Starbucks Faces Class Action Suit Tied to Barista Tips

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Starbucks, founded in the early 70s in Seattle, Washington, is currently defending a class action suit that was filed nearly four years ago in San Diego County. The suit, Chou v. Starbucks, was initiated by Jou Chou, a former La Jolla and Hemet Starbucks barista who criticized the practice of "shift leads," managers, sharing in tips. The class is made up of California baristas, those who prepare the coffee, who have been employed with the company since 2000. Plaintiffs have requested monetary restitution in the range of $100 million.

In the initial phase of the trial, it was found that Starbucks could be liable for violating California labor laws which prohibit managers and/or supervisors from sharing tips with non-managers. At the time the class claimed breaches of Labor Code §351, as well as Business and Professions Code §17200. The former claim was eventually dropped in January of this year.

On behalf of the class, Laura Ho of Goldstein, Demchak, Baller, Borgen & Dardarian wrote that "the restitution remedy under the UCL provides the same (or greater) relief than the monetary damages available under Section 351." The second phase of the trial, which began on March 12, will determine how much will be awarded to the class.

In addition to monetary factors, 17200 claims have the added benefit of providing a longer statute of limitations. While 17200 has a four-year statute of limitations, 351's statute is only three years. Moreover, choosing to proceed with a 17200 claim ensured that the case would be presented before a judge, with no jury involvement.

This case has garnered significant attention, especially from employment attorneys who have been monitoring the outcome since it may impact other tip-pooling cases involving restaurants and casinos. Those cases are still pending. Employers have also been keeping an eye on the Starbucks case because they typically favor the tip-pooling practice, which is one way that companies can maintain or lower employee costs.

In response to the decision, Tara Darrow, a Starbucks spokesperson, said, "We disagree with the judge's ruling. We are also evaluating our options for appeal and will do so after the next judgment."

Since its initial filing in 2004, Starbucks has adamantly defended the case. After the preliminary decision the company appealed the ruling and asked that an appellate court throw out the case, reversing the previous court's ruling. The court subsequently rejected their appeal.

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