Fredrickson v. Starbucks Corporation

download Fredrickson v. Starbucks Corporation

of 51

Transcript of Fredrickson v. Starbucks Corporation

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    1/51

    . .. . .

    1

    234 IN THE CIRCUI COURT OF THE STATE OF OREGON

    FOR THE COUN OF MULTNOMAHANNAH FREDRICKSON, ASHLEY Case No. 1212 -15734KRNING and MAURIEE BRACKE,

    5678

    Plaintiff, CLAS ACTION COMPIANTvs.

    10 Defendant.

    Oregon Wage and Hour Class Claimsfor an amount to be determined at tral anddepending on several factors not currentlyascertinable, but not less than $50,000 andnot believed to exceed $5,000,000Jury Trial RequestedNOT SUBJECT TO MADATORYARBITRATIONFilng fee of $755 per ORS21.160(1)(d)

    9ST ARUCKS CORPORATION, aWashington corporation,

    11121314 COMPLA-ClAS ACTION

    ~ L16 This is an action under state wage and hour laws for certin present and former17 employees of Starbucks Corporation (hereinafter "STARUCKS") to recover civil18 penalties (and pre- and post-judgent interest thereon), as well as for declaratory19 and injunctive relief. All allegations herein are made to the best of Plaintiffs' and their

    20 counsel's good-faith knowledge, information and belief, based upon the evidence21 adduced to date. Plaintiffs have in their possession several documents frm Hannah22 Frdrickson's employment (including those prouced by STARUCKS), but do not23 have any time or pay record from Ashley Krening or Maurialee Bracke's employment

    Page 1 - CLAS ACTON COMPLAINTJON M. EGAN. PC240 SIX STREETLA OSWEGO OR 97034.2931'lU;PHON: (503) 697.3427 . FAX (866) 3 J i -5629lNO(~EGANU;GALTEM.CO EXHIBIT 1

    Page 2 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 2 of 70 Page ID#: 13

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    2/51

    1 (or any of the other class members). Before this litigation wa filed, Plaintiffs and2 their counsel requested additional documents, information and legal citations to

    3 explain and/or substantiate STARUCKS's legal and factual positions. Some of these4 were provided; some were not The class action allegations made herein are therefore5 founded upon STARUCKS documents specifically indicating that violations arise6 from company-wide policies, as well as based on the reaonable information and7 belief that certin other violations apparent from the documents could not have8 happened if STARUCKS's computer system were not set up to allow and/or require9 such violations to occur. Plaintiff intend to, and reserve the right to, amend their

    10 Complaint to remove or add any individual and/or class violation allegations as11 necessary after additional discovery. Based upon the facts now known, and/or to the12 best of their information and belief arrived at after reasonable inquiry into the13 circumstances, Hannah Fredrckson, Ashley Krening and MauIialee Bracke14 (hereinafter "Employees") complain as follows against STARUCKS, on behalf of15 themselves and all other Oregon STARUCKS employees who reported or were16 imputed tips.1718 PARTIES~ ~20 At all times material herein, Plaintiff were residents of Multnomah County,21 Oregon. The class members are or were Oregon employees of ST ARUCKS who22 reported or were imputed tips.23 3.

    Page 2 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SIX11 S'ltAKE OSWEG. OR 9703429311lLE0N: (503) 697-3427. FAX; (866) 311-5629

    1N00EGANLEOAL-nAM.COM EXHIBIT 1Page 3 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 3 of 70 Page ID#: 14

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    3/51

    1 Defendant STARUCKS is a Washington corpration doing business in2 Multnomah County, Oregon and elsewhere. At all times materil herein,3 STARUCKS owned, operated and managed over 100 coffee servce establishments4 in the State of Oregon, including many in Multnomah County.56 COMMON FACT7 4.8 With the information available to them at this time, Plaintiff base this class9 action on STARUCKS's wrongfl deduction of three categories of taes from its

    10 employees' wages based on imputed and other tip amounts. On information and11 . belief, Hannah Fredrckson's records reveal additional potential violations regarding12 the wrongfl overdeduction of Workers' Benefit Fund asessments and wrongfl13 failure to pay for breaks under 30 minutes. Afer additional discovery, Plaintiffs14 reerve the right to allege an entitlement to damages and/or injunctie relief based15 upon these additional potential violations, and they hereby give notice of their intent16 to do so in that event.1718 TIp Deduction Claims-Wrongf Deducton of Oregon mcome Taxes,19 Federal mcome Taxes and FICA Taxes20 5.21 STARUCKS customers leave a substantial amount of cah tips every day in22 containers locted in all STARUCKS stores, tyically nea the cah registers.23 STARUCKS doe not allow customers to put tips on their credit cards.

    Page 3 - CLAS ACTION COMPLANTJON M. EGAN. p240 SIXTH STLAE OSWEG. OR 97034-293 iTELEPHom: (503) 697-3427. FAX: (866) 3 i 1-5629

    INFO('EGANU!GALllAM.CO EXHIBIT 1Page 4 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 4 of 70 Page ID#: 15

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    4/51

    .'~.. .'",~.""".'1 6.

