Monday, March 24, 2008

How Does Starbucks Ruling Affect Franchise Owners?

A San Diego Superior Court Judge Patricia Cowett ordered coffee chain Starbucks to pay more than 100 million dollars in tips and interest owed to staff in a ruling that stated that supervisors are precluded from sharing in tips from the tip pool intended for employees. According to this article, an attorney for Starbucks servers stated: "California law allows employees to pool tips, Lowe said, though supervisors, managers and owners -- anyone with the authority to oversee or direct other workers -- can't be paid out of the pool." The caution for franchise owners? According to this article, Connie Alexakos, vice president of marketing for the Hawaii-based company, the Bad Ass Coffee Co., states that "it's up to franchise owners to comply with employment laws of their states. She said she read the Starbucks ruling but wasn't clear whether it affected the way Bad Ass franchises need to operate."

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