Starbucks connoisseurs appreciate the difference between a Venti Half-Caf Americano and a Single Grande White Chocolate Mocha. But, when they drop change in the tip box before walking away with their morning caffeine fix, do they appreciate the differences between a barista and a shift supervisor? How about between a shift supervisor and an assistant store manager (“ASM”)? How about between an ASM and a store manager? Starbucks customers may not know these differences, but they are the key to resolving questions that the U.S. Court of Appeals for the Second Circuit has just certified to the highest New York state court in two cases brought against Starbucks. One of the cases was brought by baristas; the other by ASMs.
The Second Circuit heard the cases in tandem because they raise the issue of whether shift supervisors or ASMs are “agents” of Starbucks for purposes of New York Labor § 196-d. That law limits what employers can do with shared tip pools and provides:
No employer or his agent . . . shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee. . . . Nothing in this subdivision shall be construed as affecting the . . . sharing of tips by a waiter with a busboy or similar employee.
An “agent” is defined elsewhere in the New York law as a “supervisor,” but supervisor is not defined. (You may recall that we reported on a similar issue in a case brought by baristas against Starbucks under the Massachusetts Tip Act, which is currently on appeal to the U.S. Court of Appeals for the First Circuit.)
In the baristas’ case, Starbucks contends that, for purposes of the New York law, shift supervisors – who are one step up the store hierarchy closer to store managers than baristas – are not Starbucks’ agents, and can therefore share in the tip pool with baristas. The baristas contend the opposite: that shift supervisors – who give assignments and feedback to baristas – are Starbucks’ agents and, as a result, tips should be divided exclusively among baristas.
Meanwhile, in the ASMs’ case, Starbucks contends that ASMs, whose supervisory responsibilities are greater than shift supervisors but less than store managers, are Starbucks’ agents and that they are therefore not eligible to share in the tip pool. Starbucks also claims that, even if the ASMs are not agents, New York law does not require Starbucks to include the ASMs in the pool. The ASMs contend the opposite – that they are not agents, and that Starbucks therefore is compelled to include them in the pool.
In other words, just as the connoisseur likes her first cup of the day with sugar free vanilla, Starbucks likes its store hierarchy and tip distribution practices the way it likes them. If the New York Court of Appeals rejects Starbucks’ practices, then that could mean that Starbucks owes millions of dollars in back pay to baristas and/or ASMs. We’ll be on the alert like a coffee addict to see what the New York Court of Appeals has to say.