Fredrickson v. Starbucks Corp.
363 Or. 810
| Or. | 2018Background
- Former Starbucks baristas sued Starbucks, alleging it improperly calculated and withheld state and federal taxes (including on unreported tip income), thereby violating Oregon wage statutes by deducting wages.
- Plaintiffs sought injunctive relief, declaratory relief, and statutory wage damages (they ultimately abandoned any claim seeking a refund of withheld taxes).
- Starbucks moved to dismiss on four grounds: federal tax-refund preemption (26 U.S.C. § 7422(a)), lack of standing for former employees to seek injunctions, the Anti‑Injunction Act (26 U.S.C. § 7421(a)), and federal/state statutory immunity for tax‑collection activities.
- The trial court dismissed any refund claim, allowed statutory damages and a form of declaratory relief (but dismissed injunctive relief), rejected AIA and immunity defenses for those remaining claims, and ruled on summary judgment that withholding on unreported tips was not required by law.
- Starbucks sought original mandamus review in the Oregon Supreme Court, asking it to decide whether the AIA and statutory immunity barred plaintiffs' remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Anti‑Injunction Act (AIA) bars plaintiffs' claims | Plaintiffs say their claims seek state statutory wage remedies, not to restrain tax assessment/collection, so AIA does not apply | Starbucks says the AIA prohibits suits that would restrain assessment or collection of federal taxes | Oregon Supreme Court declined to resolve the AIA question in mandamus; dismissed petition as improvidently allowed and left issues for ordinary proceedings |
| Whether federal/state statutory immunities bar the claims | Plaintiffs contend Starbucks' conduct is not protected by tax‑collection immunities and wage remedies remain available | Starbucks contends statutory immunities (federal and state) shield it for conduct in the course of tax collection | Court declined to decide immunity question in mandamus; directed that these issues be addressed in the trial/appellate process |
| Standing to seek injunctive and declaratory relief | Plaintiffs (former employees) pursued declaratory relief and asked for injunctive relief originally | Starbucks argued former employees lack standing for injunctive relief | Trial court dismissed injunctive relief for lack of standing but allowed nonanticipatory declaratory relief; Supreme Court did not reconsider standing in mandamus and left it to ordinary review |
| Whether withholding on unreported tip income was "required by law" under ORS 652.610(3) | Plaintiffs argued state/federal law did not require Starbucks to withhold on unreported tips, so the deductions violated wage statute | Starbucks implicitly argued its withholdings were lawful or required | Trial court ruled for plaintiffs on the merits, but the Supreme Court did not resolve merits issues via mandamus and left them for the ordinary course of litigation |
Key Cases Cited
- State v. Blok, 352 Or. 394, 287 P.3d 1059 (2012) (discussing discretionary nature of Supreme Court's mandamus jurisdiction)
- State ex rel. Automotive Emporium v. Murchison, 289 Or. 265, 611 P.2d 1169 (1980) (direct appeal is generally an adequate remedy barring special loss that justifies mandamus)