Coffee Company Sued Over “Tip-Sharing” Policy

This case involves employees of a major coffee chain. The company employed four types of workers at its coffee stores: baristas, shift supervisors, assistant store managers, and store managers. Each coffee store had a plexiglass box at the counter where customers could leave tips. The company’s policy was that these tips were to be pooled and distributed among the baristas and shift supervisors. The company did not permit its store managers or assistant store managers to receive any share of a tip pool. Several baristas sued the company claiming that shift supervisors are not allowed to receive distributions from the stores’ tip pools because the shift supervisor are “agents” of the coffee company who, under the state’s Labor Law, cannot accept any part of the gratuities received by an employee, or keep any part of a gratuity for an employee.

Question(s) For Expert Witness

1. Can a shift supervisor at a coffee company participate in a tip-sharing policy along with baristas?

Expert Witness Response

The job of a barista at a coffee company is to provide food and beverages for customers. Many baristas work on a part-time, hourly basis. Shift supervisors at coffee companies are also required to serve food and beverages to customers and they may also work on a part-time, hourly basis. Shift supervisors also have some supervisory responsibilities. The tip-sharing policy that is in effect at some major coffee companies usually provides that tips are tallied each week and then distributed in cash to baristas and shift supervisors in proportion to the number of hours each employee worked. Several states have labor laws that prohibit an employer or their agent from accepting or retaining any part of gratuities received by an employee. These laws usually do not prohibit tip-sharing by a waiter with a busboy or a similar employee. The shift supervisors in this case are probably allowed to participate in the company’s tip-sharing policy because usually shift supervisors exercise only a limited degree of supervisory responsibility and are tip-sharing eligible under the Department of Labor guidelines for most states. This means that since shift supervisors at coffee companies do not have the degree of managerial responsibility of an “agent” of the company, they are considered general wait staff under state labor laws that can participate in tip-sharing policies along with baristas.