    2 The tip-eligible employees pool these tips eveiy week, distributing them amongst3 themselves according to a common formula: each tip-eligible employee gets the same4 proporton of the tip pool as their proporton of the total hours worked that week atS that loction.6 ~7 For paycheck purposes, STARUCKS assign a phantom amount of tips to each8 employee-soe for each hour they worked. STARBUCKS call these phantom tips9 "imputed tips." The employees never reported that they had received that amount of

    10 tips to STARUCKS-indeed, STARUCKS specifically discourages its employees11 from reportng their tips. STARBUCKS just makes up that phantom number out of

    12 thin air (50e per hour worked) and wrtes that down on the employee' pay stubs as13 the assumed amount of tips they received.14 8.15 Oregon law prohibits an employer from taking any deductions out of an16 employee's paycheck unless the employer is "required to do so by law" or the17. employee voluntarily consents to the deduction in wrting. ORS 652.610(3). When18 the Oregon Legilature enacted ORS 652.610(3) in 1977, there were laws on the books19 in other states that allowed employers in those states to take deductions whenever20 they were "required or permitted" or "required or empowered" to do so by law, or21 when a deduction wa "in accordance with" or "authorized" by law. Oregon chose not22 to adopt any of those constrctions. Instead, Oregon chose to allow only those23 deductions that are "required" by law. That makes penect sense, since John W. Wolf,

    Page 4 - CLASS AClION COMPLANTJON M. EGAN. PC240 SIXll SlR EET

    LAKE OSWEGO. OR 97034-2931TELEHCM: (503) 697-3427. FAX: (866)311.5629INFoEGALEGIILTEAM.COM EXHIBIT 1Page 5 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 5 of 70 Page ID#: 16

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    5/51

    1 Executive Assistant to the Commissioner of the Oregon Bureau of Labor, tetified to

    2 both the House Committee on Labor and the Senate Committee on Labor, Consumer

    3 and Business Afairs that part of that section's purpose wa "allowig the employee4 some contrl over what can be deducted frm wages." It would be fully in keeping5 with that purpose to require employers to get their employee' voluntary wrtten

    6 consent before taking deductions from their paychecks that were merely allowed (not

    7 required) by law.8 9.9 STARUCKS withholds Oregon income taes, federal income taes and federal

    10 FICA taes frm its employees' paychecks for phantom amounts of tips it assigns11 ("imputes") to the employees. The employee have not voluntaly consented to those12 deductions in wrting, so the deductions are ilegal unless STARUCKS is "reqired13 ... by law" to make them. It is not.1415 Oregon Income Tax Deducton Claims16 10.17 Oregon tax law prohibits employers from withholding Oregon income ta based18 on tips that are given directly to the employee by their customers (i.e., that are not19 collected and distrbuted by the employer). ORS 316.162 defines wages for

    20 withholding purposes as "remuneration for servces penormed by an employee for an

    21 employer." Tips that are given directly by customers to employees do not fit into that22 definition. STARUCKS should therefore not be withholding Oregon income ta23 from its employees' wages based on any tip amounts (whether imputed or not). The

    Page 5 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SlX S11EELAKBOSWEG. OR 97034-2931

    'ILEPHONE: (503) 697-3427. FAX: (866) 311-5629IN~EGALEGAL11AM.CO EXHIBIT 1Page 6 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 6 of 70 Page ID#: 17

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    6/51

    1 Oregon Departent of Revenue's own Frequently Asked Withholding Questions,2 oehtt://ww.oregon.gov/ DOR/BUS/faq-withhold.shbnb, for example, clealy

    3 states, "8. How does Oregon treat withholdig on tip income? Tips paid by4 the customer to the employee are not subject to withholding ta. Tips paid by the5 customer to the employer who then distrbutes them to the employees are subjec to6 witholding." "Wages" are defined identically in the unemployment benefits statute7 (ORS 657.105), and the Oregon Court of Appeals has affrmed the Employment8 Appeals Board's finding that, as stated in the Oregon Administrtive Rules, "Gift,9 tips, or other gratuities received by an employee during the course of his employment

    10 from persons other than his employer are not wages." Callahan v. Employment Div.,11 80 Or. App. 401, 403, 722 P.2d 1275,1276 review denied, 302 Or. 158,727 P.2d 12812 (1986). All of the tips in this case were paid directly by the customers to the13 employees-cah only, no credit cards allowed, and the tips are never touched (or14 even counted) by STARUCKS or its managers. Oregon withholding tax should15 therefore not have been taken out. The deduction of Oregon income taes based on16 employees' tips (both "imputed" and otherwse) is therefore ilegal under Oregon law.17 11.18 STARUCKS hides those tip-based deductions in the employees' pay stubs, so19 that they won't know what is being deducted or why. Oregon law requires employers20 to issue pay stubs to their employees every pay period that are "suffciently itemized21 to show the amount and purpose of the deductions made." ORS 652.610(1).22 STARBUCKS does not do that. STARUCKS's own internal records do itemize the23 employees' deductons, identifyng which deductions are wage-based deductions and

    Page 6 - CLASS ACTION COMPLANTJON M. EGAN. p240 SIX11 STREELAKE OSWEGO OR 97034-293 J

    1lLEPHONE:(S03) 697-3427 . FAX: (866)311-5629lNEGANLEGALlEAM.CO EXHIBIT 1

    Page 7 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 7 of 70 Page ID#: 18

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    7/51

    1 which are tip-based deductions. For example, in STARUCKS's internal records

    2 obtained by Plaintiffs' counsel, the following deductions are listed for Hannah3 Fredckson's July 25, 2008 paycheck:4 Total Tax EE: 98.50FED FederalW/HEE:OASDIEE:MedcarEE:T:W/HEE:T:OASDEET:MedcEE:OR OregonW/HEE:WORCOMP:T:W/HEE:

