Legal News

San Diego court orders Starbucks to pay $100 million to baristas

By Jason Siegel

San Diego Superior Court Judge Patricia Cowett ruled that Starbucks must pay over $100 million to its baristas, who were wrongly required to share tips with their shift supervisors.

Cowett set damages at $86.7 million, plus 7 percent annual interest, yesterday - based on her earlier ruling that shift supervisors were ineligible because they were managers in the company.

Cowett also plans to issue an injunction to prevent the company from continuing the tip practice. Starbucks says it plans to appeal and postpone the injunction until the appeal is heard.

Attorney David Lowe, who represented the baristas in the class action, estimated over 120,000 past and present employees would receive the damages and that the pay would not come from Starbucks penalizing supervisors for tips already collected.

State labor law prohibits owners, managers or other agents of business owners from getting a share of the tips. Starbucks unsuccessfully argued that shift supervisors aren't managers or supervisors.

The average tip rate at the 2,000+ Starbucks in the state was estimated at $1.87, plus or minus 16 cents, the San Diego Union-Tribune reported. Cowett took the low end of the tip rate, $1.71 and multiplied it by the 50,694,694 hours worked by shift supervisors, The Recorder reported.

A former Starbucks worker told the Union-Tribune that the case set a great precedent because many other companies similarly share tips.

California is Starbucks' largest U.S. market, with about one-fifth of their 11,000 stores nationwide, the Associated Press reported.

The court will hold a post-judgment proceeding on May 1, NBC 11 reported.

Full post as published by Legal Pad | LA on March 21, 2008 (boomark / email).