Four years ago, experts noted an uptick in tip-pooling lawsuits—suits in which plaintiffs claim their employers’ policies of pooling tips among certain employees violate state employment laws. The increase was due in part to a string of suits in which Starbucks Corp. baristas filed proposed class actions against the coffee chain, arguing that the company’s tip-sharing policy—in which tips are pooled among baristas and shift supervisors—aren’t legal because supervisors have managerial responsibility and therefore shouldn’t be entitled to the tips.
One of the suits, Matamoros v. Starbucks Corp., claimed Starbucks’ tip policy violated the Massachusetts Tip Statute, which defines a tip as a “sum of money … given as an acknowledgment of any service performed by a wait staff employee.” The statute defines a wait staff employee as someone who directly serves food and beverages or clears tables in a qualifying establishment and has no managerial responsibility.
Starbucks argued that its shift supervisors were actually wait staff with limited supervisory duties that didn’t really constitute as managerial responsibility. But last year, a district court agreed with plaintiffs, granted them partial summary judgment and recommended class certification. In January, the district court judge made his final ruling and ordered Starbucks to pay $14.1 million.
Now, Starbucks is appealing the judgment. According to news reports, oral arguments began Sept. 11. The coffee chain maintains that its shift supervisors are wait staff entitled to tips and that the district court erred in its decision.
For more InsideCounsel stories about foodservice employment disputes, read:
Darden Restaurants accused of underpaying servers
Wage and hour suits on the rise, study says
Batali, Bastianich to pay $5.25 million for allegedly cheating workers
