Starbucks CEO Thinks Pesky "Laws" Don't Apply To His Company
In the state of California it is illegal for supervisors to share in employee tips. Starbucks recently lost a lawsuit brought by an employee who said he was forced to share a portion of his tips with his supervisor. The judgment awarded over $100 million in back tips and interest to the Starbucks baristas of California, and now several similar lawsuits are pending in other states.
Starbucks CEO, Howard Schultz, however, is more concerned about how the media is portraying Starbucks than he is about paying the back tips. Why? According to a spokesperson, Starbucks won't be changing their practice and they won't be paying up.
Chairman and Chief Executive Howard Schultz, in a voice-mail message to employees Wednesday night, called last week's ruling by a California judge "extremely unfair and beyond reason" and said he wanted employees to know the truth.Schultz also said that his company was being "grossly mischaracterized" in the media."I want to personally let you know that we would never condone any type of behavior that would lead anyone to conclude that we would take money from our people," he said.
In a separate statement, the company also said, "Contrary to some reports, Starbucks has not taken money from any of its partners, and nor is there money to be refunded or returned from Starbucks." A spokeswoman said Thursday that Starbucks Corp. has no intention of ending the practice of sharing tips among baristas and shift supervisors in California while it seeks an injunction.
San Diego Superior Court Judge Patricia Cowett, in her ruling last week, said there was "uncontroverted testimony that Starbucks continues to utilize the distribution of tips from the tip pool to compensate shift supervisors as well as baristas." Cowett ordered Starbucks to pay thousands of California baristas $86.7 million plus interest for breaking the law.
Cowett ruled that Starbucks had illegally forced baristas to share tips with shift supervisors, and the judgment could rise to nearly $106 million. The judge found Starbucks violated California law because "agents" of the company, or, in this case, shift supervisors, were sharing tips with baristas. Similar lawsuits were filed this week in Massachusetts and Minnesota, with threats of more suits in other states, including Washington.
Starbucks won't pay back barista tips [Seatlle P-I]
(Photo:Sillygwailo)
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Comments:
@Steve Trachsel, Ace: Yeah, I used to work for TheBux, and shift supervisors routinely work the bar-position. Especially during the opening shift, in my experience, shift supervisors always worked the bar for the first few hours. Then another barista would come in, relieve them, and the supervisor would float behind the register/bar refilling the pastry case, taking more orders, assisting the bar.
I never felt bad about them getting a share of tips. It always seemed totally fair to me. They did as much (and the same) work as I was doing, plus added duties. Not to mention they are indeed paid hourly.
It's not so black-and-white.
There was confusion over the status of shift supervisors who also worked the counters and made drinks. They shared in tips because they shared in that work.
It was wrong for Starbucks to let them share in the tips, but it's not like they intentionally broke the law. It seems like a misinterpretation of the law instead.
@Steve Trachsel, Ace: I agree. If they are working just like the baristas/servers, they should get some of the tips. However, if they aren't, they shouldn't. Do restaurant supervisors get a share of the tips? I was always under the impression that "tip share" was for servers and bussers. Never worked in a restaurant, so I don't know for sure...
@capstinence:
@Steve Trachsel, Ace:
agreed, it's not like they're not doing barista work and getting paid a bundle. $1 or so more per hour is really not all that much.
"I want to personally let you know that we would never condone any type of behavior that would lead anyone to conclude that we would take money from our people,"
"... we are, however, entirely in favor of actually taking money from our people. We simply don't condone behavior that would lead you to conclude that we do so.
@harshmellow: restaurant supervisors? fast food supervisors are working behind the counter just as much. i don't know why they're making such a big deal about this. normally "supervisor" just means they're handling the money at the beginning and end of shifts. it's not like they're the store manager or district manager.
a restaurant manager at an actual sit down and eat with a waitress and busboy should not get tips. someone who just initials for things and counts the register in and out on top of the regular cs work shouldn't be screwed out of the tip money.
fuck the state of california in this instance, they're wrong.
Hmmm, your company is being portrayed negatively in the media; do you a) Insist that you're being unfairly villified and resume your moustache-twirling, tip-stealing ways or b) humbly pay up and make a minor adjustment to your employees' compensation packages.
Shultz needs to take some Prozac and a PR course, and not necessarily in that order.
I know a lot of people at the local Starbucks... They share tips among whoever is working, Since everyone works as a team.
