Starbucks Shift Supervisors May Share in Tips

In Barenboim v. Starbucks, the Second Circuit (by Summary Order) yesterday held that Starbucks shift supervisors are not precluded by New York Labor Law § 196-d from sharing in tips.  The decision follows the New York Court of Appeals’ decision this summer that answered a certified question regarding the interpretation of that statute.

The New York Court of Appeals concluded that “under § 196-d, employer-mandated tip splitting should be limited to employees who, like waiters and busboys, are ordinarily engaged in personal customer service.” Thus, an employee having limited supervisory responsibilities may share in tips, as long as “personal service to patrons is a principal or regular part of [that employee’s] duties.”

Applying the New York Court of Appeals’ interpretation of § 196-d, the Second Circuit held that Starbucks shift supervisors may share in tips:

In this case, it is undisputed that Starbucks’s shift supervisors spend a majority of their time performing the same duties as baristas, and are primarily responsible for serving food and beverages to customers. As their title indicates, shift supervisors also have some supervisory responsibilities, such as assigning baristas to particular positions during their shifts, administering break periods, directing the flow of customers, and providing feedback to baristas about their performance. Further, shift supervisors are authorized to open and close stores, to change the cash register tills, and to deposit money in the bank. But the limited nature of these supervisory duties, considered together with the shift supervisors’ “principal” responsibilities to provide “personal service to patrons,” cannot admit a finding of the “meaningful or significant authority or control over subordinates” contemplated by § 196-d. Accordingly, we identify no genuine dispute of material fact as to whether § 196-d permits shift supervisors to participate in Starbucks’s tip pools. It does.

Plaintiff argued that shift supervisors discipline baristas, advise managers regarding the baristas’ job performance, and coordinate baristas’ schedules and breaks, and hence exercised “meaningful or significant authority over subordinates”.

The Second Circuit disagreed, noting that shift supervisors’ responsibilities are “limited” and that their “primary job junctions are the same as baristas.” Therefore, since “no factfinder could conclude that shift supervisors have such a ‘substantial’ degree of ‘managerial responsibility’ that they are no longer akin to ‘general wait staff’ under § 196-d”, the district court properly awarded summary judgment to Starbucks.

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