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1st Circuit: Statutory ‘No’ Means ‘No,’ Entitling Starbucks Baristas to $14M

Nov 13, 2012, 02:19 pm CST

Comments

Excellent result, although it is a shame that baristas were put through the grind by Starbucks to keep all of their tip money. Very heavy handed by Starbucks.

By Yankee on 2012 11 13, 3:41 pm CST

I did not read the case, and I recognize I probably should before commenting. Nevertheless, "not any managerial responsibility" seems quite broad. What if the baristas oversee other baristas, etc.? Is that at least a tidbit of managerial authority significant to breach the "not any" limitation. If the supervisors did 90% of what the baristas do, why can't they receive a portion of the tips? Granted, if the baristas are paid a reduced salary in light of the anticipated tips and the supervisors receive no comparable reduction, than I guess there is a stronger argument that the supervisors should not receive the tips. I think that would be a better basis for the holding than a broad reading of the statute that could easily encompass activities the baristas perform thus precluding them from tip-sharing. If the supervisors receive an unreduced salary, the argument would be that their pay already takes into account and compensates the supervisor for the 90% barista functions and therefore tips are not necessary to fully compensate the supervisor. Conversely, the barista, assuming they make a reduced salary, survive on those tips because their compensation structure relies on receipt of undiluted tips. Just my two cents.

By Curious on 2012 11 13, 4:15 pm CST

@2: Whether the statute is broad or not is irrelevant. As the judge said, "No" means "not any" or "none" or "zero".

By TMJ on 2012 11 13, 4:30 pm CST

The answer is not to share tips. Each barista (including barista's that supervise other baristas a little) can have their own tip jar.

By Dr Phun on 2012 11 13, 5:02 pm CST

@2

You make a great point, yet, we only blame a document for being to broad when it doesn't cover our intentions. Yet, because the intention was to say "If an employee has managerial responsibility than he is in violation" than the document is perfect. It cannot be broad when it's intention is a general one.

By Joshua Neuman on 2012 11 13, 5:44 pm CST

@5 I could not agree more. Clear and unambigous statutes leave little room for argument. As you noted, "if an employee has managerial responsibility than he is in violation" (if he shares tips) is a very clear law. The court agreed and held that if you have ANY (as opposed to some threshold amount) of managerial responsibility, then you are forbidden by the statute from sharing tips. Again, this is clear. Nevertheless, I do not think the line becomes blurred based upon the statute. I think the issue becomes whether a Barista (not a supervisor) has responsibilities or takes certain action that is deemed managerial; therefore, precluding the Barista from tips under the statute (now, granted, my understanding of the managerial hierarchy of Baristas is quite limited). Your point is well received, however. I suppose my argument is misplaced in my previous comment because I am advocating for a change in the statute (a legislative function) as opposed to arguing against the fact-specific disposition of a case by a court analyzing the facts under the statute. The latter, under the circumstances, occurred correctly. The court applied a clear and unambigous statute to a set of facts and reached the correct conclusion. So, to reformat my previous point, I think the statute is wrong and could have unintended consequences. The court got it right, the legislatures may have got it wrong. Considering I am not a resident of Massachusetts, I do not have any vehicle to complain to my state congress man or woman nor does this impact me sufficiently to raise much of a stir. Good point, though, @7, I should have framed my point more clearly.

By Curious on 2012 11 13, 6:16 pm CST

baristas and shifts are both paid more than minimum wage, and tips are not factored into their pay rate. they are purely an extra bonus on top of regular pay. starting shift pay is not much more than starting barista pay because shift supervisors do not do any managerial work at all. they are supervisors, NOT managers. there is a huge difference. assistant managers and store managers do NOT share in tips because they are salaried (and work more than 40 hours a week at the 40 hour pay rate) and are doing the managerial work. store managers (and assistant managers) hire, fire, promote, write reviews, give raises, write corrective actions, write schedules, make any decisions affecting the business aspects of the store, write action plans, set par levels for ordering, set par levels for selling (pastries and sandwiches and milk etc), are held responsible for sales and targets and audits and training partners, etcetcetc. they are the only ones doing the managerial stuff... yes, there are shift supervisors that take on extra responsibilities and do things like ordering or helping to adjust par levels, but baristas do too, so that is not a distinction of one or the other. shift SUPERVISORS make change for drawers (which i believe other employees can do for themselves at other shops or businesses like an independent coffee shop etc), drop extra money into the safe, count the money to deposit, and take it to the bank. they also send people on their breaks... and fill out temperature logs for food safety stuff, but that is just the certified food manager, not necessarily just because they are a shift supervisor... pretty much all of the supervisory stuff they do... oh, and they make sure that tasks get done, but if you have good baristas, they will get the things done without being told by a shift supervisor... so yeah, no managerial stuff there... sorry, but supervisors are VERY different than managers!!!

