Legal Blog

The Coffee Showdown: Baristas’ Lawsuit Demonstrates Sensitivity Around Taxing Employees’ Tips

Starbucks, one of the nation’s top coffee retailers, is currently being sued by several baristas for allegedly improperly withholding pooled tips. Baristas, who are responsible for preparing customers’ drinks, regularly receive tips that they “pool” or split among those working on a shift. Starbucks elected to tax the tips.

The related lawsuit, initiated by the baristas, was filed in 2012 and is still going strong today. Most recently, the Oregon Supreme Court refused Starbucks’ request to dismiss the case. While Oregon and federal law allow employers to tax certain tips, they are clearly delineated and do not always apply to pooled tips.

This multi-year litigation (seeking eight figures in damages and injunctive relief) demonstrates how employers of all sizes need to take caution when subjecting employees’ wages and tips to withholding. Failure to do so can result in extensive litigation and a potentially costly payout.


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Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.






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