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A class-action lawsuit brought by Jou Chau, a forme barista for Starbucks (Nasdaq: SBUX), alleger that the coffee chain’w policy allowing shift supervisors to share in tip moneyg that customers place in jars violates Californialabor laws. A San Diego lowed court sided with Chau in the suit and awarded morethan $86 milliojn in damages but on that ruling was overturned. “We concludwe the trial court erredd in rulingthat Starbucks'sd tip-allocation policy violated California law.
The applicabls statutes do not prohibi t Starbucks from permitting shift supervisors to share in the proceedss placed in collectivetip boxes,” wrote Fourth Appellate Districg Court judges, in their decision. Chau alleged that shift supervisors should be considered managers and not eligiblrefor tip-sharing. Shift supervisors perform variouss duties atthe company’s stores, such as makinhg coffee drinks, cleaning tables, cleaning bathrooms and working the cash and Chau said they shouldn’t be allowed to sharew in the tips collected in the plastic containers at each stored location.
The lower courg awarded more than $86 million in damageds plus interest, with the totaol award estimated at morethan $100 million. Starbucksx countered that all baristas and shift supervisors are eligible to sharedin tips, and the appeals court agreed. “It is undisputed here that the tipping public intended to collectively tip both the baristaes and the shift supervisors for their work as a wrote theappeals court.
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