• California Law Does Not Prohibit Shift Supervisors' Sharing of Tips
  • July 9, 2009
  • Law Firm: Hinshaw & Culbertson LLP - Los Angeles Office
  • A class of 10,000 baristas filed suit against their employer, a coffee giant, claiming that it violated California law by distributing parts of the tips collected in tip jars at California locations to shift supervisors. The employees alleged that the California Labor Code prohibits tip pooling with managerial employees. A California trial court certified the class and entered judgment in favor of the employees totaling $86 million. The employer appealed, and a California Court of Appeals reversed the decision, finding that the statute does not prohibit the sharing of proceeds in collective tip boxes with shift supervisors. The Court noted that prior cases on-point deal only with the sharing of tips given to an individual service employee, and that this case presented a different issue; that is, whether an employer can require the equitable allocation of tips which are placed in a collective tip box for all of those employees who provide service to the customer. The Court found no authority that prohibits this type of tip pooling, and specifically commented that the Labor Code does not prohibit a shift supervisor from keeping gratuities given for customer services. California employers should take note of this decision.

    Chau v. Starbucks Corp., D053491 (Cal. App. Ct. June 2, 2009)