    34.9226.836.273.921.620.3821.820.742.00

    11 STARBUCKS's internal records separately list the taes on wages and the taes on12 imputed tips, so they can tell which is which. Oregon income ta withholding for13 wages, for example, is marked "W /H EE," while the Oregon income ta withheld for

    56789

    10

    14 tips is marked "T:W/H EE". The "T" stands for "tips." On the employees' pay stubs,15 however, the deductions for wages and the deductions for tips are not separately16 identified. They are combined with each other and mixed together. For example, in17 the pay stub that was given to Hannah Fredrickson with that same July 25, 200818 paycheck, the following are listed as her deductons:

    2021

    TX Withholding T-TX EE Social Sec-TX Withholding T-TX EE Medicare T-TX EE Worker Com-

    19 38.8428.4523.826.650.7422 There are two entres on the pay stub that both read "TX Withholding T -", and both23 of them combine both wage taes and imputed tip taes. We know that the first one is

    Page 7 - CLASS AClION COMPLANTJON M. EVN. PC240 sixrn SlRTLAKE OSEGO. OR 97034.2931TELEPHON: (503) 697-3427. FAX: (866)311-5629

    INPO(EGANLEGALTBAM.CO EXHIBIT 1Page 8 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 8 of 70 Page ID#: 19

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    8/51

    1 for federal income ta deduction and the second one is for Oregon income ta2 deduction, but we only know that because we already have ST ARUCKS's internal

    3 document to figure it out from. The Oregon income ta is sandwiched between the4 federal Social Security and federal Medicare deductions (both of which alo combine

    5 both wage taes and imputed tip taes). It is impossible for any employee to figure6 out from their pay stub what taxes are taken out for what amounts, since the

    7 deductions are all jumbled up and combined with each other. These pay stubs8 therefore were not "suffciently itemized to show the amount and purpose of the

    9 deductions made."1011 Federal Income Tax Deduction Claims12 12.13 STARUCKS is only required to withhold federal income taes on tip amounts14 that its employees report in wrting that they have specifically received. "An employer15 is required to collect employee ta on tips which constitute wages only in respect of16 those tips which are reported by the employee to the employer in a wrtten statement17 furnished to the employer pursuant to section 6053(a)." 26 CFR 3L.3402(k)-I(a)(2).18 See IRS Chief Counsel Advice 200929004, 7/17/09 (holding that when employees19 distrbute tip jar tips amongst themselves, any unreported tips are not subject to the

    20 employer share of FICA ta unless and until the IRS makes a notice and demand for21 the taes from the company). For an employer to deduct taes based on a tip22 statement, it "must be signed by the employee and must disclose: (i) The name,23 address, and social security number of the employee. (ii) The name and address of

    Page 8 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SIXLL SlREETLAKE OSWEGO. OR 97034-29311lLEPHONE: (503) 697.3421. fAX: (866) 311-5629

    lNFO(EGANLEGAI.TEAM.CO EXHIBIT 1Page 9 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 9 of 70 Page ID#: 20

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    9/51

    1 the employer. (iii) The period for which, and the date on which, the statement is2 . furnished. !fthe statement is for a period ofless than 1 calendar month, the

    3 beginning and ending dates of the period must be included (for example, Januaiy 14 through January 8,1998). (iv) The total amount of tips received by the employee5 during the period covered by the statement which are required to be reported to the6 employer (see paragraph (a) of this section)." 26 CFR 31.6053-1(b)(1). But7 STARUCKS did not base its federal income ta withholding on any statutorily valid8 tip statements. Plaintiffs never signed any paper tip statements at all. Before filing

    9 this lawsuit, Plaintiffs requested 26 CFR 31.6053-1(d)(4) hard copies of any and all

    10 tip statements that STARUCKS claims entitled or required it to withhold federal11 income taes from wages for tips they received and reported. No such tip statements12 were ever provided.13 13.14 Employers are allowed to use an electronic system for employees to report tips,15 but that system "must ensure that the information received is the information16 transmitted by the employee and must document all occasions of access that result in17 the transmission of a tip statement. In addition, the design and operation of the18 electronic system, including access procedures, must make it reaonably certin that19 the person accessing the system and transmittng the statement is the employee20 identified in the statement transmitted." 26 CFR 31.6053-1(d)(I). An employer21 cannot deduct income taes based on an electronic tip statement unless it provides22 the same information as a paper tip statement, and it must be signed by the23 employee. 26 CFR 31.6053-1(d)(2)-(3). "The electronic signature must identify the

    Page 9 - CLAS ACTION COMPLANTJON M. EGAN. PC240 S1X11 S1lETLAKE OSWEGO. OR 97034-2931TILEPHON: (503) 697-3427. FAX: (866) 311-56291N00EGALEGALlEAM.CO EXHIBIT 1Page 10 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 10 of 70 Page ID#: 21

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    10/51

    1 employee transmittng the electronic tip statement and must authenticate and verify2 the transmission. For this purpose, the terms authenticate and verif have the same

    3 meanings as they do when applied to a wrtten signature on a paper tip statement."4 26 CFR 3i.6053-1(d)(3) (italics in original). Plaintiffs never signed any electronic5 tip statements either.6 ~7 Before filing this lawsuit, Plaintiff requested 26 CFR 31.6053-1(d)(4) hard8 copies of any and all electronic tip statements that STARBUCKS claims entitled or

    9 required it to withhold federal income taes from wages for tips they received and

    10 reported. No such tip statements were ever provided.11 15.12 Because the employees did not report their tip amounts to STARUCKS, the13 "imputed" tip amounts on their paychecks ca only be phantom (made-up) amounts.

