The Burlington Buzz
DOL Opinion Letter on Volunteerism

Starbucks Tip-Sharing Case Gets Ruling

A San Diego Superior Court judge reversed her earlier tentative ruling and ruled that a group of Starbucks employees can proceed to trial on a class action alleging that they were unlawfully forced to pool and share their tips with shift supervisors. The case, Chou v. Starbucks Corp., could affect more than 100,000 at over 1,400 California Starbucks locations. Judge Patricia Yim Cowett had issued a tentative ruling against the class, which was certified in March, but after hearing argument on the matter, took the issue under submission for a week, and reversed course. Congratulations to class counsel Terry Chapko and Eric Aguilera.

The general rule on tip-pooling in California is that employees who serve the public and receive tips can be required to pool their tips with the other tipped employees, but owners and management are not permitted to take any share of those tips. In the Starbucks case, the issue is whether shift supervisors are considered "management" for the purpose of determining eligibility for tip pool revenues.

Starbucks did secure one favorable ruling, in which the judge threw out "waiting time penalties" on behalf of former employees who might have been eligible for up to 30 days pay for having to wait too long after termination or resignationto receive their wages. Tips, like most employee compensation, are considered wages under the California Labor Code.


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