A Tip or Two for Starbucks

Once again, we have questions about a tip jar.

This time, the dispute takes place at a coffeehouse. And not just any coffeehouse, which explains the coast-to-coast hand-wringing by managers who should know better.

A California judge has ordered Starbucks to pay more than $100 million to its low-wage coffee servers, called "baristas," after ruling that the company violated state law in allowing supervisors to share in the tip pool. The decision applies only to California but could influence tip jar policies across the country.

Not every state, by the way, has a law forbidding managers and supervisors from taking a cut of the tips. It may be wrong, but in many states, it's legal.

Starbucks called the decision "fundamentally unfair and beyond all common sense and reason." Interestingly, many Starbucks employees — including baristas — agree, which is why this is more complicated than the typical management tip-skimming maneuver. Baristas insisted to journalists, including me, that their supervisors often brew coffee and wait on customers just like they do.

"I can't hire or fire anybody," one supervisor in the Cleveland area told me. "The only difference between me and a barista is that I count the money and I have keys." Supervisors also reportedly make $1 to $2 more an hour. I don't know for sure because no one at Starbucks' corporate headquarters would talk to me.

Instead, spokeswoman Bridget Baker suggested, via e-mail, that I visit the company's Web site to read the press release announcing its intention to appeal and CEO Howard Schultz's statement to employees. (Schultz and I are not related.)

In his March 21 letter, Schultz mentioned the company's health care coverage for part-timers and its employee stock option program as examples of the company's "appreciation." Then he assured his "partners" — which is what they call employees in Starbucks land — that baristas and shift supervisors would continue to divide tips from the jar at the end of each week.

What was missing in Schultz's response was any acknowledgement of his unwritten contract with customers.

Wherever there is a tip jar, there is an assumption about who gets the gratuity.

I was retrieving my coat at the end of an evening, when I noticed the large glass jar brimming with money, mostly bills. I pointed to the jar and said to the weary clerk, "Well, at least you get a decent amount of tips for standing here."

She shook her head and said she didn't keep a cent.

"Management keeps the tips," she said.

The general manager assured me that no one cared who kept the tips. Thousands of readers assured him otherwise. It was one of those stories that generated outrage for weeks, but it only took a few hours before that manager decided to announce on a local radio show that he had changed the policy. Effective immediately.

Readers still call whenever they find out workers are being denied their rightful share of a tip jar. Usually, all I have to do is call the manager, and the policy changes. Managers know it's wrong to pocket tips meant for their workers, but they also know most customers never suspect they would do such a thing.

Starbucks was the first major U.S. company to offer health care coverage to some part-timers. It also offers tuition reimbursements and a 401(k) program. That's a high standard I wish more companies would meet.

But Starbucks has its problems with workers, too. Earlier this month, the company agreed to pay an undisclosed benefit to about 350 managers in Texas who claimed they were forced to work off the clock.

And now there's this business with the tip jars.

Starbucks supervisors work hard, and they should be paid for their efforts. The company should stop relying on customers' generosity to compensate them adequately.

And we always should remember to ask the clerk behind any counter:

Who keeps the tips?

Connie Schultz is a Pulitzer Prize-winning columnist for The Plain Dealer in Cleveland and the author of two books from Random House: "Life Happens" and "… and His Lovely Wife." To find out more about Connie Schultz (cschultz@plaind.com) and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

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