Starbucks Appeals $14.1M Barista Tip Pooling Class Action Settlement

By Matt O'Donnell

 

The legal battle over Starbucks’ tip pooling policy continues to percolate in Massachusetts, where the coffeehouse giant is appealing a $14.1 million class action lawsuit settlement awarded to baristas there in the case Matamoros v. Starbucks Corp.

It’s the latest in a 4-year battle that began in 2008 when baristas sued Starbucks for violating Massachusetts tips laws that only allow wait staff to share in tip pools and prohibits management from receiving any portion of employees’ tips.  Starbucks argued that shift supervisors are hourly wait staff, not managers, because they have only “limited supervisory” tasks and “managerial responsibility.”

U.S. Magistrate Judge Leo Sorokin rejected that argument in February 2011, writing, "Starbucks' shift supervisors have at least some managerial responsibilities, and thus are not 'wait staff employees' as defined by the statute.”

In March 2011, Judge Nathaniel Gorton of the District of Massachusetts considered Sorokin’s decision in certifying the class, which consists of all baristas who worked at any Starbucks store in Massachusetts between March 25, 2004 and February 8, 2011. Judge Gorton awarded the baristas $14.1 million in damages, finding that Starbucks’ shift supervisors are prohibited from receiving money from any tip pools under Massachusetts law.

Starbucks is currently appealing the $14.1 million Starbucks barista settlement in the U.S. Court of Appeals for the First Circuit.

Oral arguments began on September 11, 2012, with Starbucks asserting that the ruling contradicts the tips law, which is designed to ensure that service employees receive the tips from customers. The company further claims that the named Plaintiffs don’t represent the interests of former baristas in the Class that were promoted to shift supervisors and who now reap the benefits of the current tip policy.

The Plaintiffs’ attorneys claim that, “There’s a Starbucks policy that a shift supervisor, assistant manager or manager must be on the premises of a store at all time. Just because a management style or a company’s philosophy may be a quote more collaborative style doesn’t mean that there aren’t people who have a managerial responsibility.”

Plaintiffs’ attorneys further debated that, "Someone is always in a position of making the ultimate determination throughout the entire work shift… The buck still stops with someone."

The Massachusetts Starbucks Barista Tip Pooling Class Action Lawsuit case is Hernan Matamoros v. Starbucks Corporation, Case No. 12-1277, U.S. Court of Appeals, First Circuit.

 

Updated October 23rd, 2012

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