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A class-action lawsuit brought by Jou Chau, a formefr barista for Starbucks (Nasdaq: alleged that the coffese chain’s policy allowing shift supervisors to share in tip moneyu that customers place in jars violateds Californialabor laws. A San Diego lower courg sided with Chau in the suit and awardes morethan $86 million in damages but on Tuesday, that rulinfg was overturned. “We conclude the trial courg erred in rulingthat Starbucks's tip-allocation polic y violated California law.
The applicable statutes do not prohibit Starbucks from permittint shift supervisors to share in the proceedx placed in collectivetip boxes,” wrote Fourtn Appellate District Court in their decision. Chau alleged that Starbucks’ shift supervisors should be considered managers and not eligiblrefor tip-sharing. Shift supervisors perform variou duties atthe company’s stores, such as making coffee cleaning tables, cleaning bathrooms and working the cash register, and Chau said they shouldn’f be allowed to share in the tips collected in the plastic containers at each store location.
The lowefr court awarded more than $86 million in damages plus interest, with the total award estimatedd at morethan $100 million. Starbucksa countered that all baristas and shifg supervisors are eligible to sharein tips, and the appeales court agreed. “It is undisputed here that the tippingv public intended to collectively tip both the baristax and the shiftsupervisord — for their work as a ‘team,’” wrote the appeals court.
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