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ALBANY -- New York's top court ruled Wednesday that Starbucks' baristas must share the tip jar with shift supervisors, but not assistant managers.
The state Court of Appeals ruled that shift supervisors at Starbucks qualify for tips because their "personal service to patrons is a principal or regular part of his or her duties." New York law allows workers whose roles are considered similar to waiters to share in tips, the court noted.
In contrast, it said that assistant managers aren't eligible.
"We conclude that the line should be drawn at meaningful or significant authority or control over subordinates," Judge Victoria Graffeo wrote for the court.
The ruling essentially upheld Starbucks' policy. The court also upheld the company's policy of divvying up the tip-jar proceeds among eligible employees.
The Court of Appeals noted that both baristas and shift supervisors are part-time employees who work for hourly wages. Baristas can become shift supervisors after working at Starbucks for six months. Assistant managers are full-time workers who can earn quarterly bonuses and who enjoy more benefits.
Two Starbucks baristas who didn't want to share tips with supervisors had filed a federal class action lawsuit in Manhattan. The baristas claimed the company violated New York State labor laws by including shift supervisors in tip sharing. An assistant manager also sued, claiming he should be entitled to a share of the tips.
The U.S. District Court then asked New York's highest court to determine, under state labor laws, who should qualify for tip sharing. The case now returns to federal court, which must apply the New York standard in ruling on the class-action lawsuit.
A Starbucks attorney didn't immediately return calls for comment.
Shannon Liss-Riordan, a Boston-based attorney for the baristas, said she was "disappointed" by the court's decision."I believe the record shows that Starbucks shift supervisors do have meaningful authority over the day-to-day work environment and job performance of the baristas," Liss-Riordan said in an email.