In an opinion that we have been awaiting, late last week, the U.S. Court of Appeals for the First Circuit affirmed the Massachusetts federal court’s ruling that Starbucks violated the Massachusetts Tip Act by requiring baristas to share with shift supervisors tips left by customers.  The First Circuit agreed with the lower court that Starbucks shift supervisors have some managerial responsibilities and therefore cannot share in the tips.  The Tip Act prohibits employers from requiring “wait staff employees” – who are defined in the Act as having “no managerial responsibility” and whom the parties agreed include Starbucks baristas – from sharing tips with anyone who is not a wait staff employee.   Starbucks argued that its shift supervisors have no managerial responsibility because, just like baristas, they spend the vast majority of their time serving customers.  The First Circuit wasn’t buying it, noting that the Act has a bright-line test for defining wait staff employees, that the “no”  in “no managerial responsibility” means “no,” and that shift supervisors do not pass the test because they are, for example, “charged with opening and closing the store, handling and accounting for cash, and ensuring that baristas take their scheduled breaks.”  The court also said that Starbucks’ internal documents explaining that shift supervisors “‘directly manage’ three to six other employees while on shift” were “potent evidence” against Starbucks.  The First Circuit also left intact the lower court’s certification of a class of Massachusetts baristas and its award of damages to them of over $14 million – which includes $7.5 million in tips that Starbucks allocated to shift supervisors.  We are still on the lookout for how the New York Court of Appeals will rule in a similar case challenging Starbucks’ tip pooling practices under New York Law.  

• Wage and Hour‎

Starbucks connoisseurs appreciate the difference between a Venti Half-Caf Americano and a Single Grande White Chocolate Mocha.  But, when they drop change in the tip box before walking away with their morning caffeine fix, do they appreciate the differences between a barista and a shift supervisor?  How about between a shift supervisor and an assistant store manager (“ASM”)?  How about between an ASM and a store manager?  Starbucks customers may not know these differences, but they are the key to resolving questions that the U.S. Court of Appeals for the Second Circuit has just certified to the highest New York state court in two cases brought against Starbucks. One of the cases was brought by baristas; the other by ASMs.

• Wage and Hour‎