Friday, March 21, 2008

Trouble Brewing As Starbucks Looses Court Case

I once wanted to open a coffee house. Years ago. My wife will tell you I came up with the idea of chain store coffee houses way back before there ever was a Starbucks. The essential thing missing was capital. After taking some classes I also found out that that romantic idea of a chain of quaint bohemian coffee houses was unreal because according to California state law. basically I was opening up a restaurant and had to follow all the stringent guide lines that pertain to a restaurant. Yesterday in court Starbucks Corporation found out the same thing; as for the second time they had a class action law suit filed against them, and in this one they got slapped with a judgement of 105 million dollars. This mega lawsuit is all over one thing... those silly tip jars at the cash register.


The tip jars that Burger King and McDonald's don't have even though their employees do more work. It seems a court in California awarded baristas at Starbucks cafes in California $105 million on Thursday, ruling that the company had wrongly allowed supervisors to share in tips.

The judgment by Judge Patricia Y. Cowett of California Superior Court in San Diego could have broader ramifications for the restaurant industry in California and around the country.

Starbucks, the Seattle-based coffee chain, said it would appeal the decision, which it described as “fundamentally unfair and beyond all common sense and reason.”

The case centers on the division of labor between managers and rank-and-file workers. Under California labor law and rules, tips can be pooled and shared among workers but restaurant owners or their “agents,” which are typically construed to mean managers and supervisors, cannot share in the money.

VIKAS BAJAJ at The New York Times has the rest of this story