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Desert Local News - Desert Local News Print at Home Edition 11 March 26 - Index

30 california wire
The path out
If there is any rhyme or reason to
Gov. Arnold Schwarzenegger’s budget
strategy, it escapes us. This incoherence
is helping no one.
On the one hand, Schwarzenegger’s
staff insists he is as adamantly against
new taxes as ever. “Tax increases are
the wrong way to go,” spokesman Aaron
McClear said in an interview yesterday.
On the other hand, the governor himself
regularly says the opposite - that he
would consider hiking taxes in the right
circumstances. Last month, he expressed
interest in reducing tax credits for parents
and seniors. This week, he discussed a
new tax on certain services, perhaps car
repairs or hairstyling.
But Republican lawmakers vow to
block any tax hikes on the grounds that
heavy spending is the real problem, and
they have enough votes to get their way.
Schwarzenegger’s other primary tack on
the budget shows his sympathy to the
overspending argument. When he stops
musing about what tax hikes might be
worth pursuing, he touts basic budget reforms
to end the state’s habit of sharply
hiking spending during boom revenue
years even though that leads to vast deficits
during down years.
His proposal would smooth out
spending increases, divert part of revenue
spikes to a rainy-day fund and require
that some budget cuts be prenegotiated
so they can take effect immediately during
periodic revenue downturns.
This is a great idea. Yet most Democrats
in the Legislature loudly oppose
the plan, and the history of a similar 2005
budget reform measure suggests it might
not fare well if on the November ballot.
But the paradox here is that while his
two main responses to the budget mess
may be nonstarters individually, they
could be quite popular if offered as a
package. Plenty of Democratic voters
are sick of the state’s reoccurring budget
dramas and would go along with a pragmatic
reform measure if it were paired
with more education spending. Some
Republican voters could be persuaded to
put up with limited tax hikes if they had
a firm guarantee of no more spending
sprees. To date, however, the governor
has balked at linking the two policies,
with long-term budget reform and the
2008-09 spending plan inexplicably considered
separate issues. This separation is
hard to fathom.
We think a two-or three-year budget
freeze in which state leaders finally
establish spending priorities makes the
most sense. But politics is the art of the
possible, and a compromise of the sort
sketched out above may be the only
way to avoid the worst budget stalemate
ever. Here’s hoping this dawns on
Schwarzenegger before he wastes more
time with his scattershot strategy.
Reprinted from The San Diego
Union-Tribune.
Starbucks ruling:
Pay $105 million
in tips case
By Greg Moran
Court Judge Patricia Cowett capped a
class-action lawsuit filed four years ago
SAN DIEGO - A San Diego Superior against the coffee giant.
Court judge ruled Thursday that Starbucks
Cowett also said she would slap an
has to pay nearly $106 million in restitu- injunction on the company ordering it to
tion to an estimated 120,000 current and halt the practice of allowing shift supervi-
former baristas in California because the sors to share in money from the ubiquitous
coffee company illegally allowed super- tip jars at the more than 2,000 Starbucks
visors to share in tip pools over the past stores in the state.
eight years.
“It’s a huge victory for the baristas,”
The four-paragraph ruling by Superior said David Lowe, an attorney for the
plaintiffs, using the term for the
counter workers who make the
lattes and cappuccinos.
“Starbucks has taken the
position throughout this case
that they should be allowed to
do whatever they wish, regardless
of California law,” he said.
“They have been defiant on that
issue but now this means they
not only have to reimburse the
baristas but they have to follow
the law.”
The award is likely the largest
ever in a tip-pooling case in
the state, legal experts said.
In California, owners, managers
or other “agents” of business
owners can’t share in tips.
In the first phase of the class-action
suit, Cowett ruled that shift
supervisors were essentially
agents under state labor law, and
therefore the company’s policy
allowing them to share in tips
violated that law.
The company argued that
shift supervisors were not managers
or supervisors, that they
performed many of the same
tasks as baristas, and should
share in the tips.
In a sharply worded statement
Thursday, Seattle-based
Starbucks spokeswoman Valerie
O’Neill said Cowett’s ruling
was unfair to the shift supervisors.
The company will appeal
and will also seek to postpone
the injunction halting the practice
until the appeal is resolved.
The case “represents an extreme
example of the abuse of
class-action procedures in California
courts,” O’Neill said in
the statement.
The award represents an es-
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timated amount of cash from tip
pools that was paid out to shift
supervisors at the company’s
California stores between October
2000 and February 2008.
Experts who testified during
the non-jury trial on behalf of
the plaintiffs used a sampling of
5,400 tip records from a random
selection of 250 stores in the
state, Lowe said.
The experts estimated the
hourly tip rate $1.87, plus or minus
16 cents, during the time period,
he said. In determining the
restitution amount, Cowett took
the low estimate of $1.71 cents
and multiplied it by the hours
worked by shift supervisors.
She ordered the company to
pay $86.6 million in back tips,
plus interest that plaintiffs estimated
will be $19.1 million.
The total represents the
amount paid out to shift supervisors
during the eight-year period
that now has to be returned
to the baristas. The reimbursement
for individual workers has
not been determined.
“The number is groundbreaking,”
said Timothy Kolesnikow,
an El Segundo, Calif.,
lawyer and former attorney for
the state labor commissioner.
He said the money represents
the amount that Starbucks saved
on payroll, by not paying higher
wages to shift supervisors.
“This is what Starbucks
profited from by their wrongdoing,”
he said.
The lawsuit relied on a state
labor code section governing
tips, but was actually brought
under the state’s Unfair Competition
Law.
Typical tip-pooling cases
deal only with restaurants or
small chains, he said.
San Diego employment lawyer
David Strauss said the sheer
size of Starbucks meant it could
expect to pay a large restitution
amount.
“You rarely get an employer
this big that had this kind of a
tip policy,” Strauss said.
The suit was filed in 2004 on
behalf of a University of California
San Diego student who
worked as a barista in 2003-04.
A hearing is set for May 1
to begin determining how the
money will be divided among
the eligible members of the
class, Lowe said. At that time,
the plaintiffs’ lawyers will also
ask the court to award fees for
their work, he said.
Julie Buehler worked at
Starbucks stores in San Diego’s
Clairemont area in
2003 and said she was shocked
and happy with the size of the
award.
“I think it is a great precedent
to set for a company as large as
Starbucks,” she said. “There are
a lot of places that work on this
sharing tips. Other companies
will be more careful now, and
will know that the people who
earn the money should keep the
money.”
BreeAnna Toups said she
worked at a Starbucks in nearby
Santee from 2004 to 2007. Her
hourly wages increased a little
more than a dollar during that
time, so the tips were important.
“I think it’s money I definitely
earned,” she said of her
share of the restitution amount.
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