Winans v. Starbucks Corp., 08 Civ. 3734(LTS)(JCF).

• Decision Date: 11 July 2011
• Docket Number: No. 08 Civ. 3734(LTS)(JCF).,08 Civ. 3734(LTS)(JCF).
• Citation: 796 F.Supp.2d 515
• Parties: Eugene WINANS et al., Plaintiffs, v. STARBUCKS CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

796 F.Supp.2d 515

Eugene WINANS et al., Plaintiffs,

v.STARBUCKS CORPORATION, Defendant.

No. 08 Civ. 3734(LTS)(JCF).

United States District Court, S.D. New York.

July 11, 2011.

Adam T. Klein, Justin Mitchell Swartz, Juno Emmeline Turner, Lewis M. Steel, Melissa E. Pierre–Louis, Molly Anne Brooks, Outten & Golden, LLP, New York, NY, for Plaintiffs.

Gregory W. Knopp, Akin Gump Strauss Hauer & Feld LLP, Los Angeles, CA, Kelly M. Scindian, Samidh Jalem Guha, Akin Gump Strauss Hauer & Feld LLP, New York, NY, Nathan J. Oleson, Daniel L. Nash, Jessica W.P. D'Arrigo, Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC, for Defendant.

Memorandum Order

LAURA TAYLOR SWAIN, District Judge.

Plaintiffs Eugene Winans, Michael Bienthcs, Reynold Mangones, Matthew Taber and Kristen Tomaino (collectively, “Plaintiffs”), formerly employed as Assistant Store Managers (“ASMs”) in stores operated by Starbucks Corporation (“Starbucks” or “Defendant”), bring this putative statewide class action asserting a claim against Starbucks for alleged violations of New York Labor Law § 196–d (“Section 196–d”). Plaintiffs assert that they are entitled, pursuant to Section 196–d, to participate in distributions from Starbucks stores' collective tip boxes and that Starbucks' tip distribution policy (the “Policy”) improperly precludes them from receiving such distributions. ¹ Plaintiffs have adequately averred that the Court has diversity jurisdiction of this action pursuant to the Class Action Fairness Act of 2005. 28 U.S.C. § 1332(d).

Plaintiffs have moved for class certification and the parties have cross-moved for summary judgment pursuant to Rules 23 and 56 of the Federal Rules of Civil Procedure. The Court has considered thoroughly the parties' submissions. For the following reasons, Defendant's motion for summary judgment will be granted in its entirety and Plaintiffs' complaint will be dismissed. The Court will not address Plaintiffs' class certification motion in light of the Court's ruling on Defendant's summary judgment motion.

Background

The following material facts are undisputed unless otherwise indicated. ² Plaintiffs are former employees of Starbucks and were New York residents during their time of employment. (Def.'s Rule 56.1 Statement (“Def.'s 56.1 Stmt.”) ¶¶ 1–5.) Starbucks is a Washington-based coffee and beverage company that operates stores throughout New York State. (Pls.' Am. Compl. ¶¶ 18–20.) Winans worked as an ASM from January 2005 until approximately January 2006 in two stores located in Queens, New York. (Def.'s 56.1 Stmt. ¶ 1.) Bienthcs worked as an ASM from June 2002 to January 2004 in a store on Columbus Avenue in New York, New York. ( Id. ¶ 2.) Mangones worked as an ASM from the spring of 2006 until September 2007 in a store in Jericho, New York. ( Id. ¶ 3.) Tomaino worked as an ASM from September 2006 to December 2007 in a store in New York, New York. ( Id. ¶ 4.) Taber worked as an ASM from approximately February 2007 to July 2007 in a store in Brooklyn, New York. ( Id. ¶ 5.)

Starbucks refers to its store employees as “partners.” (Decl. of N. Oleson (“Oleson Decl.”), Ex. I, (“Partner Guide”) at 9.) Partners are divided into four categories: Baristas, Shift Supervisors, Assistant Store Managers and Store Managers. ( Id.) Baristas and Shift Supervisors are part-time, hourly employees who are primarily responsible for customer service tasks. (Def.'s 56.1 Stmt. ¶¶ 7–8.) ASMs are salaried, full-time employees who perform customer service tasks and are also responsible for interviewing applicants, making hiring recommendations, processing payroll and other managerial tasks. ( Id. ¶¶ 11–13.) Store Managers are salaried, full-time employees responsible for their stores' operations. ( Id. ¶¶ 11, 14.) ASMs and Store Managers are eligible for certain benefits—such as holiday pay, sick pay and life insurance—that Baristas and Shift Supervisors do not receive. ( Id. ¶ 20.)

