California Court of Appeal Overturns $105 Million Award to Employee in Starbucks Tip Pooling Case

California Employment Law Update

On June 2, 2009, the California Court of Appeal, Fourth Appellate District issued its opinion in Chau v. Starbucks Corporation. Reversing the Superior Court of San Diego County’s decision, the court held that Starbucks did not violate Labor Code section 351 by permitting shift supervisors to share in tips placed by customers in a collective tip box. Employers are allowed to equitably distribute collective tips among all employees who provide the service that the tip rewards, even when an “agent” of the employer is part of the service team.