SAN DIEGO (AP) - A Superior Court judge on Thursday ordered Starbucks to pay
its California baristas more than $100 million in back tips that the coffee
chain paid to shift supervisors.
Saying baristas were entitled to $86 million in back tips plus interest, San
Diego Superior Court Judge Patricia Cowett also issued an injunction preventing
Starbucks' shift supervisors from sharing in future tips.
Cowett said the practice was a violation of a state law prohibiting managers
and supervisors from sharing in employee tips.
Starbucks Corp. spokeswoman Valerie O'Neil said the company planned an
immediate appeal, calling the ruling "fundamentally unfair and beyond all common
sense and reason."
The lawsuit was filed in October 2004 by Jou Chou, a former Starbucks
barista in La Jolla, who complained shift supervisors were sharing in employee
tips.
The lawsuit gained ground in 2006 when it was granted class action status,
allowing for the suit to go forward for as many as 100,000 former and current
baristas in Starbucks's California stores.
"I feel vindicated," Chou said in a written statement released by attorneys.
"Tips really help those receiving the lowest wages. I think Starbucks should pay
shift supervisors higher wages instead of taking money from the tip pool."
California is Starbucks' largest U.S. market, with 2,460 stores as of Jan.
8, the latest count available. The company has more than 11,000 stores
nationwide.
Starbucks earned more than $672 million on revenue of $9.4 billion during
its fiscal 2007, which ended Sept. 30.
The coffee company also took issue with the brevity of Cowett's ruling,
which was only four paragraphs, saying the judge failed to address the
unfairness to shift supervisors.
"This case was filed by a single former barista and, despite Starbucks
request, the interests of the shift supervisors were not represented in
litigation," O'Neil said.
Terry Chapko, an attorney for the baristas, said the ruling was a victory,
but the case was far from over.
"Starbucks should be paying their shift supervisors a supervisory wage, not
compensating them through tips that legally belong to baristas," he said.
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Associated Press Business Writer Elizabeth M. Gillespie in Seattle
contributed to this report.
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