
    As far as customers tipping, she worked at one of the starbucks in a target store and they were prohibited from accepting tips(they were target employees)and some customers were offended when told that they couldn’t accept tips. Tiping is a personal choice and is appreciated but not expected.

  56. mzlinax3 says:

    As a current Starbucks barista in one of the highest grossing stores in Philadelphia, I must say that the former in barista is a little punk who probably didn’t even deserve some of the tips that he had received in his lifetime. Shift supervisors work just as hard as the baristas, if not harder. Raising a supervisors gross pay so that they won’t need tips will significantly increase the adjusted hourly rate of baristas to the point where some baristas will make just as much, if not more, than shift supervisors. How would that be fair? It wouldn’t. Also, no one is required to tip. The only reason why I would think tipsharing unfair would be because of the fact that shift supervisors work a bulk of the hours in the store so they do earn the majority of the tips… but they’re working for every penny. There are only a few baristas that work anywhere near as many hours as a shift supervisor does.