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California Court of Appeals strikes down “Starbucks” decision

California Court of Appeal Overturns Starbucks Tip Pooling Verdict

By Robin E. Weideman

Earlier today, a California Court of Appeal overturned a recent trial court verdict awarding a class of current and former Starbucks baristas $86 million in tips they were required to share with shift supervisors.  The Court of Appeal held in Chau v. Starbucks that the trial court erred in ruling that Starbucks’ tip allocation policy violated California law.  More specifically, the court explained:


“The applicable statutes do not prohibit Starbucks from permitting shift supervisors to share in the proceeds placed in collective tip boxes.  The court’s ruling was improperly based on a line of decisions that concerns an employer’s authority to mandate that a tip given to an individual service employee must be shared with other employees.  The policy challenged here presents the flip side of this mandatory tip-pooling practice.  It concerns an employer’s authority to require equitable allocation of tips placed in a collective tip box for those employees providing service to the customer.  There is no decisional or statutory authority prohibiting an employer from allowing a service employee to keep a portion of the collective tip, in proportion to the amount of hours worked, merely because the employee also has limited supervisory duties.”


Read the rest of the article here:


Here’s a pictoral representation of the direction that California courts seem to be taking:


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