Starbucks Tips Lawsuit Dismissed by NY Court - Free Enterprise
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Starbucks Tips Lawsuit Dismissed by NY Court

The Starbucks tips lawsuit, filed by five former assistant store managers from New York City and Long Island, has met its end. The court found in favor of the coffee chain, with Starbucks winning a dismissal of the lawsuit.

The assistant managers had alleged that Starbucks corporate had coerced them into sharing tips, reports Reuters.

They also alleged that Starbucks was in violation of New York's state labor laws, since they performed similar duties as baristas and other workers who were given tips, Reuters reports.

In its opinion, the court thought otherwise, finding that Starbucks had not violated state labor laws. In the opinion, U.S. District Judge Laura Taylor Swain said that the "plain language" of the labor law does not grant the assistant managers the right to share in tip pools, reports Reuters.

Starbucks policy lets baristas and shift supervisors manage the tip box. Starbucks typically places clear plastic tip boxes next to cashiers. Baristas and shift supervisors are typically hourly workers. Assistant managers and managers are usually salaried positions with additional benefits like sick pay, vacation days, and health benefits, reports Reuters.

What does this decision mean for small businesses? It may not mean that much, unless the business is operating in New York. Most wage and hour laws, including laws that govern tips, are based on state law and thus can vary widely depending on the jurisdiction.

And, part of the reason why the plaintiffs failed in this case is because the judge believed that they did not demonstrate that they had a right to the tips, according to Reuters. If employees in your business are able to prove that they are entitled to tips, they may prevail in a lawsuit against you if you decide to skimp on doling out tips.

The Starbucks tips lawsuit is no means an end to all tip and wage-and-hour litigation out there. There is also no reason to think that every business will be able to prevail like Starbucks with a dismissal of the lawsuit.

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