Starbucks has a detailed written policy governing the collection, storage and distribution of tips. (Oleson Deck, Ex. J, (“Partner Resources Manual”) § 4.6.) The Policy requires that each store place a plexiglass cube container near the cash register (the “collective tip box”) where customers may place tips. ( Id.) Once a week, a Shift Supervisor or Barista calculates the weekly total of accumulated tips and apportions the tips to each Barista or Shift Supervisor according to the number of hours that he or she worked that week. (Def.'s 56.1 Stmt. ¶ 18.) Under the Policy, only Baristas and Shift Supervisors may handle and receive the proceeds from the collective tip boxes while ASMs and Store Managers may not. (Partner Resources Manual § 4.6.) The written policy does not discuss the handling of tips that customers give to directly to an employee (as opposed to placing the tip in the collective tip box). ( Id. §§ 4.6–4.7.)

Discussion

Summary judgment is to be granted in favor of a moving party if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (the moving party bears the burden of establishing that there is no genuine issue of material fact). A fact is considered material “if it might affect the outcome of the suit under the governing law,” and an issue of fact is a genuine one where “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Holtz v. Rockefeller & Co. Inc., 258 F.3d 62, 69 (2d Cir.2001) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505). The Second Circuit has explained, however, that “[t]he party against whom summary judgment is sought ... ‘must do more than simply show that there is some metaphysical doubt as to the material facts.... [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial.’ ” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir.2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). Similarly, “mere conclusory allegations, speculation or conjecture” will not suffice to defeat summary judgment. Cifarelli v. Vill. of Babylon, 93 F.3d 47, 51 (2d Cir.1996); see also Fed.R.Civ.P. 56(e).

When cross-motions for summary judgment are filed, “the standard is the same as that for individual motions for summary judgment.” Natural Res. Def. Council v. Evans, 254 F.Supp.2d 434, 438 (S.D.N.Y.2003). “The court must consider each motion independently of the other and, when evaluating each, the court must consider the facts in the light most favorable to the non-moving party.” Id. (citing Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir.2001)).

New York Labor Law Section 196–d prohibits an “employer or his agent ... or any other person” from “demand[ing] or accept[ing], directly or indirectly, any part of the gratuities received by an employee, or retain[ing] any part of the gratuity or of any charge purported to be a gratuity for an employee.” N.Y. Lab. Law § 196–d (McKinney 2009). Section 196–d goes on to clarify that “[n]othing in this subdivision shall be construed as affecting ... the sharing of tips by a waiter with a busboy or similar employee.” Id.

“The drafters of Section 196–d ‘sought to end the unfair and deceptive practice of an employer retaining money paid by a patron under the impression that he is giving it to the employee, not to the employer.’ ” In re Starbucks Emp. Gratuity Litig., 264 F.R.D. 67, 72 (S.D.N.Y.2009) (quoting Samiento v. World Yacht Inc., 10 N.Y.3d 70, 78 n. 4, 854 N.Y.S.2d 83, 883 N.E.2d 990 (N.Y.2008)). It is thus unlawful for employers or their agents to participate in their subordinates' tip pools. Chung v. New Silver Palace Rest., Inc., 246 F.Supp.2d 220, 229–30 (S.D.N.Y.2002); Chan v. Sung Yue Tung Corp., No. 03 Civ. 6048, 2007 WL 313483, at *20 (S.D.N.Y. Feb. 1, 2007). Nor can employers retain “ for themselves any portion of the employees' tips.” Chan, 2007 WL 313483, at *17 (emphasis added). See also Samiento, 10 N.Y.3d at 81, 854 N.Y.S.2d 83, 883 N.E.2d 990. The statute does not, however, bar employers from mandating that tip-eligible employees participate in tip pools ( see 12 NYCRR 146–2.16(b)), nor does it impose any requirement that an employer provide a tip-inclusive compensation structure for all employees who would be statutorily eligible to participate in a tip pool.

Plaintiffs claim that, notwithstanding their “Assistant Store Manager” titles, their mix of customer service and other duties renders them “similar employees” who are eligible to share in wait-service employee tip pools. They further urge that Starbucks violates Section 196–d by excluding them from collective tip box distributions, reasoning that customers expect that tips will be distributed among all those seen serving in the stores and that, by excluding ASMs from the tip box, Starbucks is in effect demanding or redistributing the ASMs' earned share of tips. As noted above, Plaintiffs also contend that Starbucks violates the New York statute by forcing ASMs to contribute to the collective tip box money that is handed directly to them.

Material issues of fact concerning the nature of certain of the ASMs' duties preclude summary judgment with respect to the question of whether ASMs are employees who are statutorily eligible to participate in tip pooling. Starbucks is nonetheless entitled to judgment as a matter of law because Plaintiffs have failed to demonstrate that, even if ASMs are eligible employees, they have a right to participate in collective tip box distributions, and Plaintiffs have failed to proffer specific facts in support of their claim that Starbucks requires them to relinquish tips that customers give them personally.

“[W]here the language of a statute is clear and unambiguous, courts must give effect to its plain...