    14 There are only two legal reasons for an employer to report a phantom (made-up)15 amount of tips to the federal government for an employee- "allocated" tips (which16 are sometimes required) and "estimated" tips (which are never required).17 16.18 "Allocated" tips apply to large food and beverage establishments. Each19 STARBUCKS location is a large food and beverage establishment. Each large food20 and beverage establishment must keep track of its aggegate gross sales. If all of the21 tipped employees together report tips ofless than 8% of those aggegate gross sales,22 the owner must "allocate" a phantom (made-up) amount of tips to each employee to23 make up the difference. The reported tips, plus the allocated tips, must total at least

    Page 10 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SIXLL SlRETLAKEOSWI!. OR 97034-2931

    1lLEPHONE: (503) 697-3427 . fAX: (866) 31 i -5629INFO(lGANLEGALTEAM.COM EXHIBIT 1Page 11 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 11 of 70 Page ID#: 22

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    11/51

    1 8% of the establishment's aggegate gross sales. Employers are not allowed to2 withhold federal income taes or FICA taes from allocated tips. They simply report3 the allocated tips to the government, as "allocated tips" in Box 8 of the employee's W-4 2. Only tips specificaly reported to the employer by the employee are supposed to be

    S included with.the wages in box 1 of the W-2. 26 CFR 31.60S1-i(a)(I)(VI) ("In the6 cae of remuneration in the form of tips received by an employee in the course of his7 employment, the amounts required to be shown by paragraphs (3) and (S) of section8 6051(a) (see paragraph (a)(l)(i)(C) and (e) of this section) shall include only such tips

    9 as are reported by the employee to the employer in a wrtten statement furnished to10 the employer pursuant to section 6053(a)."). See also Instrctions for Box i on Forms11 W-2 and W-3 ("Include the following ... (3) Total tips reported by the employee to the12 employer (not allocated tips)."). If STARUCKS's "imputed" tips are "allocated" tips,13 it shouldn't be withholding taes from them.4 ~15 STARUCKS reported all of its imputed tips with the employees' wages in Box 1 of16 the employees' W-2S, not in Box 8 like it should have for allocated tips. Because17 STARBUCKS did not report any allocated tips for the Class members, the only way it18 is allowed to report a made-up amount of tips to the government is therefore through19 "estimated" tips. As discused in furter detail below, STARUCKS did not follow the20 proper procedures to report estimated tips for its employees. More importntly,21 STARUCKS is never required to withhold federal income or FICA taes based on22 estimated tip amounts, so that withholding is an ilegal deduction under Oregon23 wage-and-hour law.

    Page 11 - CLAS ACTION COMPLANTJON M. EGAN. PC240 SIX SlRTLAK OSWEGO. OR 97034-29311lLEPHON: (S03) 697.3427. FAX: (866) 311-S629

    INO(~EGALEGALTEAM.COM EXHIBIT 1Page 12 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 12 of 70 Page ID#: 23

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    12/51

    1 18.2 Under certin circumstances, an employer is allowed to estimate the amount of3 tips that its employees will report, and then withhold federal income taes based on

    4 those estimated tip amounts. 26 CFR 31.3402(h)(1)-1(b)(1) ("(A)n employer may,

    5 at his discretion, (withold the applicable ta) in respect of tips reported by an

    6 employee to the employer on an estimated basis.") (emphasis added). Again, the7 employer is never required to withhold federal income taes from estimated tips.8 ORS 652.610(3) prohibits any deductions except for amounts authorized by the9 employee in wrting or "required to do so by law" (emphasis added). Plaintiffs and

    10 the class members did not authorize the withholding of federal income taes for the11 tips that STARUCKS "imputed" to them, and STARBUCKS was never required by12 law to withhold those taes. These deductions for federal income taes are therefore13 ilegal under Oregon law.4 ~15 STARUCKS also didn't follow the required procedures to estimate tips, so its16 deductions from Plaintiffs' paychecks were not authoried by law, either. When17 estimating tips for purposes of withholding federal income taes, employers are only18 allowed to estimate the amount of tips each employee will report during a given19 calendar quarter. See 26 CFR 3L.3402(h)(1)-1(b)(1) ("(A)n employer may, at his20 discretion, (withhold the applicable ta) in respect of tips reported by an employee to21 the employer on an estimated basis.") (emphasis added). STARBUCKS specifically

    22 instrcts employees not to report any tips up to 50~ per hour, so it cannot in good23 faith estimate that those same employees will report those tips.

