Starbucks Tip Jar New York Court of Appeals Case Will Reverberate Across New York Restaurant Industry

The Starbucks tip jar has now become the focal point of a case before the New York State Court of Appeals, and their decision will be felt by all food and restaurant service industries as it's determined who can access the funds in the Starbucks tip jar.  

Ostensibly, the battle is between the managers and the lower level baristas in Starbucks. 

The New York Court of Appeals was asked by a federal court to interpret New York's labor law and the definition of an employer's agent, in this case, the Starbucks managers who may or may not be able to take the barista's tips.

The low-level Starbucks baristas who serve customers also share tips based on weekly hours worked.

Assistant managers don't get the gratuity and want some.

Shift supervisors with limited management responsibilities and who also serve customers are involved in the tip sharing.

It's a myriad cluster of responsiblity at Starbucks and that's why it's being reviewed by the highest court in New York. 

A barista named Erica told CBS Radio in New York "The baristas work more on the floor. Yes, managers do interact with customers but it's more the baristas who connect with the customers so they deserve the tips more." 

Another barista countered with "We all should get them, we should equally share them."

Such is the devisive nature of the case pitting one level of employee against another, with Starbucks as the corporate company behind the mess.

The Second Circuit U.S. Court of Appeals is currently reviewing separate lawsuits against Starbucks by baristas and assistant managers who want to get a piece of the Starbucks tip jar cash. 

A company "agent," must, by law, not touch the tip jar. 

But who among Starbucks' staff is considered an agent?

The hospitality industry groups say the state court decision will go much further than just the corporate culture of Starbucks, and will likely affect the 42,000 plus business statewide and 250,000 hospitality workers in the greater New York City area. 

Attorney, Shannon Liss-Riordan, filed the lawsuit against Starbucks on behalf of her clients, Jeanna Barenboim, Jose Ortiz and other baristas.  

"Starbucks has not seriously disputed that its shift supervisors are supervisors,"  she wrote in her brief.

Her clients are against sharing tips weekly with supervisors who also assign job stations, schedule breaks and receive higher wages in more of a management capacity. 

On the other side is attorney, Adam Klein, representing the assistant managers, who also service customers and since they lack the authority to hire or fire employees, "they should not be considered company agents under law," he wrote. 

Starbucks company spokesman, Zack Hutson, said Starbucks tip jar policy ensures baristas and shift leaders, who spend more than 90 percent of their time serving customers, share equally in the service tips.

How they arrive at the 90 percent tally isn't given. 

Hutson also says that policy is applied across the U.S., but not globally since the laws in different countries aren't the same. 

However, assistant managers are excluded from tips because they're "rewarded with performance-based bonuses and other benefits not available to their subordinates," says the company. 

Judge Laura Taylor Swain concluded that shift supervisors lack the broad managerial authority that would classify them as company "agents."

Judge Swain also said the law doesn't require any company to include all eligible comployees in the tip pool, but says there are still questions in New York state about the elgibility of Starbucks assistant managers.  

The Federal Appeals Court is looking for two answers from New York:

1) What factors determine whether an employee is an agent of the company?

2) Does state law permit an employer to exclude an otherwise eligible tip-earning employee from sharing in such a tip pool?

The answers will affect hospitality workers all over New York state, but primarily in New York City where there are more service industry workers than any other city in the country. 

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