The Starbucks Lawsuit

You've probably heard about the class action suit against Starbucks. The complainants are alleging that their jobs do not qualify for exemption (being paid a salary with no overtime) because they spend a majority of their time doing the non-exempt work of a barista.

When I hear about these big cases, I try to put myself in the position of the HR leaders of the company who were responsible for driving these decisions. Because I have been on the inside for cases like this and have had my share of conversations with wage and hour lawyers, I am left with just one response.

What were the HR leaders at Starbucks thinking?

Caveat: I just want to make it clear that I am responding based on what I am hearing in the news - I have no special/inside knowledge of the situation at Starbucks. I could be wrong and misinformed.

 

I respect Starbucks a lot and I spend thousands a year on their products. But this seems to be to be a no-brainer. We've all gone into Starbucks stores and we can see that the managers are "working managers."

The laws may vary a bit from state to state and all states must minimally comply with FLSA (Fair Labor Standards Act). With all the unique jobs out there, it's is not always cut and dry to figure out which roles ought to be exempt. That said, regardless of the exemption type, all jobs need to pass the test that the exempt work takes a majority of their time. In the case of a Starbucks store manager- particularly small locations with just a few employees - one would predict that their managers spend much of the time in the front of the house.

There are a couple issues here. First, is how they interpret the regulations and how they design the jobs. Second, they need to make decisions that are right  - in compliance and in both the employees' and company's interests. Third, they must acknowledge that as a large and well known company, they have a big red target on their backs (all companies ought to comply, but Starbucks must cross all their Ts and dot all their Is).

But they are voted a "great place to work," every year! I think Starbucks does many, many things right and they offer a lot of benefits to part-time workers. That said, all it takes is one employee to get the ball rolling on a big class action lawsuit.

I would guess that there will be many more to come in other states, too. And this could affect other businesses, too.

The facts will unfold, and who knows, maybe I don't know the pertinent facts and maybe I am wrong. Maybe the managers do spend most of their time doing exempt level work (or ought to be). But if I were in the HR department at Starbucks - based on what I see from the outside -  I would not have allowed the store managers to be classified as exempt. Sometimes the HR leaders get vetoed, too, but that's when we need to show our leadership to ensure the right things are done. It's moments like these that we show why we exist.

When I do HR work, I am OK being the "evil HR lady" as long as I know that the work I am doing leads to the right decisions and that it helps protect the company and its employees. I was in this situation once, where we needed to make a lot of unpopular (to the executives and the company purse) changes to do the right things. It was a very difficult time and I was hated by a large number of people because of the disruption. But it was the right thing to do and that was proven soon thereafter.

HR leaders are faced with gnarly and complex situations every day and most of them pour their hearts into their work - work that is largely ignored by others. Think about it, HR leaders get about as much respect as Lawyers and IRS auditors.

But I cringe and feel pain when these things happen to great companies because of what seems like weak or inaccurate HR leadership. Sorry, but  if this case reveals that the managers ought not be exempt (my prediction), I blame the HR leadership at Starbucks. As hard - as agonizing - as it would have been to lead this change, you should have done it. That's why you are there.

If the facts come out that I am wrong, I will be the first to apologize to the HR leaders a Starbucks on this blog. In fact, I hope I am wrong, but I fear I am not.

Comments

[Steve]

I work for a company that is owned by GE Capital and they do the exact samething as Starbucks in regards to their managers. I perform the same functions as an hourly personnal but I generally work 60 hours a week. Our company has a unwritten code of no overtime pay to hourly employees. So my one hourly employee only works 40hrs a week. I have to pick up the slack. I'm also on-call 24hrs/day. It happens often that I get woken up in the middle of the night and have to go the office. Our company has a policy that any hourly employee that gets called-in after hours gets automatic 4hours overtime pay. However this policy is useless, because I'm the one that gets called-in. So I'm pretty disgruntled with not just my employer but in general the overall work envirnoment in America. A lot of companies out there expect long workdays/weeks without compensating the employee.

[Lisa Haneberg]

Steve:

Regardless of the way you are paid, 60 hours per week is a lot to be working on a sustainable basis. I hope you can find better balance - life is too short!

And I would recommend you talk with your HR manager if you have questions about your pay.

[Steve]

Lisa,
I completely agree that life is too short. I have 3 kids and they grow up fast so it's tough when I don't get to see them as much as I like. I have a BBA but it's not good enough to find another job with comparable pay. I live in a medium size town. I was born and raised this town. I know influential people in the community. However there's not much out there. Sure there are other jobs but I would be leaving one frying pan just to go to another. Overworking employees is a growing trend that I see.

[Steven Conner]

I have a possible lawsuit against Starbucks for age discrimination. Is there an pending case now? If you know please email me zarxo@verizon.net or call me 434-987-1987

[Lisa Haneberg]

Steven:

I wold have no idea about other cases. The one I am referring to was on the news.

[jq9]

I work for a social service agency wherein we're required to bill a minimum of 90 hrs/mo. Most of us average 55-65 hrs/wk. If we take a vacation or are sick, we're still accountable for the 90 hrs. Professional trainers paid by the company state that our having "x" client case load cause us to "spin our wheels" and not give good service. Our CEO stated our case loads would be reduced if we maintained overproduction for 2 qtrs. I had been doing 120-150 hrs for 3 qtrs, and they still would not reduce my case load. I ended up getting sick, among other political entrapments, and separated services. My own supervisor stated they were just following directives from their boss, and that all the companies are going this way now. The unions seem to be in the pockets of the company. The "PURE" capitalistic agenda [I'm not a commy] is returning America to the style of the old southern plantations where we use courts and counselors as the 'massa' and overseer, to extract more work, for less pay. To fix this, corporate tax laws need to be adjusted to make it attractive for companies to treat workers like humans vs. robots.