    Page 12 - CLASS ACTION COMPLANTJON M. EGAN. PC24 SlXll StREETLAKe osweGO. OR 97034-29311lU;PHONE: (503) 697-3427. FAX: (866) 311-5629

    . INfO(EGANLEGALlEAM.COM EXHIBIT 1Page 13 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 13 of 70 Page ID#: 24

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    13/51

    1 20.2 STARUCKS also always "imputed" the same amount of tips to each and every3 employee. It is supposed to estimate each employee's tip reportng separately. 264 CFR 31.3402(h)(1)-1(b ) (1)(i) ("In respect of each employee, make an estimate of the5 amount of tips that will be reported ... by the employee to the employer in a calendar6 quarter."). !f all affected employees share substntially the same circumstances and

    7 working conditions, an employer is allowed to use the same initial estimate for all of8 them, but that estimate is supposed to be individually revied for each employee after9 their first quarter of reported tips. 26 CFR 31.3402(h)1-1(b)(2)(ii) ("If the quarterly

    10 estimate of tips in respect to a partcular employee continues to differ substatially11 from the amount of tips reported by the employee, ... the employer shall make an12 appropriate adjustment of his estimate of the amount of tips that will be reported by13 the employee."). Plaintiff never reported any tips to STARBUCKS (per14 STARUCKS's own instrctions), so after each of their first quarters of work,15 STARUCKS should not have been "estimating" any tips for them whatsoever. Before16 this litigation was filed, Plaintiffs requested that STARBUCKS produce copies of any17 tip report that they ever submitted, as well as the factors upon which it relied in

    18 making its tip estimates and its reasons for believing that the estimates were19 reasonable. 26 CFR 31.3402(h)1-1(b)(2)(iii). ("The employer must be prepared,20 upon request ... to disclose the factors upon which he relied in making the estimate,21 and his reaons for believing that the estimate is reasonable.") STARBUCKS never22 produced any.23 III

    Page 13 - CLAS AClION COMPLANTJON M. EGAN. PC240 SIX11 SlRTLAKE OSWEG. OR 97034-29311lU;PlION: (503) 697-3427' FAX: (866) 311-5629l1lXGANLEGALlEAM.COM

    EXHIBIT 1Page 14 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 14 of 70 Page ID#: 25

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    14/51

    1 21.2 Tips ofless than $20 in a calendar month are not considered "wages" for federal

    3 income ta withholding. 26 CFR 3l.3401(a)(16)-I(b). That means that any employee

    4 working less than 40 hours in a given calendar month should not have federal income5 taes withheld from their paycheck for that month (at the rate of 50q: of "imputed"6 tips per hour, $20 in tips would equate to 40 hours for the month). "While $20 in

    7 tips per month is not very much, employees who start employment, leave8 employment, or take vacation or sick leave within a partcular month may well earn9 less than that." Fior D1talia, Inc. v. United States, 242 F.3d 844, 847 n.5 (9th Cir.

    10 2001). STARBUCKS withholds the same federa income taes from its employee'11 paychecks for "imputed" tips whether or not those employees actually receive $20 in12 tips in a given calendar month.1314 FICA Tax Deduction Claims15 22.16 As with federal income taes, STARUCKS is only required to withhold federal17 FICA taes on tip amounts that its employees report in wrting that they have18 specifically received. "An employer is required to collect employee ta on tips which19 constitute wages only in respect of those tips which are reported by the employee to20 the employer in a wrtten statement furnished to the employer pursuant to section21 6053(a)." 26 CFR 31.3102-3(a)(2). See IRS Chief Counsel Advice 200929004,22 7/17/09 (holding that when employees distrbute tip jar tips amongst themselves, any23 unreported tips are not subject to the employer share of FICA ta unles and unti the

    Page 14 - CLAS AClION COMPLANTJON M. EGAN. PC240 SIXTH STREE

    LAKE OSWEG. OR 97034.29311lUPIlONE: (503) 697-3427' FAX: (866) 3 i 1-5629l1QjEOANLEGALTEAM.COM EXHIBIT 1

    Page 15 of70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 15 of 70 Page ID#: 26

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    15/51

    1 IRS makes a notice and demand for the taes from the company). For an employer to2 deduct taes based on a tip statement, it "must be signed by the employee and must

    3 disclose: (i) The name, address, and social security number of the employee. (ii) The

    4 name and address of the employer. (iii) The period for which, and the date on which,5 the statement is furnished. If the statement is for a period ofless than 1 calendar6 month, the beginning and ending dates of the period must be included (for example,7 January 1 through January 8, 1998). (iv) The total amount of tips received by the8 employee during the period covered by the statement which are required to be9 reported to the employer (see paragraph (a) ofthis section)." 26 CFR 31.6053-

    10 1(b )(1). But ST ARUCKS did not base its FICA withholding on any statutorily valid11 tip statements. Plaintiffs never signed any paper tip statements at all. Before filing12 this lawsuit, Plaintiffs requested 26 CFR 31.6053-1(d)(4) hard copies of any and all13 tip statements that STARBUCKS claims entitled or required it to withhold federal14 FICA taes from wages for tips they received and reported. No such tip statements15 were ever provided.~ 23.17 Employers are alowed to use an electronic system for employees to report tips,18 but that system "must ensure that the information received is the information19 trsmitted by the employee and must document all occaions of access that result in20 the transmission of a tip statement. In addition, the design and operation of the21 electronic system, including access procedures, must make it reaonably certin that22 the person accessing the system and transmittng the statement is the employee23 identified in the statement trnsmitted." 26 CFR 31.6053-1(d)(i). An employer

    Page 15 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SIXLL S1REELAKE OSWEGO, OR 91034-2931TEU!HONE: (503) 697-3427. FAX: (866) 311-5629

    lNo&EGAN LEGALTEAM.COMEXHIBIT 1Page 16 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 16 of 70 Page ID#: 27

