Starbucks Wins Reversal of $86M Tips Verdict

     (CN) – Starbucks did not violate its baristas’ rights by letting shift supervisors share the collective tips, a California appeals court ruled, saving the company from paying an $86 million restitution award.




     Jou Chau, a former barista, led a class action against the coffee company, claiming the tip policy violated the Unfair Competition Law. The trial court sided with the baristas and imposed the restitution award.
     Justice Haller of the San Diego-based appeals court ruled that the trial court based its decision on an incorrect line of cases, which related to an employer’s authority to mandate that an individual employee must share tips with co-workers.
     Haller said those cases do not apply to Starbucks, where tips go into a container, not to individual employees.
     “There is no decisional or statutory authority prohibiting an employer from allowing a service employee to keep a portion of the collective tip, in proportion to the amount of hours worked, merely because the employee also has limited supervisory duties,” Haller wrote.
     Haller reversed the decision and ordered the trial court to enter a judgment for Starbucks.

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