State Discord as to Starbucks Employee Positions

By: Marni Weiner

There has been some debate as to whether certain employees at Starbucks can share in the tip pool, and it all depends on the particular state’s labor law.  New York’s highest court issued an advisory opinion on June 26th, 2013 addressing the issue of whether a shift supervisor can have a share of the tip pool.[1]  The advisory opinion will now guide the Court of Appeals for the Second Circuit.[2]

 

Starbucks employs a barista who makes the coffee, a shift supervisor, an assistant store manager and at the top of the chain, store managers.[3]  Baristas and shift supervisors are paid hourly, while the assistant managers and managers are paid on a salary basis.[4]

 

Two cases arise out of the New York court system.  The first set of plaintiffs in Barenboim v. Starbucks Corp argue that only baristas are entitled to participate in tip sharing, not shift supervisors, because of the managerial aspects of their job.[5]  The shift supervisors argue that most of their job entails customer service, entitling them access to the tip pool.[6]  Assistant managers also filed suit in Winans v. Starbucks Corp, claiming that they should be able to participate in the tip jar as well as baristas and shift supervisors.[7]

 

Section 196-d of New York’s Labor Law prohibits managers, their agents and other supervisors from receiving a cut of the tip pool.[8]  The issue turns on whether a shift supervisor is considered an agent of the manager.  If the shift supervisor is a manager’s agent, then Section 196-d excludes them from sharing in the tip jar due to their “managerial duties.”[9]

 

In Barenboim, the New York Court of Appeals held for Starbucks’ policy in deciding that shift supervisors can take from the tip pool, but not the assistant managers.[10]  The Court reasoned that shift supervisors work hourly like baristas and do not have enough authority as an assistant manager or store manager does to disqualify them from sharing in the tip pool.  Shift supervisors were likened to restaurant captains, because they have authority over wait staff but provide enough customer service that they can still participate in the tip pool.[11]  Based on this reasoning, the court further held in Winans that assistant managers cannot take money from the tip pool as they “clearly have authority over others.”[12]  The managers and assistant managers receive not only a salary but also benefits that include “quarterly bonuses, paid vacation and sick days.”[13]  Lastly, these managers have hiring and firing power, distinguishing them from baristas and shift managers who are mainly involved in customer service and do not have such authority.[14]

 

A similar case came out differently in Massachusetts, causing Starbucks to “restructure” the shift supervisor position.[15]  The First Circuit in Matamoros v. Starbucks Corp. held that shift supervisors had definite managerial responsibilities, and therefore could not participate in the tip pool.[16]  The court held that the Starbucks shift supervisors were not like wait staff, and therefore ineligible to take from the tip pool according to The Tips Act in Massachusetts.[17]  The restructuring of the position led Starbucks to call the shift supervisor a “shift manager,” giving them benefits packages in order to separate them from baristas and to “make up for the loss of tips.”[18]  Starbucks was also held liable for barista gratuities from 2005 to 2011, which they now have to reimburse those workers for.[19]

 

The position of a shift supervisor at Starbucks falls into a grey area straddling both managerial responsibilities and mere customer service, begging the question as to how many other workers will begin to sue before a clear standard is set, if that is even possible.


[1] Steven Greenhouse, New York Court Sides With Starbucks on Tip Rules, N.Y. Times, June 26, 2013, http://www.nytimes.com/2013/06/27/business/new-york-court-sides-with-starbucks-in-tip-rules.html?_r=2&.

[2] Lisa Jennings, NY Court of Appeals Issues Opinion on Starbucks Tip-Pooling Cases, Nation’s Restaurant News, June 27, 2013, http://nrn.com/government/ny-court-appeals-issues-opinion-starbucks-tip-pooling-cases.

[3] Barenboim v. Starbucks Corp., 2013 WL 3197602 (N.Y. June 26, 2013).

[4] Jennings, supra note 2.

[5] Id. 

[6] Id. 

[7] Shira Forman, New York State Court of Appeals Backs Starbucks Policy on Tip-Pooling, Labor & Employment Law Blog (July 10, 2013), http://www.laboremploymentlawblog.com/ 2013/07/articles/wage-and-hour/new-york-state-court-of-appeals-backs-starbucks-policy-on-tip-pooling/.

[8] Id. 

[9] Jennings, supra note 2.

[10] Id. 

[11] Forman, supra note 7.

[12] Chris Isidore, Starbucks Baristas Must Share Some Tips, CNN Money, June 27, 2013,  http://money.cnn.com/2013/06/27/news/companies/starbucks-baristas-tips/.

[13] Id.

[14] Id.

[15] Lisa Jennings, Starbucks Restructures ‘Shift Supervisor’ Position in Mass., Nation’s Restaurant News, Jan. 29, 2013, http://nrn.com/latest-headlines/starbucks-restructures-shift-supervisor-position-mass.

[16] Matamoros v. Starbucks Corp., 699 F.3d 129 (1st Cir. 2012).

[17] Robyn Hagan Cain, Starbucks Tip-Pooling is Illegal in Massachusetts, FindLaw, Nov. 12, 2012, http://blogs.findlaw.com/first_circuit/2012/11/starbucks-tip-pooling-is-illegal-in-massachusetts.html.

[18] Jennings, supra note 15.

[19] Id. 

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