Chau

Jon Chau, a former Starbucks “barista,” brought a class action against Starbucks Corporation (Starbucks) challenging Starbucks’s policy permitting certain service employees, known as shift supervisors, to share in tips that customers place in a collective tip box. Chau alleged the policy violates the unfair competition law (UCL) (Bus. & Prof. Code, § 17200) based on a violation of Labor Code section 351. After certifying a class of current and former baristas and conducting a bench trial, the trial court found Chau proved the UCL claim, and awarded the class $86 million in restitution.

Starbucks appeals. We conclude the trial court erred in ruling that Starbucks’s tip-allocation policy violated California law. The applicable statutes do not prohibit Starbucks from permitting shift supervisors to share in the proceeds placed in collective tip boxes. The court’s ruling was improperly based on a line of decisions that concerns an employer’s authority to mandate that a tip given to an individual service employee must be shared with other employees. The policy challenged here presents the flip side of this mandatory tip-pooling practice. It concerns an employer’s authority to…