Labor & Employment Law

Starbucks Really Hits The Grinds

By Mark E. Tabakman, Esq.

A state court judge in California has ordered Starbucks to pay more than 105 million dollars in back wages to servers and other employees because the tip pool included managers, which is a clear-cut  violation of the law.

There are 120,000 people covered in the case.  The court also ordered injunctive relief, barring Starbucks from continuing to have management-type people taking part in the tip pool.  The court ruled that the supervisors were "agents" of the company and thus could not share in the tip pool.  This sends the clear message that even huge corporations are not above the law.  The Company plans to appeal.  More to follow.

The lesson---this all started from the complaint of a single employee, which then mushroomed into this gigantic debacle.  Every company, restaurant, trucking company, computer software company, whatever, must continually analyze its compensation practices, with an eye towards the special industry that the employer is in and any special rules (state or federal) that apply to that industry/business.

The ever present danger of a single employee starting a nationwide class action is the specter that should scare employers into such analyses. 

Full post as published by Wage & Hour - Development & Highlights on April 04, 2008 (boomark / email).