CA Judge Awards Starbucks Servers $86M in Tip Pooling Case

March 21, 2008 ( - A California state judge who had already ruled that managers at popular coffee emporium Starbucks routinely raided the tip jars in its Golden State stores has now ordered the company to pay back its hourly workers $86 million plus interest.

A news account in The Recorder said the instructions had come from San Diego Superior Court Judge Patricia Cowett in a letter to the Seattle-based firm.

Cowett previously found that Starbucks had violated a California law that prohibits employers – or their “agents” – from dipping into tips meant for hourly workers, according to The Recorder. The Starbucks managers, Cowett ruled, were “agents” for the purposes of the statute.

Plaintiffs’ attorney David Lowe asked the judge to award restitution and interest to a statewide class of about 120,000 California coffee servers who had worked for the company since 2000, according to the news account.   Cowett pegged the average tip rate at $1.71 an hour and multiplied it by the 50,694,694 hours worked by shift supervisors.

Cowett told Starbucks in her letter that the coffee servers are also entitled to an injunction prohibiting the company from continuing the tip pooling practice.

Valerie O’Neil, Starbucks’ director of global communication, said Cowett’s ruling is “not only contrary to law, it is fundamentally unfair and beyond all common sense and reason.” She told The Recorder: “Starbucks believes that our shift supervisors deserve their fair share of the tips that they receive from the tip jars in our California stores.”