First Circuit Rules that Starbucks Owes $14 million to Massachusetts Baristas

Many cafes – including Starbucks – have tips jars near the registers. Pleased customers typically tip thinking that their tips are going to the barista that just served them. Many customers would be surprised to find out that sometimes managers and supervisors share in the proceeds of the tip jar.

In Massachusetts from 2005 to 2011, the proceeds of Starbucks tip jars were shared between baristas as well as shift managers. The problem was that a Massachusetts statute – the Tip Act – bars managers from taking tips from the tip jar. Starbucks employees became upset at having to share tips with shift supervisors, prompting them to bring a class action lawsuit against Starbucks in 2008. The Boston Globe reports that over 11,000 former and current baristas sued Starbucks for violating the Tip Act. The baristas argued that Starbucks violated Massachusetts law by allowing non-waitstaff employees to dip into the tip jar. Starbucks countered that shift supervisors were not really managers because their job function was very similar to baristas.

The federal district court sided with the baristas, and ordered Starbucks to pay more than $14 million for the lost tips. Starbucks timely appealed the decision to the First Circuit. On appeal, the First Circuit sided again with the baristas, and ruled that a Starbucks shift manager is a manager for the purpose of the Massachusetts tip law:

The Tips Act states unequivocally that only employees who possess “no managerial responsibility” may qualify as “wait staff.” Mass. Gen. Laws ch. 149, § 152A(a). “[N]o” means “no,” and we interpret that easily understood word in its ordinary sense: “not any.” Merriam- Webster’s Collegiate Dictionary 839 (11th ed. 2003); The American Heritage Dictionary of the English Language 1192 (4th ed. 2000); The Random House Dictionary of the English Language 1303 (2d ed. 1987). …

 Unless we are prepared to ignore both the legislature’s use of the word “no” and the commonly accepted meaning of that word — and we are not — it follows that if an employee has any managerial responsibility, she does not qualify as “wait staff” eligible to participate in tips pools under the provisions of the Tips Act.

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