Baristas and managers at Starbucks were the subject of a case before the New York state Court of Appeals, the state's highest court, according to FOX News. The case is about a tip-jar dispute that could affect hospitality workers as well as Starbuck's employees, regarding who can take money from the tip jar.
The Court of Appeals has been asked to interpret the New York labor law to determine the definition of an employer's "agent," who is prohibited from sharing tips. This is in connection with two lawsuits that have been filed against Starbucks that allow baristas and shift supervisors, but specifically not assistant managers, to take money from the tip jar.
The federal court is addressing the issues of what factors determine whether an employee is an agent of the company and whether state law permits an employee to exclude an otherwise eligible tip-earning employee from sharing in a tip pool.
Baristas are paid an hourly wage and share tips weekly based on hours worked. Assistant managers are salaried employees. There are also shift supervisors who are paid an hourly wage yet also have limited management responsibilities and are currently receiving money from the tip jar.
According to Shannon Liss-Riordan, who is the attorney representing the baristas, the shift supervisors should also be excluded from the tip jar because they make the work assignments and have authority over the baristas, making them qualify as company agents. Supervisors also coordinate breaks and receive higher wages.
The other side of the argument, made by Adam Klein, the attorney representing the assistant managers, is that most of their time is spent serving customers, so they deserve a share of the tips. Since they lack the authority to hire or fire staff, they should not be considered company agents.
"Why, if they're eligible, do you have the authority to say they can't get it?" Chief Judge Jonathan Lippman asked about the assistant managers receiving tips. "You can't take that tip money.
"You're kind of the trustee of that tip money," the judge added. "Why should you have that authority?"
According to Rex Heinke, the practical issue is that someone has to decide the tip money allocation. Nothing in the statute gives the labor department that power, so it's left to the employer.
Starbucks is based in Seattle and has almost 18,000 retail stores in 60 countries. There are 413 company-owned stores in New York as of the last fiscal year.
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