A US Court of Appeals panel in Boston upheld a lower court ruling that found Starbucks owes Massachusetts baristas more than $14 million for violating state laws preventing supervisors from sharing in tips pools.
Starbucks baristas challenged the Seattle coffee chain’s practice of requiring them to share tips with shift supervisors, according to a class-action lawsuit filed in 2008. Last year, a federal judge ruled against Starbucks and the company appealed that decision.
Starbucks had argued that shift supervisors did not have managerial responsibilities. In a statement after the ruling, the company said, “The court has ruled and we will respect their decision by adjusting our tipping policy. . . . We are still evaluating the best way to change our tipping policy in Massachusetts to ensure compliance with state law.”
Shannon Liss-Riordan, a lawyer representing the workers, said the ruling issued on Friday affects roughly 11,000 baristas who worked at Starbucks between 2005 and 2011. She said interest on the judgment raises the total closer to $18 million.
Liss-Riordan said she filed a follow-up case because Starbucks has continued the practice of forcing tips to be shared. That case was stayed pending the US Court of Appeals ruling. She expects the judgment and interest in the second case to total nearly $6 million.
“Just because they’re Starbucks, they can’t ignore the law that protects Massachusetts workers,” Liss-Riordan said.
Other companies have faced troubles with the state’s tipping laws. In a 2010 lawsuit, a Dunkin’ Donuts employee accused managers of sharing in tip pools. And in 2011 Dunkin’ franchise owners began pushing for a change in state law that would allow shift supervisors to share in tips.