Wednesday, March 12, 2008

Tipping is not a city in China

Trouble in Brewland leaves many jittery. Why should the managers get a "cut" from the barista tips?

Why the very thought of it leaves me foaming and frothy at my mouth. It gives me a venti-sized headache.

Better to settle this case sooner than latte.

Big Trouble May Be Brewing for Starbucks Over Barista Tips
Matthew Hirsch: The Recorder

And you thought a Starbucks latte was expensive.

Plaintiffs in a case against the Seattle-based coffee company are seeking in the neighborhood of $100 million for baristas who say they were forced to share tips with some managers in California stores.

In a second trial phase scheduled to begin today, San Francisco attorney David Lowe will ask a San Diego Superior Court judge to award restitution and interest to a statewide class of about 120,000 baristas, or coffee servers, employed by the chain's California branches since 2000. The Rudy, Exelrod & Zieff partner said he couldn't be more precise about the dollar amount because plaintiff experts have not yet testified.

"It seems like an awful lot of money for any case, but especially a tip pooling case," said Matthew Righetti, a San Francisco lawyer representing plaintiffs in wage-and-hour litigation. Righetti isn't involved in the case.

Lowe said the first phase of trial concluded with a finding that Starbucks could be liable for distributing tips to shift supervisors. The second phase of trial, before San Diego Superior Court Judge Patricia Cowett, will determine how much the company will have to pay in restitution.
Daniel Nash, a Washington, D.C., partner at Akin Gump Strauss Hauer & Feld who represents Starbucks, declined to comment publicly before the trial concludes.

Initially, plaintiffs in Chou v. Starbucks had alleged violations of Labor Code §351, which prohibits an "employer or agent" from collecting part of any gratuity left for an employee, and Business and Professions Code §17200, California's widely cited unfair competition law. But in January the plaintiffs voluntarily dismissed their Labor Code claim.

In the plaintiffs' court papers, Goldstein, Demchak, Baller, Borgen & Dardarian's Laura Ho wrote that "the restitution remedy under the UCL provides the same (or greater) relief than the monetary damages available under Section 351."

One advantage plaintiffs sometimes get from the unfair competition law is its statute of limitations.

Seyfarth Shaw's Robert Tollen, who is not involved in the Starbucks litigation, said 17200 offers a four-year statute of limitations, while some Labor Code claims stop at three.

"So the basic motivation [might be] to get that additional year going backwards," he said.
Going to trial on §17200 claims alone ensures the case will be tried before a judge and not a jury, said Righetti. Sometimes, "it's just simpler to try a case before the court."