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Saturday, June 22, 2024 | Back issues
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Circuit Split for Tipping of Starbucks Baristas

MANHATTAN (CN) - If you are a Starbucks barista living in New York seeking a greater cut of your tips, it may be time to consider moving to Massachusetts.

The 2nd Circuit, whose jurisdiction extends to New York, Vermont and Connecticut, ruled against baristas in a class action claiming that their shift supervisors should not be allowed to grab a cut of their bounty under state labor law.

In 2008, baristas Jeana Barenboim and Jose Ortiz sued Starbucks for more than $5 million on behalf of more than 5,000 of their comrades serving at 400 New York stores.

They claimed that the chain's euphemistic corporate structure made them share their hard-earned tips with their "shift supervisors," whom they alleged to be actually their bosses.

This put the company in violation of New York Labor Law, according to the lawsuit.

Starbucks, on the other hand, countered that shift supervisors spend the bulk of their time performing the same duties as baristas: serving food and drinks to customers. They also assign baristas to certain positions during shifts, administer break periods, direct the flow of customers, and give feedback to baristas.

In addition, shift supervisors have the authority to open and close stores, change the cash-register tills and deposit money in the bank.

Even though they cannot hire or fire staff, shift supervisors can discipline baristas, report their job performances to managers, and coordinate their breaks and schedules, Barenboim noted.

On Thursday, the 2nd Circuit found in a 5-page, unsigned summary order that these duties were not enough to qualify shift supervisors as employers under state law.

The three-judge panel's ruling upheld U.S. District Judge Laura Taylor Swain's granting of summary judgment to Starbucks.

Almost exactly one year ago, the Boston-based 1st Circuit reached precisely the opposite conclusion when it upheld a $14 million judgment against Starbucks in a class action of 2,500 baristas suing under the Massachusetts Tip Act.

That decision scorched Starbucks practices and praised Massachusetts for being "in the regulatory forefront on these cutting-edge issues" of gratuities law.

Unlike New York Labor Law, the Massachusetts Tip Act mandates that only employees with "no managerial responsibility" can qualify as "wait staff."

"'No' means 'no,' and we interpret that easily understood word in its ordinary sense: 'not any,'" Judge Bruce Selya had written for the 1st Circuit.

Hammering home the point, the decision cites the entries for "no" in Merriam-Webster, the American Heritage Dictionary and Random House Dictionary.

By contrast, New York State Labor Law's states in Section 196-D: "No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee."

The statute did not define the level of managerial responsibility made someone an employer.

When the 2nd Circuit originally heard Barenboim's appeal, the court originally punted that question the New York Court of Appeals, which limited tip collecting to employees who are "ordinarily engaged in customer service."

Daniel Kirschenbaum, who represents Barenboim for the firm Joseph, Herzfeld, Hester & Kirschenbaum, did not immediately respond to a request for comment. The lawyers typical success advocating for restaurant workers drove New York Magazine to ask, "Why Are New York's Chefs Afraid of This Man?"

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