Legal News

A $100 Million Payday for California Baristas?

By Dan Slater

After college, the Law Blog worked briefly as a cook at an Irish Pub — seasoning burgers, battering cod for fish and chips, and shucking oysters for happy hour. We loved the job, but we didn’t like the tip system. While we did most of the food service work — making the food, doing the dishes — the bartenders, who merely served the stuff, only gave us 25 cents for every dollar in tips they made.

Though we never thought of suing, the idea occurred to us this morning as we read about the big Starbucks barista victory out in San Diego. According to reports, Superior Court Judge Patricia Cowett said the coffee giant must pay baristas $86 million, plus interest, for using tips to pay shift supervisors. California’s tip-pooling law says that gratuities meant for hourly workers can’t be taken by an employer or its “agents” — and Judge Cowett found that Starbucks supervisors were “agents.” (Here’s another report from the AP, via the NYT.)

David Lowe, a partner at San Francisco’s Rudy Exelrod & Zieff who represented the statewide class of about 120,000 baristas, reportedly said the total judgment will exceed $100 million. Based on expert testimony, Cowett pegged the average tip rate at $1.71 an hour and multiplied it by the 50,694,694 hours worked by shift supervisors.

Starbucks was represented by Akin Gump Strauss Hauer & Feld partners Daniel Nash and Joel Cohn, in Washington, D.C. In an e-mail, Valerie O’Neil, Starbucks’ director of global communication, reportedly wrote that Cowett’s ruling is “not only contrary to law, it is fundamentally unfair and beyond all common sense and reason. . . . Starbucks believes that our shift supervisors deserve their fair share of the tips that they receive from the tip jars in our California stores.”

Lowell disagreed, saying, “Starbucks has lots of other ways it can compensate shift supervisors … but the money has to come from Starbucks, not from the [tip] pool.”

Full post as published by Law Blog - WSJ.com on March 21, 2008 (boomark / email).