Coffee purveyor Starbucks Co., which has positioned itself as a socially responsible corporate citizen, has been hit with a pair of lawsuits accusing the company of cheating its managers and assistant managers out of overtime pay. Starbucks denies any wrongdoing.
The Seattle-based retailer is the latest of hundreds of companies to face lawsuits filed under California’s unique labor laws, challenging the exempt status of managers and assistant managers. Taco Bell recently agreed to pay $13 million to settle an overtime lawsuit involving 3,100 restaurant managers and assistants in California.
Under state law, employers must pay overtime unless an employee qualifies for an exemption, which, among other things, requires that he spend more than 50% of his time on management duties.
“It’s so apparent to anybody who walks into a Starbucks that the managers are doing the same work as the subordinates,” said Dennis Moss, a Santa Monica lawyer who is representing two managers in a suit filed in Los Angeles County Superior Court. “If you are out there making coffee or cleaning a cappuccino machine, it’s not managerial time. It’s not exempt.”
In a statement issued Thursday, Starbucks said it has done nothing wrong.
“Although it is not our policy to comment on pending litigation, Starbucks feels strongly that it has carefully complied with all applicable laws regarding the employment conditions of its partners, and we intend to vigorously investigate and defend these lawsuits,” the statement said.
“The welfare and working conditions of our partners [employees] have always been, and will continue to be, the highest priority to Starbucks.”
One of the two plaintiffs in the Los Angeles case, Olivia Shields, said managers are expected to work at least 40 hours a week on the floor--making and serving coffee, ringing up orders, cleaning and stocking.
Shields, who has been on disability leave since June 6, said she has worked at seven Starbucks outlets on Los Angeles’ Westside since 1998, first as an hourly coffee server, then as an assistant manager and, for more than two years, as a manager. She said management duties take 10 to 20 hours on top of the floor work.
“You can’t be making drinks and running the business,” she said. “I spend my 40 hours on the floor and spend the rest of my time managing the business.”
Shields said September, at the end of the company’s fiscal year, was the hardest month because she has had to cut back on the hours of subordinates to meet corporate labor cost goals. For the last three years, outside contractors, such as window washers and other heavy cleaners, also have been cut during the last quarter, forcing Shields to pick up those duties as well, she said.
“That has meant working 60-hour weeks just to make Wall Street happy, come Oct. 1,” she said. “It’s the last quarter of the year that we die. You can barely move by October.”
A Seattle native, Shields said she was one of Starbucks’ first customers and was eager to work for the company she believed was a socially responsible business that treated its employees well.
“They said, ‘When we grow, we’re not going to change,’ ” she said. “They’ve changed drastically.”
Shields’ suit and another one, filed June 20 in Oakland, both seek class-action status and, if granted, could be combined to represent an estimated 1,000 current and hundreds of former managers and assistants. Both suits demand pay at time and a half for all overtime worked over the past four years.
A lawyer representing two managers in the Oakland case, Erin Day, said the salaries of assistant managers and managers she has spoken to range from $27,000 to $38,000 a year.
“They give them a title and the key to the store, and they work them as much as possible,” she said. “It keeps their budgets low because they work them long hours and pay them a salary without any overtime.”