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    16/51

    1 cannot deduct FICA taxes based on an electronic tip statement unless it provides the2 same information as a paper tip statement, and it must be signed by the employee.3 26 CFR 3l.6053-1(d)(2)-(3). "The electronic signature must identify the employee4 transmittng the electronic tip statement and must authenticate and verify the5 transmission. For this purpose, the terms authenticate and verif have the same6 meanings as they do when applied to a wrtten signature on a paper tip statement."7 26 CFR 3l.6053-1(d)(3) (italics in original). Plaintiffs never signed any electronic8 tip statements either.9 ~10 Before filing this lawsuit, Plaintiffs requested 26 CFR 3i.6053-1(d)(4) hard11 copies of any and all electronic tip statements that STARUCKS claims entitled or

    12 required it to withhold FICA taes from wages for tips they received and reported. No13 such tip statements were ever provided.~ 25.15 As with federal income ta, an employer is allowed under certin circumstances to16 estimate the amount of tips that its employees will report, and then withhold FICA17 taes based on those estimated tip amounts. See 26 CFR 3L.3102-3(C)(1) ("(A)n

    18 employer may, at his discretion, (withhold the applicable ta) in respect of tips19 reported by an employee to the employer on an estimated basis.") (emphasis added).20 Again, the employer is never required to withhold FICA taes frm estimated tips.21 ORS 652.610(3) prohibits any deductions except for amounts authorized by the22 employee in wrting or "required to do so by law" (emphasis added). Plaintiffs and23 the class members did not authorize the withholding of FICA taes from the tips that

    Page 16 - CLASS ACTON COMPLANTJON M. EGAN. PC240 SIXll S11EELAKE OSWEGO. OR 97034-2931

    lELEPHON:(503) 697-3427 . FAX: (866) 31 1.5629IN~EGANLEGALTEAM.COM EXHIBIT 1

    Page 17 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 17 of 70 Page ID#: 28

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    17/51

    1 STARUCKS "imputed" to them, and STARBUCKS was never required by law to2 withhold those taes. These deductions for FICA taes are therefore ilegal under

    3 Oregon law.4 ~5 STARUCKS also didn't follow the required procedures to estimate tips, so its6 deductions from Plaintiff' paychecks were not authoried by law, either. When

    7 estimating tips for purposes of witholding FICA taes, employers are only allowed to8 estimate the amount of tips each employee will report during a given calendar9 quarter. See 26 CFR 31.3102-3(c)(I) ("(A)n employer may, at his discretion,

    10 (withhold the applicable ta) in respect of tips reported by an employee to the11 employer on an estimated basis.") (emphasis added). STARBUCKS specifically12 instrcts employees not to report any tips up to 50~ per hour, so it cannot in good

    13 faith estimate that those same employees will report those tips.14 27.15 STARUCKS also always "imputed" the same amount of tips to each and every16 employee. It is supposed to estimate each employee's tip reportng separately. 2617 CFR 3L.3102-3(c)(1)(i) ("In respect of each employee, make an estimate of the18 amount of tips that will be reported ... by the employee to the employer in a calendar19 quarter."). If all affected employee share substantially the same circumstances and20 working conditions, an employer is allowed to use the same initial estimate for all of21 them, but that estimate is supposed to be individually revied for each employee after22 their first quarter of reported tips. 26 CFR 31.3102-3(c)(2)(ii) ("!fthe quarerly23 estimate of tips in respect to a partcular employee continues to differ substantially

    Page 17 - CLASS ACTION COMPLANTON M. EGAN. PC240 SIXTH SlRLAKE OSWEGO. OR 97034-293 i

    TEUlPHON:(S03)697-3427 . AX: (866) 311-5629INPOCdlEGAIlUlGALTEAM.CO EXHIBIT 1

    Page 18 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 18 of 70 Page ID#: 29

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    18/51

    1 from the amount of tips reported by the employee, ... the employer shall make an2 appropriate adjustment of his estimate of the amount of tips that will be reported by3 the employee. "). Plaintiff never reported any tips to STARBUCKS (per4 STARUCKS's own instrctions), so after each of their first quarters of work,S STARBUCKS should not have been "estimating" any tips for them whatsoever. Before6 this litigation was filed, Plaintiffs requested that STARUCKS produce copies of any7 tip report that they ever submitted, as well as the factors upon which it relied in

    8 making its tip estimates and its reasons for believing that the estimates were9 reasonable. 26 CFR 3L.3102-3(C)(2)(iii). ("The employer must be prepared, upon

    10 request ... to disclose the factors upon which he relied in making the estimate, and his11 reasons for believing that the estimate is reasonable." STARBUCKS never produced12 any.13 28.14 Tips ofless than $20 in a calendar month are not considered "wages" for FICA15 withholding. 26 CFR 31.3121(a)(12)-I(b). That means that any employee working

    16 less than 40 hours in a given calendar month should not have FICA taes withheld17 from their paycheck for that month (at the rate of soc of "imputed" tips per hour,18 $20 in tips would equate to 40 hours for the month). "While $20 in tips per month is19 not very much, employees who start employment, leave employment, or take20 vacation or sick leave within a partcular month may well earn less than that." Fior21 D'Italia, Inc. v. United States, 242 F.3d 844, 847 n.s (9th Cir. 2001). STARUCKS22 withholds the same FICA taes from its employees' paychecks for "imputed" tips23 whether or not those employees actually receive $20 in tips in a given calendar

