Court says Starbucks baristas may pool tips

Advisory opinion clarifies New York’s tip-sharing law

Starbucks Corp. just won a battle with its own baristas.

First, some background. A few 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 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—isn’t legal because supervisors have managerial responsibility and therefore shouldn’t be entitled to tips.

One of the cases wound up in the 2nd Circuit, which asked the New York State Court of Appeals for guidance on the matter.

Yesterday, the state appeals court issued an advisory opinion in which it said Starbucks shift supervisors, but not assistant managers with significant managerial authority, could share in the baristas’ tips. The court reasoned that shift supervisors spend much of their day doing the same tasks as baristas and only have limited authority.

Stay tuned for updates on the 2nd Circuit’s decision.

Read Bloomberg and the New York Times for more information.

For more InsideCounsel stories about tip-pooling, read:

Labor: The benefits and obstacles to a valid tip pooling arrangement

Starbucks appeals $14.1 million tip-pooling class action suit

California Court Reverses Starbucks Tip-sharing Decision

Tipping the Balance

Contributing Author

Ashley Post

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