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Wednesday, December 6, 2023
Courthouse News Service
Wednesday, December 6, 2023 | Back issues
Courthouse News Service Courthouse News Service

Starbucks Scalded Over Barista Tipping in MA

(CN) - Starbucks baristas can keep more than $14 million for proving that the coffee chain enforced a tipping policy that is illegal in Massachusetts, the 1st Circuit ruled.

"As society matures and employment law evolves, legislatures have lavished more attention on the policies and practices used by employers with respect to customer gratuities," Judge Bruce Selya wrote for a three-member panel. "Massachusetts is in the regulatory forefront on these cutting-edge issues."

The court estimates that the state boasts about 150 outlets.

In 2008, a class of 2,500 baristas claimed that the chains forced them to share their tips with supervisors, in violation of the state's Tips Act, found in chapter 149 of Massachusetts General Laws.

The statute prohibits sharing tips for wait staff with managers.

In ruling in favor of the baristas, a federal judge found that the law "says what it means and means what it says," according to the 1st Circuit opinion. The Boston-based federal appeals court affirmed Friday.

"After careful consideration of a fundamental (and previously unanswered) interpretative question, we hold that the plain language of the Tips Act prohibits the defendant's tip-pooling policy," Selya wrote. "We also reject the parties' other claims of error. When all is said and done, we leave the combatants where we found them."

Sarcasm over corporate nomenclature at Starbucks drips from the 26-page ruling.

"Starbucks euphemistically describes the employees who staff its shops as 'partners,'" Selya wrote. "Within that designation, however, employees are divided into four subcategories: store managers, assistant managers, shift supervisors, and baristas."

The ruling rejects Starbucks' claimed that its supervisors are wait staff, not managers.

"The Tips Act states unequivocally that only employees who possess 'no managerial responsibility' may qualify as 'wait staff,'" Selya wrote. "'[N]o' means 'no,' and we interpret that easily understood word in its ordinary sense: 'not any.'"

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

"Unless we are prepared to ignore both the legislature's use of the word 'no' and the commonly accepted meaning of that word - and we are not - it follows that if an employee has any managerial responsibility, she does not qualify as 'wait staff' eligible to participate in tips pools under the provisions of the Tips Act," Selya wrote.

"Nor is this construction of the statute unreasonable," he added. "While the legislature could have chosen a different way to grapple with the vexing problem of pooled tips, a bright-line rule has obvious virtues.

"The legislative history and what little case law there is confirm the conclusion that the Tips Act should be read to bar employees who possess any managerial responsibilities from participating in tips pools with 'wait staff' employees."

An earlier version of the Tips Act made "primary duty," rather than "no managerial responsibility," the standard, according to the ruling.

The judges said this phrasing later changed to create a "more precise standard," which the state attorney general clarified even further.

"In this case, all roads lead to Rome," the opinion states. "The plain language of the Act, the legislative purpose underlying it, and the attorney general's interpretive guidance coalesce to counsel in favor of the conclusion that Starbucks' Massachusetts-based shift supervisors are not 'wait staff' within the meaning of the Tips Act. The evidence, even when viewed in the light most favorable to Starbucks, admits of no other plausible conclusion. Since shift supervisors are not 'wait staff,' the District Court did not err in holding them ineligible to share in tips pools with baristas."

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