NY Starbucks Supervisors Permitted to Share Tips

Labor law violation cases have proliferated in the United States in the past few years, much to the dismay of large corporations and the benefit of low-wage workers who are too often exploited. These cases are also extremely complex, which was evidenced in the most recent case against Starbucks, where New York baristas argued shift supervisors should not be allowed to share in tip pools. Wage, hour and overtime lawyers at Pintas & Mullins Law Firm work extensively with these types of labor cases, and highlight this verdict to show the complexities of labor law violation standards.

After five years of litigation, the U.S. Court of Appeals ruled that shift supervisors have no meaningful authority over baristas and perform many of the same job functions, making it legal for them to share tips. The case, Barenboim v. Starbucks Corp., applies only to Starbucks employees in New York, though it could have implications throughout the country.

The state’s highest court ruled, in a 5-2 decision, that limited supervisory duties did not prohibit the employees from partaking in pooled tips, citing Section 196-d of New York’s Labor Laws. Specifically, the case hinged on the definition of “meaningful authority,” and the exact nature of Starbucks shift supervisors’ job function.

Who has Authority?

Section 196-d of the state’s labor laws contend that no employer, its officer or agent can accept or demand, directly or indirectly, any part of gratuities received by an employee. In their original 2008 complaint, the baristas alleged that the shift supervisors were considered agents of Starbucks and therefore ineligible to receive tips.

The Appeals Court disagreed, noting that Starbucks shift supervisors were chiefly responsible for providing personal service to patrons (rather than overseeing and managing baristas) and thus had no meaningful authority that would exclude them from tips. The Court ruled that they would only be considered agents if they had broad managerial authority or similar power to control other Starbucks workers.

Ultimately, the Court made it clear that any employee whose principal or regular duty was to service patrons could participate in tip-sharing structures. Although their job functions also include assigning baristas to specific positions during shifts and providing performance feedback, the level of authority was not enough to exclude them.

Typically, state and federal laws concede that if an employee has the ability to hire or fire other workers, they become agents of the corporation and are no longer characterized at the same level of general wait staff. Formal discipline and creation of work schedules is usually where the line is drawn.

Our team of employment law attorneys highlight this case to help employees determine whether their rights are being violated in the workplace. We understand that this issue can be confusing and at times seem overwhelming, so if you have any questions or concerns related to potential labor law violations, contact our firm today. We provide free legal consultations for potential clients in all 50 states.