Real-Time Updates

Business in Action, 4th Edition
with Real-Time Updates
by Bovèe and Thill

Chapter 14

Subscribe to Real-Time Updates via RSS

Starbucks Corp. plans to appeal a San Diego Superior Court ruling last week that ordered the coffee chain to compensate California baristas for tips they shared with shift supervisors.

"The ruling would take away the right of shift supervisors to receive the tips they earn for providing superior customer service," said Chief Executive Howard Schultz, in a voicemail message to employees Wednesday night. "I want you to know that we strongly believe that this ruling is extremely unfair and beyond reason."

Directory of sites for human resources professionals and students.

Sometimes it pays to start a fight with the big guys. For some former Starbucks baristas that pay is going to total over $100 million.

Judge Patricia Y. Cowett of the Superior Court of the State of California ruled in a class action suit Thursday that the Starbucks Corp. must 120,000 of its current and former baristas the sum of $86.7 million, plus awards interest of 7%, for tip pool money that the coffee retailer used to compensate shift supervisors.

Starbucks’ domination hinges on how it treats its employees, who, as in all restaurants, are the real face to customers. For example: Health benefits are available to any Starbucks employee who works at least 20 hours a week and has been with the company for more than 90 days.

Starbucks’ chief barista Howard Schultz has been committed to healthcare coverage for his employees, but his generosity may be brewing up trouble for the coffee seller.

The company’s chairman told U.S. legislators yesterday that it will spend more on employee health insurance this year than on raw materials to brew its coffee.

If you’ve ever griped about your 20-something co-worker who is always attached to her iPod or the 30-something who never seems to be working at his desk, you’re probably a baby boomer–and those same workers are probably griping about your penchant for face-to-face meetings.

Daniel Gross looks a lot like your average Starbucks (SBUX) barista. The 28-year-old is slim and clean-shaven, dressed in tan cargo pants and a T-shirt.

But Gross would rather talk about worker solidarity than lattes and soy milk these days. A volunteer organizer for the Industrial Workers of the World (IWW), Gross claims his involvement with the union got him fired from a New York City Starbucks a year ago. Now he’s preparing to go before a judge on Aug. 6 to make the case for himself and other baristas he says have been fired or intimidated for union activity. Seated in the one-room headquarters of the IWW’s local in Queens (N.Y.), Gross says it’s all part of a broader battle to change the way American companies treat their employees.