Starbucks Loses California Supreme Court Wage Case

California’s Supreme Court ruled on Thursday that employers are required to pay wages for all hours worked, even after an employee clocks out. Reuters reports that the wage ruling will likely lead to the revival of a lawsuit against Starbucks Corp.

The Douglas Troester v. Starbucks Corp. ruling challenges a federal wage law that excuses companies from paying workers for small amounts of time. The federal says that small amounts of time can be difficult to record. The court says that this law does not apply under California law.

In the suit, Troester alleged that Starbucks Corp. required him to clock out before completing tasks mandated by the company. This included a store closing procedure that required employees to transmit sales, profit, loss and inventory to Starbucks’ headquarters.

In essence, the heart of Troester’s suit hinges on whether the federal Fair Labor Standard Act’s ‘de minimis’ doctrine applies to unpaid wages under sections of the California Labor Code. Starbucks is one of many employers who use “rounding”. Rounding is a method of calculating employee pay by rounding up or down to determine hours worked and essentially determine pay.

What is De Minimis in Federal Wage Laws?

Congress wrote de minimis or rounding into law in 1961. In fact, the law came nearly a decade after a 1946 Supreme Court ruling that invoked “the realities of the industrial world”. The realities include the difficulties of keeping payroll records for brief periods. However, because states can set their own standards, California never adopted the de minimis rule. In fact, California labor law ensures that employers will pay employees for all work performed.

Troester was a supervisor for the company and made $8 an hour. In addition, he contends that the company owes him more than $100 in unpaid time. He says during his 17 months at the company, he was required to send daily sales data, set the store’s alarm and walk coworkers to their cases—tasks that could take anywhere from four to 10 minutes. Troester’s lawyer says that he could’ve been fired had he not completed these tasks off the clock.

California is the most populous U.S. state and accounts for about 10 percent of the U.S. workforce. Consequently, the court’s decision is likely to affect the profits of restaurants and retailers in California who employ hourly wage workers.

The court decided the case in a 7-0 ruling.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” Justice Goodwin Liu said. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”

Opponents against the ruling argue that the ruling will bring more wage-and-hour disputes. Additionally, opponents say that it will invite more class action lawsuits against employers.

The Carlson Law Firm Can Help in Wage Theft Cases

We are national employment attorneys dedicated to helping those have had wages stolen by their employers. If you believe that your employer is not paying you all of the overtime your deserve, is improper taking a portion of your tips, or you are receiving less than the minimum hourly, it is in your best interest to schedule a free case evaluation with a Wage Loss/FLSA attorney.

Here at The Carlson Law Firm, our lawyers are ready to help you with wage and hour law violations. We handle claims all across the country.

Contact us today to schedule your free case evaluation. We work on a contingency fee basis, meaning, we don’t get paid until you do. Our legal team will work tirelessly on your behalf to get you the recovery you deserve.

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