    Page 18 - CLASS AClION COMPLANTJON M. EGAN, PC240 SIXLL SlRTLAKE OSWECi, OR 97034-2931TlHONE: (503) 697-3427. FAX: (866) 311-5629

    INFO(EGANLEGALTEAM.COM EXHIBIT 1Page 19 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 19 of 70 Page ID#: 30

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    19/51

    1 month.23 Potential Additional Violation (Information and Beliet)-4 Workers' Benefit Fund Deduction Claims5 29.6 The Workers' Benefit Fund is a program that provides various benefits to workers

    7 injured on the job in Oregon. The program is funded by an assessment that every8 employer and employee pays to the State of Oregon, based on the number of hours9 worked by that employee. The assessment rate is a number of cents for each hour

    10 worked by the employee, split evenly between the employee and the employer. Since11 2007, for example, the assessment rate has been 2.8~ per hour, with the employer12 paying 1.4~ per hour and the employee paying L.4(\ per hour.13 30.14 In the first two pay periods of Hannah Fredrickson's employment, she had too15 much money withheld from her paycheck for the Oregon Workers' Benefit Fund16 assessment. STARUCKS deducted Workers' Benefit Fud assessment from her17 check as if she had worked 80 hours more than she actually did in each of those two-18 week pay periods. She did not authorize that overdeduction, and STARBUCKS was19 not required to deduct it by law, so the deduction was ilegaL.20 3L21 The regular Workers' Benefit Fund amount is marked "WORCOMP" on22 STARUCKS's internal records, and the additional overdeduction amount is marked23 "T: WORCP". Because of the letter "T" in that code, the overdeducton may have

    Page 19 - CLASS ACTION COMPLANTJON M. EGAN. PC240 SIXLL SlRTlAE OSWEGO. OR 97034-293 J1lLEPHON: (S03) 697.3427 . FAX: (866) 3 JI.S629

    1N00alEGANLIGALJEAM.CO EXHIBIT 1Page 20 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 20 of 70 Page ID#: 31

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    20/51

    1 something to do with the tips imputed to Ms. Fredrickson. Al we know now is that2 STARUCKS set up its computer system to allow that to happen; we won't know3 whether it did the same thing to other Plaintiffs and class members until we have4 obtained furter discovery on this issue (though Plaintiffs believe it to be likely).56 Potential Additiona Violation (Information and Belief)-7 Unpaid Break Claims8 3~9 Oregon law requires employers to pay for aU breaks tht are shorter than 3010 minutes. Break shorter than 30 minutes are considered "rest periods," and they are

    11 counted as part of hours worked. A bona fide "meal period" is an uninterrpted

    12 period of 30 minutes or more, where an employee does no work and has time to eat a13 full meaL. Bona fide meal periods are not counted as part of hours worked.4 33.15 On at least nine occasions, Hannah Fredrickson took a break of less than 3016 minutes and was not paid for that time, totaling almost 2.5 unpaid hours. That is17 ilegaL. Again, all we know now is that STARUCKS set up its computer system to18 allow that to happen; we won't know whether it did the same thing to other Plaintiffs19 and class members until we have obtained furter discovery on this issue (though20 Plaintiff believe it to be likely).

    21 III22 III23 IIIPage 20 - CLAS ACTION COMPLAINT

    JON M. EGAN. PC240 SIX SlREETLAK OSWEGO. OR 97034-29311lLEHONE: (503) 697-3427. FAX: (866) 3\ 1-5629lNOfEGANLEOALTIAM.COM

    EXHIBIT 1Page 21 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 21 of 70 Page ID#: 32

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    21/51

    1 CLA ALLEGATIONS2 U3 As enumerated above, STARUCKS engaged in acts and practices that violated4 the Class members' rights under state wage and hour laws. The class that Plaintiffs5 seek to represent is all current and former Oregon employees of STARUCKS who6 reported or were imputed tips.

    78 NUEROSIT9 35.10 The Class is so numerous that joinder of all members is impractical. We estimate11 that the class will potentially include hundreds or even thousands of employees.12 STARUCKS's web site indicates that there are over 100 STARUCKS locations in13 Oregon.14

    15 COMMONALIT16 '36.17 There are questions of law and fact common to the Class, which predominate over18 any isues involving only individual class members. The principal questions include19 whether tips (imputed or not) are "wages" for purposes of Oregon withholding law,20 whether cah tips collected and distrbuted strctly according to an employer's wrtten21 policies but never handled or counted by the employer or its managers count as being22 given directly by a customer to an employee for purposes of Oregon withholding law,23 whether the deduction of Oregon income taes from employees' paychecks for tips is

    Page 21 - CLAS ACTION COMPLANTION M.EGAN. PC240 slXni S1REEl'LAKE OSWEGO. OR 97034.2931

    'TU!PHONE: (S03) 697.3427 . FAX: (866)311-5629INO(EGANLEOALTEAM.COMEXHIBIT 1Page 22 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 22 of 70 Page ID#: 33

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    22/51

    1 contrary to Oregon law, whether such deduction is willfl as that term is defined in2 Oregon law, whether the tips that STARB UCKS "imputes" to the employees are3 "allocated" tips or "estimated" tips, whether STARBUCKS violates ORS 652.610(1) by

