$106 Million Award For California Starbuck’s Employees For Tip Pool Violations
A California judge, in a four paragraph order, has ruled that Starbuck’s violated California law by sharing tips with supervisors. The $106 million award includes $19 million in interest. The court also entered an injunction barring Starbuck’s supervisors from sharing employee tips in the future.
The story is well covered here (Manpower Employment Law Blawg), here (Wage Law — has quotes from the parties to the case), here (Point of Law), here (Workplace Prof Blog) and here (Law.com).
This case only highlights the need for employers with operations in California to spend the time and money to review their employment and wage/hour practices for compliance with California law. Wage-related class actions are now legion in California and can easily result in significant legal expenses and, if you lose, damages. If you have operations in California, do not assume that you are in compliance merely because you are in compliance elsewhere.
March 25th, 2008 at 9:39 pm
Wow, $106 million is a lot of money for one state. This website (http://www.ibrattleboro.com/article.php/20060530170835746/print) says that Starbucks had 2,000 outlets in California in 2006. Even assuming they have 3,000 outlets in the store today, that amounts to over $35,000 in tips at each store. Seems like either the supervisors are really grabbing a lot of dollar bills out of the jar or Starbucks just got gouged.
March 27th, 2008 at 4:14 pm
It may cover up to a four-year period depending on which statute they brought the claim under. The California unfair competition law, Business & Professions Code section 17200, has a four-year limitations period, for example. It would be interesting to see what time period we are talking about in this case.