Starbucks Ordered to Pay Back Tips
San Diego A Superior Court judge on Thursday ordered Starbucks Corp. to pay its California baristas more than $100 million in back tips and interest that the coffee chain paid to shift supervisors.
San Diego Superior Court Judge Patricia Cowett also issued an injunction that prevents Starbucks' shift supervisors from sharing in future tips, saying state law prohibits managers and supervisors from sharing in employee gratuities.
The judge ordered Starbucks to pay $87 million in back tips, plus interest of $19 million, bringing the total judgment to about $106 million.
Starbucks spokeswoman Valerie O'Neil said the company planned an immediate appeal of the ruling, calling it "fundamentally unfair and beyond all common sense and reason."
The lawsuit was filed in October 2004 by Jou Chou, a former Starbucks barista in La Jolla, who complained shift supervisors were sharing in employee tips.
The lawsuit gained ground in 2006 when it was granted class-action status, allowing the suit to go forward for as many as 100,000 former and current baristas in the coffee chain's California stores.
It was not immediately clear how many current and former employees are affected by the ruling. Starbucks employs more than 135,000 baristas in the United States.
The judgment comes as Starbucks is struggling to revive its U.S. business, where store traffic has slipped amid a sagging economy, rising energy and dairy costs, and growing competition from cheaper rivals.