By just a little barista on 2012 11 13, 8:13 pm CST

@7

You make a good point. Being that my knowledge isn't so good on this topic I would have to side with another's opinion, in this case, I would have to give more credibility to the Boston-based 1st U.S. Circuit Court of Appeals. I enjoyed reading your peice but, and I quote "The Boston-based 1st U.S. Circuit Court of Appeals said the shift supervisors had managerial responsibility, making them ineligible to share in tips under the Massachusetts statute."

Truthfully you make a great point and I enjoyed reading! But credibility has to go to them.

(Also quick tip, if you didn't CAPSLOCK words it would seem less angry, my point is the less angry someone looks than the less emotion it seems they have, which means more logic is portrayed. Anyways good commenting!

By Joshua Neuman on 2012 11 13, 9:40 pm CST

i would have "bolded" instead of caps but there wasnt that option! :) those words were meant to be emphasized, not "shouted". sorry!

By just a little barista on 2012 11 13, 10:24 pm CST

Reading the full opinion of the court they cite the definition of the MA Attorney General for what qualifies as managerial duties which provides clarification for the law.
"The Advisory could not be more clear; it states with conspicuous clarity that "[w]orkers with limited managerial responsibility, such as shift supervisors . . . do not qualify as wait staff employees."
"The Advisory also elaborates on the meaning of "managerial responsibility" — a phrase not defined in the Tips Act itself. The Advisory states that managerial responsibilities encompass "supervising employees and assigning servers to their posts."
"Part 541 of Title 29 of the Code of Federal Regulations, which pertains directly to the federal overtime exemption for managerial and executive employees, identifies "directing the work of employees," "apportioning the work among the employees," and "providing for the safety and security of the employees or the property" as management activities. 29 C.F.R. § 541.102."
Also, the court cites, depositions by Starbucks saying that the shift "runs the shift" and is the ranking employee in the absence of the store manager and/or assistant store manager. After, reading through the entire opinion it is clear that the court decided the case fairly when applying and affirming the district court's decision.
The linchpin of the decision rested upon who is wait staff and who is not. The MA TIps Act stated that wait staff are employees who have NO managerial responsibilities. Shift supervisors count money, have keys to the stores, assign duties and tasks on a daily basis.

By Leatherndevil on 2012 11 14, 1:49 am CST

The result of all this is that if you are the only employee on duty, on site or remotely, for whatever reason, you are, by definition, the Manager, at least for your shift, and can not keep your own tips.

By CA Lawyer on 2012 11 16, 12:50 pm CST

@11 - Strawman argument.

By Train on 2012 11 16, 1:45 pm CST

Having waited tables and tended bar to put me through school, this is a great decision for the wait staff. And, it's a slam against job title inflation and HR minions who want to avoid paying people for the hours they work by giving one a faux management title.

By JP on 2012 11 16, 3:13 pm CST

What I see is Mass has discovered a great way to make a large number of blue-collar workers document their real income for tax purposes instead of continuing to allow these 10,000s workers to continue to freely under-report and hide their real incomes from the fed and state IRS departments. More power to the State here - and this is from a Republican.

If we could just get all the states to force the millions of restaurants and 10s of millions of restaurant workers and bar-keeps in the USA to document, pay taxes on, and pay-out ALL tip-income as documented "bonuses", we could close up the national debt far faster (to the tune of $250 billion a year) than by taxing a handful of "wealthy" people just a little bit more.

By Tax Adjuster on 2012 11 16, 3:29 pm CST

Starbucks should just forbid tipping. Avoid the liability in Massachusetts.

By Why bother on 2012 11 16, 4:06 pm CST

@7 - Sorry, but you are wrong. You're drinking the Kool-Aid here. It might be tasty Kool-Aid, but you're drinking it nonetheless.

