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.