More Bad News for Starbucks

In the midst of sliding stock prices, Starbucks has been ordered by a court in California to pay over $100 million in back tips and interests according to this report at CNN.com. Apparently, the company was requiring that tips for baristas be shared with shift supervisors, which violated California state law that prohibits managers and supervisors from sharing in employee gratuities. Filed by one barista, the case gained momentum when it was certified as a class action, comprised of as many as 100,000 former and current baristas in California's stores.

Not surprisingly, Starbucks is appealing and has asked for a stay pending the appeal. It has critiqued the brevity of the judge's opinion, which is apparently only four paragraphs long, noting that the judge failed to consider unfairness to shift supervisors. I'm inclined to agree with the named plaintiff on this one:

"I feel vindicated," [the named plaintiff] said in a written statement released by attorneys. "Tips really help those receiving the lowest wages. I think Starbucks should pay shift supervisors higher wages instead of taking money from the tip pool."

MM