I understand that shift supervisors have less responsibility than managers. That's not the issue. The distinction between shift supervision and management is trying to inject some gray into what is a statutory black/white dichotomy.

Q - Do shift supervisors tell baristas what to do? Yes or no.

A - You say that "they also send people on their breaks… " and "oh, and they make sure that tasks get done." (This means "Yes.")

Shift supervisors have little management authority, true. The issue isn't how little - it's whether they have any at all, yes or no. If they have the littlest bit, they don't share tips. That's the law.

By Big Barista on 2012 11 16, 4:09 pm CST

@11 and others--Note this decision only applies to sharing tips, not accepting tips. (Each worker can accept a direct gratuity.) The trouble arises when the business relies on the customer-public paying extra money to compensate the workers. The tips are distributed in place of a portion of minimum wage. So there are laws prohibiting the bosses from scooping up that money for themselves.

The clear solution is for the business to charge the correct prices and pay the correct wages to get the jobs done without relying on tips for paying manager/supervisors.

By m913 on 2012 11 16, 4:21 pm CST

Chutzpah, thy name is Starbucks' management.

By Daniel Lauber on 2012 11 16, 4:33 pm CST

Wow, I can't believe Starbucks would try to pull such a Mr. Potter move in Massachusetts of all states!

By Adamius on 2012 11 17, 9:08 am CST

how am i drinking the kool-aid here? i was a barista for several years, a shift supervisor for several years, and am now a store manager. i was in each of these positions, and i think shifts and baristas should both share tips. i agree that managers should not get tipped, we are salaried and get bonuses. tips are incentive to provide good customer service. for managers, our bonuses are incentive to make sure our baristas and shifts are providing good customer service.

also, for those of you who think that starbucks baristas somehow get less than minimum wage so the tips can add into their pay, you are wrong. in my district, baristas are hired in at $8.60 (one dollar over minimum), and after 6 months they are bumped to $9.06. EVERY 6 months they get another raise (usually $0.25 or greater). Shift supervisors start at $10.45 and are bumped to $11.06 at their 6 months and then again every 6 months after that. i have a few baristas in my store who make over $12. add another $2 or so in hourly tips to this and it is not a bad paying job.

at starbucks, all hourly employees split the tips evenly. fast workers get paid the same as slower people, and friendly people get paid the same as grumpy people. it is the only consistent way to split tips since there are not set schedules and people are coming and going all day long.

like i said, i have been with the company many years and have been a barista, shift, asm, and now store manager. i think it is crappy that massachusetts is doing this. awesome for baristas, because now instead of making $2 in tips, they are making $4, but now their hourly wage plus tips is MORE than any of the shifts are making so not sure how that will be resolved...

By just a little barista on 2012 11 19, 2:03 pm CST

RE: #20, just a little barista: using standard legal rational on your discussion: "the natural extension of what you are saying is this:" there cannot be good customer service at the "lower levels" unless one gets tips. So, our tech-support personnel at our software company should be tipped? Our on-site professional service/consulting folks should be tipped? Isn't that the only way to guarantee good customer service? If the argument is these folks I mention are making more [highly taxed] hourly fees and potential get [heavily taxed] bonuses than Starbucks front-liners, than we are concluding that tipping can be eliminated if hourly pay is raised, and, then everyone could be paying their fair-share of taxes on all of their income, not just the top 1% who pay for 99.999999999999% of all taxes, or whatever the apparent % is as we all know that via unreported tip income the country loses $250 billion - $1 trillion in annual income tax revenue compared to salaried folks making the exact same annual pay as tipped and cashed-paid workers (i.e. administrative assistants, factory workers, hygenists, legal construction workers, etc.) who can't hide their income.

By Tax Adjuster on 2012 11 19, 2:58 pm CST

The bigger travesty here is that Starbucks has hoodwinked anyone into tipping these so called "baristas." I don't see anyone at Starbucks tamping my espresso. They're pushing a button, just like a McDonald's employee. In addition to a lack of legitimate coffee making skills, they're also paid at least minimum wage (unlike waiters and waitresses). I think it's tacky that they put out a tip jar and if I were Starbucks, I'd get rid of them.

By KS Attorney on 2012 11 19, 4:34 pm CST

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