Matamoros v. Starbucks Corporation
699 F.3d 129
1st Cir.2012Background
- Starbucks operates in Massachusetts; tips are pooled and distributed to baristas and shift supervisors weekly by hours worked.
- Named plaintiffs are former Starbucks baristas who allege their tip-pooling policy violated the Tips Act by including shift supervisors.
- District court, in a class-action diversity case, held the Tips Act’s plain language forbids including shift supervisors in tip pools and awarded damages exceeding $14,000,000.
- Damages were calculated from $7,500,000 in pooled tips to shift supervisors during 2005–2011, with trebling of post-July 12, 2008 portions.
- Court certified a class of Massachusetts baristas for the period March 25, 2005 to March 18, 2011; judgment included prejudgment interest and a Treble damages provision under Massachusetts Wage Act.
- Court majority affirms district court’s rulings on the Tips Act interpretation, class certification, and treble damages conclusions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether shift supervisors are 'wait staff' under the Tips Act. | Starbucks argues shift supervisors have managerial responsibilities and thus are ineligible. | Starbucks contends shift supervisors lack 'no managerial responsibility' status. | Shift supervisors are not wait staff; they have managerial duties and are ineligible to share in tips. |
| Whether the district court properly certified the class. | Class should include all Massachusetts baristas during the period; potential conflicts are manageable. | Intra-class conflicts among baristas and shifted supervisors threaten adequacy. | Court acted within its discretion; class certification affirmed. |
| Whether treble damages under the Wage Act were correctly applied. | All damages should be trebled under amended Wage Act provisions. | Trebling post-2008 damages may raise due process concerns; pre-2008 discretion remains. | Treble damages for post-2008 losses treated as liquidated, not punitive; pre-2008 discretion affirmed. |
| Whether the district court properly exercised discretion regarding pre-2008 treble damages. | Pre-2008 conduct should also be punished with treble damages. | Pre-2008 standard required outrageous conduct; court did not err in denial. | Discretion preserved; no error in denying pre-2008 treble damages. |
Key Cases Cited
- Rosnov v. Molloy, 952 N.E.2d 901 (Mass. 2011) (outrageousness standard for older Wage Act treble damages)
- Wiedmann v. The Bradford Grp., Inc., 831 N.E.2d 304 (Mass. 2005) (whether treble damages awarded under earlier Wage Act)
- Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32 (1st Cir. 2003) (class certification and adequacy principles)
- Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697 (1945) (liquidated damages nature of certain damages)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) (punitive damages framework not apply to Wage Act treble damages)