Report: Court reverses $100M Starbucks barista award

Los Angeles Just over a year after winning a class-action suit that rewarded Starbucks baristas with tips lost through the company’s violation of state labor laws, a California appeals court on Tuesday reversed the decision in favor of the coffee giant, according to an article on CNBC.com.

The class-action suit, which was filed on behalf of approximately 120,000 current and former baristas, the associates who take orders and create the coffee-based concoctions, blamed Starbucks for allowing supervisors to share the tips earned by the hourly employees. Lawyers representing the class said the company used the tips to subsidize labor costs for shift supervisors vs. paying them higher wages, the article said.

In February 2008, a San Diego County court awarded the baristas $100 million, saying that Starbucks’ practice violated California’s Unfair Competition Law. It also demanded that Starbucks immediately stop the tip-pooling policy.

Ruling that the original case was wrongly judged, the Fourth District Court of Appeal repealed the decision, saying that the managers are also serving customers, thus earning the tips as well.

Unhappy with the new decision, the class’ lawyer will bring the case to the California Supreme Court “to correct the Court of Appeal’s legal mistake,” the plaintiff’s attorney, David Lowe, said in the article.