Litigating California Wage & Hour and Labor Code Class Actions

management can mandate that tips be shared with any employee who “contributes” to a
patron’s service, which arguably could include cooks and kitchen staff as well as
bartenders. 166 Accordingly, it appears that tip-pooling cases may have been extinguished
except in the unusual circumstance where an employer forces employees to share tips with
their managers.
B. Actions Alleging “Agents” of Management Wrongfully Took Tips
The Leighton line of cases all permitted the sharing of tips among non-management
employees. Employers have fared much worse, however, in cases where employees with
supervisory power have shared in tip pools. Several courts have held that such tip-pooling
arrangements violate the prohibition in Section 351 against “agents” of the employer
sharing in the tip pools. Perhaps the highest profile of these cases was a now-overturned
trial court decision in March 2008 that held Starbucks Corporation liable for $105 million in
restitution to a class of approximately 120,000 baristas for the share of tips Starbucks
allocated to its shift supervisors. 167
These cases spring from a 2003 decision, Jameson v. Five Feet Restaurant, 168 in which the
court of appeal held that it violated Section 351 for a “floor manager” to receive 10% of the
tips left for servers. The court noted that Section 350 defines “agent” as any person who
has “authority to hire or discharge any employee or supervise, direct, or control the acts of
employees.” Because the floor manager’s duties included “scheduling servers’ stations,
disciplining servers, hiring employees, and recommending the discharge of employees,” the
court found that there was a sufficient basis in the record to support the jury’s finding that
they qualified as agents.
Several cases have reaffirmed Jameson and held other types of supervisory employees to
be agents who may not participate in tip pools. 169 In the Grodensky case, however, the
court of appeal affirmed the trial court’s finding that “floor managers” were not agents
because they lacked the power to hire and fire and had a power to supervise, direct, or
control the acts of the dealers that was limited to resolving disputes between customers
and the dealers. 170
166
167
168
169
170
172 Cal. App. 4th 908 (2009).
Chau v. Starbucks Corp., San Diego County Case No. GIC836925, rev’d, 174 Cal. App. 4th 688 (2009).
107 Cal. App. 4th 538 (2003).
Hawaiian Gardens, 170 Cal. App. 4th at 485-86 (triable issue of fact whether customer service representatives qualified
as agents because they had responsibility to write reports about and evaluations of tipped dealers); Grodensky, 171
Cal. App. 4th at 1409-10 (shift managers who assigned work, had power to discipline and were responsible for
operation of casino in card room manager’s absence were agents not permitted to share in tip pool) .
Grodensky, 171 Cal. App. 4th at 1452-53.
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