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This report includes a summary of key changes, including the salary level test and salary basis test.

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March 21, 2008
Judge Orders Starbucks to Pay $100M to Baristas

A judge in San Diego has ordered Starbucks to pay $100 million to baristas who shared tips with shift supervisors in California, according to media reports.

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California Superior Court Judge Patricia Cowett said the company owed the baristas $100 million in back tips and interest, ruling the shift managers were ineligible to share tips that were placed in jars by customers of its California restaurants.

The company said it would appeal the ruling, claiming the ruling is "fundamentally unfair and beyond all common sense and reason." 

"We plan to vigorously appeal this ruling," the company said in a statement. "Starbucks believes that our shift supervisors deserve their fair share of the tips that they receive from the tip jars in our California stores.  We also disagree with the court's ruling to award damages under which the baristas will receive the tips that shift supervisors have earned in the past."

California law does allow involuntary tip pooling among those who directly provide the service for which tips are left. California Labor Code Section 351 prohibits employers and managers from sharing in or keeping any portion of a gratuity left for employees by a patron. The company argues that the shift supervisors are entitled to share in the tips because they do provide service like the baristas do.


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