How do you feel about tipping?  Do you tip all service people?  Do you feel like tipping has gotten out of hand?  Should you tip the valet before he takes your car, hoping he’ll drive it carefully?  How much should you tip? Delivery men – pizza, flowers, etc.?  Movers? Doormen? The guy who mows your lawn? What about when you pick up your own take-out, and there is a tip jar next to the register?  The kid who helps load your groceries into the car, when you didn’t ask for help?  Do you always tip 20% to wait staff in a restaurant?  Do you feel guilty if you don’t put a tip in a tip jar?

I will confess that I feel guilty if I don’t tip.  Also, I like to give my tip directly to the person who provided me with service.  But, I do use a tip jar if there is one.  I usually gauge my tip according to the job, and how well it is done.

HAVE YOU EVER WONDERED ABOUT POOLED TIPS?  WHO GETS THEM?  A LITTLE ASIDE…

Maybe you have seen the season finale episode of “Kitchen Nightmares” with Chef Gordon Ramsay on May 10.  The owners of a Scottsdale, Arizona eatery used to take their server’s tips for themselves.  That is beyond bad behavior.  I wondered why the wait staff didn’t go find jobs elsewhere.  It seems they won’t have to worry about it, because the owner, Salomon Bouzaglo, might get deported.[i]

STARBUCKS STORE STAFF

The only full-time employees at a Starbuck’s store are the manager and the assistant manager.

Starbucks Logo

At every Starbucks store, there is a tip jar near the register.  The employees working the register serve customers from the bakery case, get their coffee, take orders, and collect payment.  These employees are called shift supervisors, and they have some managerial duties.  However, they are part-time employees that are paid an hourly rate.

The baristas are responsible for serving food and coffee drinks.  They are part-time employees that are paid an hourly rate.

THE STARBUCKS TIP JAR

When the jar at the register gets full, Starbucks requires that it is emptied into a bag, and placed in the store safe.  At the end of each week, the tips are distributed in cash to the shift supervisors and the baristas, in proportion to the number of hours each employee worked.

Jeana Barenboim, Jose Ortiz, and other baristas filed a lawsuit against Starbucks Corp., claiming that the shift supervisors are not eligible to receive a share of the tips, under New York Labor Law, Section 196-d; which states that an agent of a company may not “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.”  Their claim was that shift supervisors are agents of Starbucks, since they have some managerial duties.

Interestingly, this is not the only case against Starbucks regarding the tip jar.  In another case; Winans v. Starbucks Corp., assistant managers claimed that they should receive tips from the tip pool.  Their claim is that they serve customers and they wear the same uniform as the shift supervisors and baristas, making them indistinguishable from other employees.

THE U.S. COURT OF APPEALS, 2^ND CIRCUIT (OCTOBER, 2012)

Both cases were heard by N.Y. District courts, in which Starbucks was granted summary judgment and the plaintiff’s claims were dismissed.  The two cases were consolidated on appeal, and both cases made it to the U.S. Court of Appeals, 2^nd Circuit in October, 2012.

The U.S. Court of Appeals, 2^nd Circuit, deferred the cases back to the N.Y. Court of Appeals, with a few questions.  The two key issues were:  What criteria should be used to determine whether certain employees are “agents” of their employer, and whether employees who are not barred from receiving tips under 196-d may still be excluded from tip pools.[ii]  The U.S. Court of Appeals, 2^nd Circuit retained jurisdiction and reserved their decision.

THE NEW YORK COURT OF APPEALS (MAY, 2013)

This Tuesday, May 28, the New York Court of Appeals heard arguments from the lawyers for all three parties, Barenboim, Winans and Starbucks, as well as, the New York State Labor Department.

Rex Heinke, the lawyer for Starbucks, argued that the company’s policy is to exclude people who have power over other employees.  He further stated that shift supervisors do not have power over other employees, and they are entitled to tip sharing; however, the assistant managers do have power over employees and they should be barred from receiving tips.[iii]

Steven Wu, representing the Labor Department, said that employees can participate in pooled tips if customer service is a “principal and regular” part of their work.[iv]

The cases are Barenboim v. Starbucks Corp. and Winans v. Starbucks Corp., New York State Court of Appeals No. 122.  Argued, but no decision.