A federal appeals court ruled today Starbucks owes Massachusetts baristas more than $14 million for tips that were shared with supervisors between 2005 and 2011, because state law bars managers from dipping into the tip jar.
Starbucks tried to pour cold water on a class-action suit on behalf of more than 11,000 former and current baristas by arguing that "shift supervisors" weren't really managers because they mostly did the same work as baristas and so were entitled to the perk of sharing in pooled tips collected from customers.
But in a scalding decision, the US Court of Appeals for the First Circuit in Boston told Starbucks that the Massachusetts tip law is about as explicit as can be that managers are not allowed to share in tips and that shift supervisors are, indeed, managers:
The Tips Act states unequivocally that only employees who possess "no managerial responsibility" may qualify as "wait staff." Mass. Gen. Laws ch. 149, § 152A(a) . "[N]o" means "no," and we interpret that easily understood word in its ordinary sense: "not any." Merriam- Webster's Collegiate Dictionary 839 (11th ed. 2003); The American Heritage Dictionary of the English Language 1192 (4th ed. 2000); The Random House Dictionary of the English Language 1303 (2d ed. 1987). ...
Unless we are prepared to ignore both the legislature's use of the word "no" and the commonly accepted meaning of that word — and we are not — it follows that if an employee has any managerial responsibility, she does not qualify as "wait staff" eligible to participate in tips pools under the provisions of the Tips Act.
The court also rejected Starbucks' argument that the money left by customers to express satisfaction with service did not constitute tips. That's just a latte nonsense, the court said.
The court did hand Starbucks a small victory: It ruled the workers were only entitled to triple damages for tips after 2008 - when the state tip law was amended to require trebling of damages. Previously, plaintiffs had to prove "outrageous" behavior warranted that:
We do not read the Massachusetts cases as requiring treble damages under the earlier version of the Wage Act whenever some hint of outrageousness exists. Outrageousness is often a matter of degree. Most people would think that bilking a widow out of her life's savings is outrageous; some would think that charging $5.25 for a salted caramel mocha frappuccino is outrageous. But everyone would agree that the two acts are qualitatively different, and are not deserving of the same level of opprobrium.