The tips are then divided up by hours worked and who was working. Thus everyone is getting equal tips for equal time working in a team effort.
It's a pretty fair system actually.. Those who work holidays for instance get huge tips.
I can see how it could be taking tips from some people who were purposely tipped, but it also gives to those who dojust as much work.
P.S. Shift supervisors are the people just above the normal baristas. They are basically managers, so they have the same responsibilities as baristas plus a little more. The store here has maybe 6-8 shift supervisors hired. Managers are a completely different category.
I know it's cool to hate on megacompanies like Starbucks, but I have to side with their stance on this. They don't believe they broke the law and they are fighting it.
@harshmellow: During my time as a waiter, I never had to share with the manager on duty. However we were forced to give a percentage to the bussers, food runners and the bar, regardless of whether they did anything for us. Now that sucked.
@B: I'd laugh if they got slapped with contempt of court fines. If you don't think a court is right, you don't do something about it by calling them names and saying they're bullshitting you. this is a COURT we're talking about.
No sympathy from me.
@RokMartian: Yes but without the bussers your tables would be dirty and new customers would have nowhere to sit, thusly diminishing your tips. Without the food runners you'd have to take out all your orders yourself and new customers (assuming the bussers cleaned the tables) would have to wait, thusly getting angry, thusly diminishing your tip. And you always want to keep the bartenders happy, else they'll make your drinks slowly... thusly getting your customers angry, thusly diminishing your tips.
@Black Bellamy: No. You go up to a counter, order, they make your order and set it on the counter for you to pick up. Just like fast food. I've also seen the occasional fast-food tip jar, but it's a lot more prevalent at coffee shops of all sorts.
"We don't like being portrayed by the media that we steal from our employees, but instead of doing the honorable action and following the court judgement, we are going to defy all accusations, and create even MORE bad PR. We want current and future employees, as well as customers, to see us for the honest and law abiding business people that we are."
Oh, SNAP. You got us! (sarcasm drooling)
Geeez. Pay the freaking money, consider it a lesson learned, overhaul your system on tips and wages.
@RokMartian:
See the problem here is that the many of the commentators that have worked at Starbucks or elsewhere in food service feel that the sharing of tips isn't necessarily wrong. But most others like to hate Starbucks because its a big company, and all big companies are bad. Your knowledge of the industry in interfering with other's instinctive reaction to the tipping issue.
It's none of that. It's that in California, the law defines a supervisor as one thing. Starbucks defines a supervisor as something else. The idea is that someone who isn't interfacing directly with customers at the same level as their "grunt" employees should not receive tips given to those grunts. The intent of the law is to prevent a supervisor who doesn't work with customers from taking a cut of the tips.
Starbucks shift supervisors are on the floor with the baristas, working directly with customers. They share in the tips because they jointly earn them. 95% of Starbucks baristas think these lawsuits are BS. Just opportunistic people looking to take money from the company.
i hate the idea of sharing tips. if i tip you, i want you to get the whole tip! i don't want the incompetent idiot the unfortunate people next to me got as a server profiting from your hard work, and neither should you. why not share the tips with everybody then. then they can flat out get away with paying everybody sweatshop wages, and make innocent consumers look cheap and inconsiderate, when really it's the company that you work for that doesn't give a damn about paying you an actual living wage.
@snoop-blog:
I don't fault the CEO of Starbucks for defending the sharing of tips. What I would like to see him do is tell his stores to put the tip jars away and increase their wages to keep their employees happy. They charge enough for their coffee drinks that their people shouldn't be panhandling for spare change.
@Craig:
Good thing you fixed that spelling error.
I agree with you; tipping is normally for people serving you at a table, not a pickup counter. I'd rather they charge me $5 instead of $4 for a venti rigatoni or whatever and pay their people what they need to. I don't like tip jars at all.
@ClayS: well the fact that the jars are by the register implies you should tip before you ever get your product? how do i know you're not going to screw it up?
Yep, it's an awful system, and I just don't participate in it unless someone at the counter has really gone "above and beyond" in some way. Otherwise, we're just enabling businesses to keep up this awful trend of burying their business expenses in fees, surcharges, and gratuities rather than the advertised price.
All the people who are commenting that baristas shouldn't be tipped at all are completely missing the issue at hand.
