Starbucks Baristas Lose Battle To Keep Tips

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Across the country, waitstaff have cried foul over tip pools, claiming their employers are unfairly divvying out their hard-earned tips. A group of Starbucks baristas in New York tried to make that case, but on Wednesday, in a potential blow for many in New York's army of food service workers, the state's highest court sided with the coffee chain.

The baristas argued that their shift supervisors, as managers, should keep their fingers out of the tip jar. But the New York Court of Appeals disagreed, issuing guidelines that the work of shift supervisors was similar enough to the work of servers to qualify them for a share of the tips, even if they had some supervisory authority. The case has been knocked back to the Second Circuit for the final ruling.

Despite consistently being among Fortune's Best Companies To Work For, Starbucks pays baristas an average of $8.80 an hour, and shift supervisors earn about $11 an hour, according to State laws usually ban managers from sharing in tips, but Starbucks has been hit with multiple lawsuits because of the murkiness of its shift supervisor position. On the one hand, shift supervisors are part-time, hourly employees, who serve customers and have no hiring or firing authority. On the other hand, they oversee and instruct baristas. They straddle two worlds, and the law has a tough time with straddlers.

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Shannon Liss-Riordan, the attorney who represented the baristas, believes that Starbucks is exploiting this ambiguity in order to offset supervisors' wages with tips.

"It's a fight about who will pay part of the supervisors' wages," says Liss-Riordan. "Will it be Starbucks, which has a lot of money? Or will it be baristas, the lowest-level employee, where every penny of their tips is an important part of their wages?"

After Liss-Riordan won a similar case in Massachusetts last year, disqualifying shift supervisors' from tips, Starbucks increased their starting wage from $11 to $13.89 an hour, according to a labor group, The Industrial Workers of the World Starbucks.

A San Diego judge sided with the baristas in a similar suit in 2008, ordering Starbucks to pay back more than $100 million in tips to coffee servers. But the following year, Starbucks won on appeal, with the court concluding that the supervisors "essentially perform the same job as baristas."

A group of Starbucks assistant managers in New York also sued, wanting in on the tips. The New York court seemed unconvinced on that point, ultimately stating that a person should be disqualified from tips if they have "meaningful or significant authority over subordinates."

For tens of thousands of restaurant workers across the state, that's still a venti-size serving of vague.

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