There's a controversy brewing at Starbucks over whether supervisors or assistant managers can share baristas' tip jars.
Paws off my tip jar — that's what Starbucks baristas in New York are telling their supervisors and assistant managers.
New York's Court of Appeals heard a spirited argument Tuesday afternoon about whether the coffee giant's baristas — who aren't full-time employees and often make little more than minimum wage — should share their tips.
A federal court asked the Court of Appeals to interpret New York's labor law and the definition of an employer's "agent," who is prohibited from tip sharing.
Right now, Seattle-based Starbucks — which has 18,000 retail stores in 60 countries and reported $3.6 billion in quarterly revenues in April — distributes the tips to baristas and shift supervisors, but a lawyer for the baristas is arguing that the law does not allow shift supervisors to be in the tip pool.
"The New York tip law protects the most vulnerable employees like baristas — it prevents the dilution of tips by allowing supervisors and assistant managers to be included," said attorney Shannon Liss-Riordan, who filed a complaint on behalf of baristas who oppose sharing tips weekly with supervisors who also assign job stations, coordinate breaks and receive higher wages.
Liss-Riordan told MSN News that New York law defines agents to include managers, supervisors and foremen.
Related: Why you work best at Starbucks
"They should be paid completely by employers and not the tip pool," she said, adding that at issue was whether Starbucks and other employers can use tips to offset the wages of its managerial employees. "A company like Starbucks can afford to raise their employees' wages by a couple of bucks."
Liss-Riordan won a similar case on behalf of Starbucks baristas in Massachusetts, where the federal courts ruled that only employees with no managerial responsibility may share in tip pools. "The world did not come to an end," she said.
Also included in this battle over tips are Starbucks' assistant managers, who contend that they should also be allowed to share the gratuities since they spend time serving customers.
But even Starbucks says that they should not share the tip pool, since it considers them agents. They are excluded from receiving tips because they are full-time, salaried and "rewarded with performance-based bonuses and other benefits not available to their subordinates," the company said.
Adam Klein, an attorney representing the assistant managers, argued that they lack the authority to hire and fire staff and therefore should not be considered company agents under the law.
However, shift supervisors are different, according to the company, since they don't have enough managerial authority.
Starbucks had 413 company-owned stores in New York at the end of its last fiscal year. Company spokesman Zack Hutson said its policy ensures baristas and shift leaders, who spend more than 90 percent of their time serving customers, share equally in the service tips. The policy is applied consistently across the U.S., though not globally because laws differ in other countries, he said.
"Shift managers have a lot of hats on — they not only serve the customers, manage the stores and the employees … but also keep an eye on anything that goes wrong or right," said New York-based retail analyst Hitha Prabhakar, a Starbucks regular. "In that sense, if they are involved with serving customers, they are entitled to that tip."
The Associated Press contributed to this article.