A Win For Starbucks In Second Circuit Tip-Sharing Class Action

On November 21, 2013, the Second Circuit affirmed a Southern District of New York decision granting summary judgment to Starbucks in a class action that alleged shift supervisors had inappropriately participated in tip-sharing with baristas.

The class action alleged that Starbucks had violated New York Labor Law § 196-d, which provides that "no employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities received by an employee or retain any part of a gratuity or of any charge purported to be a gratuity for an employee."  The Second Circuit certified two questions to the New York Court of Appeals seeking assistance in interpreting the law at issue.  The Court of Appeals rejected the plaintiffs' argument that § 196-d bars any employee with even the slightest degree of supervisory responsibility from sharing tips.  Rather, the court concluded, "the line should be drawn at