And to be honest, it doesn't actually matter that you're whining about how you're an untipped Subway-sandwich maker. If you don't want to tip, don't tip. It's optional. You're all making it sound required.
Besides the fact that I've seen tip jars at all sorts of other fast-food-ish restaurants (and at pretty much every single Tacqueria I visit near my apartment in Oakland), including Subway. It may not be corporate-approved, but it still happens, and I still tip if it's not a horrendous experience.
@modenastradale:
Snoop's point is that you are expected to tip before anyone has gone "above and beyond" expectations. It makes little sense.
CA labor law prohibits "employers or agents" from taking a cut of tips, and defines "agent" as:
every person other than the employer having the authority to hire or discharge any employee or supervise, direct, or control the acts of employees.Which seems pretty clear-cut to me, though I doubt this outcome was what they had in line when they wrote the law.
@ClayS: i thought i made perfect sense. have you ever seen someone walk up to the tip jar on their way out the door? i haven't. i worked at a place that had a tip jar, everyone tipped before they even got their order.
wait you were suggesting that the tip jars themselves make little sense weren't you? whoops silly me.
@LazloNibble: you mean "had in mind"
but i think that's exactly what they had in mind. they don't want to leave any room for a business to take advantage of the labor laws (mainly minimum wages for servers). by not paying a supervisor proper a mangers' wage, they are indeed taking advantage. to say the managers "deserve" part of those tips is admitting they derserve to get paid more than what starbucks is willing to pay them, but instead of starbucks taking the hit, it's the low level employee who ultimately brings home less money at the expense of a deviant ceo.
Let's all blame the victim!! YAY.
Shift supervisors are paid more because there job discription indicates that they must DO more.
The people under the supervisors probably get paid less, not because they do a whole lot less than the supervisor, but because they RELY ON TIPS, which in this case the supervisor is stealing.
Good job Starbucks.
Here's my thing, which a lot of other people are saying. I used to work for Starbucks and was a shift. The only difference in my position was that I handled money and closed the store at night. It was me and one barista, and we worked equally hard, both out front the entire time. I got paid a dollar more. I think I deserved tips, and, my store manager, who worked the floor got us most of those tips. He never got any, but it seems wrong that you don't get what you make. I agree...Starbucks should just pay supervisors and managers what they deserve to be paid, but how much is that? How do we determine the balance? Maybe for now just get tips for the hours you worked up front. That seems like a logical fix to the current issue.
@ClayS:
Actually, "above and beyond" for me has nothing to do with actually making the drinks, becuase I've found that Starbucks beverages always taste bad and are made incorrectly more often than not.
What I mean is, sometimes the person who takes your order is very friendly, and takes a special effort to make you smile on a Monday morning. Sometimes they suggest custom drinks they themselves like. Sometimes they comp your drink. =) For these things, I'd tip.
If Starbucks relies that shift supervisors get a share of the tip jar, then just pay Shift Supervisors s higher salary and then ban them from taking their portion.
Then again, perhaps it was clever strategy by Starbucks in order to keep costs low.
Guaranteed Starbucks knew the law. They have enough money nad probably many fancy lawyers on their side.
@handngrain: it's called negotiating. that's how you determine what a supervisor should make. YOU determine it. i hate when managers complain how little they make. i've turned down management offers before because the money was insulting. if it's not worth the money, say no. or tell them how much it will take for you to do the job. if your worth it, you'll get it.
Starbucks should just pay supervisors and managers what they deserve to be paid, but how much is that? How do we determine the balance?
That seems to me the type of problem that any decent Business Analyst should be able to solve without breaking a sweat. While I am not one myself, this hardly seems to be one of those unanswerable questions. There's enough market data out there to be quite precise.
Starbucks pays a fairly decent wage and great benefits for a position that requires little skill or training, and the greedy barristas want more.
Easy fix for this. Immediately stop sharing tips with managers. Dock the starting pay of barristas $1-2 an hour, cut benefits by 10-20% and shift that money to the managers.
Problem solved. Everyone is happy. Barristas get all their tips, and managers are fairly compensated for their counter work.
Very rarely do I find myself on the side of management, but this suit is just pure greed with a double shot of entitlement mentality.





















Well, they can keep appealing all the way up to the State Supreme Court. Maybe a higher court will agree with him, but I doubt it.