NEW YORK, N.Y. - Starbucks baristas must share their tips with shift supervisors who do much of the same work, a federal appeals court said Thursday.
The 2nd U.S. Circuit Court of Appeals based its findings in part on a June ruling by New York State's highest court that excluded assistant managers from receiving a share of the tips.
Citing the findings by the New York Court of Appeals, the three-judge panel of the 2nd Circuit noted that it was undisputed that Starbucks' shift supervisors spend a majority of time performing the same duties as baristas: serving food and beverages to customers.
Shift supervisors assign baristas to particular duties during their shifts, administer break periods and provide feedback to baristas about their performance. They also can open and close stores, change cash register tills and deposit money in the bank.
But the appeals court said those were limited supervisory duties and do not include hiring and firing employees.
"Thus, while shift supervisors may be able to coach baristas, they cannot formally discipline them," the panel said. "On this record, no fact finder could conclude that shift supervisors have such a 'substantial' degree of 'managerial responsibility' that they are no longer akin to 'general wait staff.'"
Attorney Shannon Liss-Riordan, representing the baristas, called the ruling "unfortunate" and said it lets employers subsidize the pay of its supervisors with money that should be going to their lowest-wage workers.
Lawyers for Starbucks did not immediately respond to a request for comment on the ruling.
It was unclear how the decision would affect other businesses in New York, where hospitality groups have said 42,000 businesses could be affected statewide.
Starbucks baristas are part-time employees who serve customers and share tips weekly based on hours worked. Shift supervisors are also part-time workers. Assistant managers work full-time with some benefits such as paid holidays and vacations and are eligible for bonuses.