Chau v. Starbucks Corp., 174 Cal. App. 4th 688 (2009)

Jou Chau, a former Starbucks “barista,” brought a class action against the company, challenging Starbucks’ policy of permitting shift supervisors to share in tips that customers place in a collective tip box. Chau alleged the policy violated California’s Unfair Competition Law based on a violation of Labor Code § 351. The trial court certified

Chau v. Starbucks Corp., 174 Cal. App. 4th 688 (2009)

Jou Chau, a former Starbucks “barista,” brought a class action against the company, challenging Starbucks’ policy of permitting shift supervisors to share in tips that customers place in a collective tip box. Chau alleged the policy violated California’s Unfair Competition Law based on a violation of Labor Code § 351. The trial court certified

The California Court of Appeal has issued an important decision that has significant implications for California employers that have tip-sharing arrangements for their employees. In Chau v. Starbucks Corp., 2009 WL 1522708 (Cal. Ct. App. Jun. 2, 2009), the court held that an employer can allow employees who have both supervisory and customer service duties to receive a portion of the tips that are left by patrons in collective tip-boxes. The court further held that customers who place tips in a collective tip-box (rather than giving the tip directly to a specific employee) intend their gratuity to bedistributed among all members of the team that provided customer service to them, including employees who may have some supervisory duties. As a result, the San Diego trial court’s judgment granting over $105 million in restitution to a class of more than 100,000 current and former Starbucks coffee baristas has been overturned.