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Starbucks Brews Trouble over Tip Jar
by
findingDulcinea Staff
A judge ordered Starbucks Corp. to pay $86.7 million plus interest to thousands of California baristas for forcing them to share tips with shift supervisors.
30-Second Summary
The judge in the case ruled that Starbucks' tip pool policy violated California’s labor code, because “agents” of the company, or the shift supervisors, were sharing tips with baristas.
The money from the jars was apportioned to employees based on the number of hours worked. The average tip received was $1.71 an hour. While the decision is the latest setback to efforts by newly reinstated CEO Howard Schultz to revive the company’s ailing stock, some question the practice of tipping in coffeehouses at all.
Eric Felten of The Wall Street Journal tells the java giant to “lose the tip jar,” bemoaning the ubiquity of coffeehouse gratuity and Starbucks’ role in its propagation. Felten writes that the tip jar encourages staff animosity, makes customers feel uncomfortable and subsidizes the company’s payroll costs.
“When you toss a dollar into the cup, you’re really making a donation to Starbucks—and I can think of needier beneficiaries,” Felten says.
A press statement released by the company indicates that the coffee behemoth will appeal the ruling.
“The decision today, in our view, represents an extreme example of an abuse of the class action procedures in California’s courts,” the statement reads.
The money from the jars was apportioned to employees based on the number of hours worked. The average tip received was $1.71 an hour. While the decision is the latest setback to efforts by newly reinstated CEO Howard Schultz to revive the company’s ailing stock, some question the practice of tipping in coffeehouses at all.
Eric Felten of The Wall Street Journal tells the java giant to “lose the tip jar,” bemoaning the ubiquity of coffeehouse gratuity and Starbucks’ role in its propagation. Felten writes that the tip jar encourages staff animosity, makes customers feel uncomfortable and subsidizes the company’s payroll costs.
“When you toss a dollar into the cup, you’re really making a donation to Starbucks—and I can think of needier beneficiaries,” Felten says.
A press statement released by the company indicates that the coffee behemoth will appeal the ruling.
“The decision today, in our view, represents an extreme example of an abuse of the class action procedures in California’s courts,” the statement reads.
Headline Links: Starbucks ordered to refund tips to baristas
With 7 percent interest, the amount Starbucks is required to pay could reach as high as $106 million. “That's slightly more than half of what the company earned in profits during the most recent quarter,” reports the Seattle Post-Intelligencer. “This is sending a message that you may be a big corporation and you may want to do it your way, but you still have to comply with the law and you can’t subsidize your labor force,” David Lowe, lead attorney for the plaintiffs, said Thursday.
Source: Seattle Post-Intelligencer
The money collected in the tip jars was put into safes at each store and apportioned weekly to each employee based on the number of hours worked, said the plaintiffs’ attorney Terry Chapko. San Diego County Superior Court Judge Patricia Cowett said that the average tip baristas and supervisors received was $1.71 an hour.
Source: Los Angeles Times
Background: Recent Starbucks news
Last week, Starbucks announced that it would be introducing new, customer-friendly features at its locations in an effort to revive the company’s ailing share price.
Source: findingDulcinea
Slate interviewed owners of independent coffee shops who claimed that a Starbucks in their vicinity did not deter business, prompting disbelief and angry responses.
Source: findingDulcinea
Reactions: Starbucks Corp. and employees respond
A press statement released by Starbucks Corp. indicates that the company will appeal the ruling. Starbucks asserts that its shift supervisors deserve a share of the money received in tip jars. “The decision today, in our view, represents an extreme example of an abuse of the class action procedures in California’s courts. Starbucks therefore plans to appeal and to seek a stay of the court’s ruling prohibiting shift supervisors from receiving tips in the future while the appeal is pending.”
Source: The Starbucks Web site
A heated debate over the tipping ruling has been raging at the blog Starbucks gossip. One reader referred to as DT writes that the judges ruling is fair: “The shift supervisors if using proper deployment do not perform the same tasks as baristas do.” But another reader, Vicki Verona, writes that she doesn’t “think Starbucks should be blamed for this. If the law really doesn't let shifts get tips, the law is wrong. We're not managers and we're just getting tips that WE EARN.”
Source: Starbucks Gossip blog
Related Topic: The point of tipping
“Lose the tip jar” is Eric Felten’s advice to Starbucks Corp. in a Wall Street Journal story chronicling the history of tipping and its spread across the nation. Felten points out that the tip jar encourages staff animosity and makes many customers uncomfortable. “As things stand, the tip jar subsidizes the company’s payroll costs. So when you toss a dollar into the cup, you’re really making a donation to Starbucks—and I can think of needier beneficiaries,” Felten says.
Source: The Wall Street Journal (registration may be required)
A man was killed earlier this month after chasing two suspects who stole a Starbucks tip jar in St. Louis, Mo. Surveillance video shows a man in line swiping the tip jar, leading to the chase. The suspects later ran over the 54-year-old Starbucks worker with their Ford Taurus.
Source: Chicago Sun-Times
Reference: Guide to tipping
FindingDulcinea’s guide to eating at restaurants has a section on dining etiquette, including links to tipping advice.
Source: findingDulincea
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