    4 jumbling and combining wage and tip taes on the employees' pay stubs, whether5 STARUCKS and/or its individual locations meet the definition oflarge food and6 beverage establishment, whether STARUCKS follows the requirements to report7 estimated tips to the government for its employees, whether STARBUCKS is8 "required" to withhold federal income and FICA taes from the taxes it imputes to the

    9 employees, whether the deduction of an amount for taes that is under some10 circumstances allowed (but not required) by federallaw violates ORS 652.610(3) and11 (for all of the alleged violations) what remedies are available to the affected12 employees.1314 lYPICALI115 37.16 Plaintiffs' claims are tyical of those of the other Class members because:17 a. Plaintiffs are members of the Class.18 b. Plaintiffs' claims stem from the same practice or course of conduct that forms19 the basis for the Class claims.20 c. All of the Class members' claims are based on the same facts and legal theories.21 d. There is no antagonism between the interests of Plaintiffs and the Class22 members, because their claims are for damages provided to each Class member23 by statute.

    Page 22 - CLAS AClION COMPLANTJONM.EGAN.PC240 SIX1H S11ILAKE OSWEGO. OR 97034-29311lLEPHON: (503) 697-3427. FAX: (866) 311-5629

    lNPC(a)GANLEGALTEAM.CO EXHIBIT 1Page 23 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 23 of 70 Page ID#: 34

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    23/51

    1

    2345678

    9101112131415161718192021 III22 III23 III

    e. The injuries that Plaintiffs suffered are similar to the injuries that the Clasmembers suffered, and they are relatively small compared to the expense andburden of individual prosecutions of this litigation.

    f. The prosecution of separate actions by the Class members could either result ininconsistent adjudications establishing incompatible pay practices or, as apractical matter, dispose of the legal claims of Class members who are notpartes to such separate adjudications.

    ADEQUACY OF REPREENTATION BY PlANTIFFS38.

    Plaintiffs will fairly and adequately protect the interests of the Class because:a. There is no conflct between Plaintiffs' claims and those of the other Class

    members.b. Plaintiffs have retained counsel experienced in handling wage-and-hour class

    actions, who has already devoted substantial time and resources toinvestigating the Class members' claims and will vigorously prosecute thislitigation.

    c. Plaintiffs' claims are tyical of the claims of Class members in that their claimsstem from the same practice and course of conduct that forms the basis of theClass claims.

    Page 23 - CLASS ACTION COMPLANTIONM.EOAN.PC240 SIX'I STREELAK OSWEGO. OR 97034.293 J1lLEPHON: (503) 697.3427. FAX: (866) 31 1.5629l1lXGANLEGALTEAM.COM EXHIBIT 1Page 24 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 24 of 70 Page ID#: 35

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    24/51

    1 SUPERIORI OF CLAS METHOD2 39.3 A class action is superior to other available methods for the fair and effcient4 adjudication of the controversy, for at least the following reasons:5 a. The common questions of law and fact described in paragraph 36 predominate6 over questions affecting only individual members, and the questions affecting

    7 individuals primarily involve only caculations of individual damages;8 b. Individual Class members would have little interest in controllng the

    9 litigation due to the relatively small size of most claims and because the named10 Plaintiffs and their attorney will vigorously pursue the claims on behalf of the11 class members;12 c. No other similar litigation has been commenced, but if commenced, it can be

    13 coordinated under ORCP 32K;14 d. This is a desirable forum because STARUCKS operates many locations in this15 county and many class members reside here; and16 e. A class action will be an effcient method of adjudicating the claims of the

    17 Class member employees.1819 PRELmGATION NOTICE20 Long before this lawsuit was filed, Plaintiffs' counsel exchanged numerous21 documents and correspondence with STARUCKS's counseL. More than 30 days22 prior to their filing this lawsuit, Plaintiffs served the prelitigation notice attched23 hereto as Exhibit A (which includes the proofs of delivery). Plaintiffs' counsel and

    Page 24 - CLASS ACTION COMPLANTJON M. EGA, PC24 sixm SlRETLAKE OSWEGO. OR 97034-2931

    1lLEPHONE: (503) 697-3427 . FAX: (866) 311-5629INO(EGANLEGALTEAM.COM EXHIBIT 1

    Page 25 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 25 of 70 Page ID#: 36

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    25/51

    1 STARUCKS's counsel have exchanged correspondence and spoken via telephone2 regarding Plaintiffs' prelitigation notice, but STARBUCKS has not undertken the3 ORCP 321 safe harbor process of notification, compensation, correction, remedy and4 cessation. Exhibit A satifies any and all prelitigation notice requirements in this5 case, whether contained in ORS 652.150, ORS 652.200, ORCP 32H or otherwse.67 FIRST ClAM FOR RELIEF8 (Oregon Minimum Wage Claim)9 40.10 All previous paragraphs are incorporated by reference herein.11 ~12 Pursuant to ORS 653.025, ST AR UCKS was required to pay Plaintiff and the

    13 Class members at least the amount of the applicable Oregon minimum wage, when14 those wages were due, but willfully failed to do so.15 42.16 For such violation(s), Plaintiffs and the Class members are entitled to collect the17 difference between their wages received when due and the Oregon minimum wages18 due in an amount to be proven at trial, together with attorney fees and costs, as well19 as pre- and post-judgment interest and the 30 days of statutory penalty wages20 provided by ORS 653.055 and 652.150.

    21 III22 III23 IIIPage 25 - CLASS ACTION COMPLANT

    JON M. EGAN. PC240 SIXll SlRETLAKE OSWEGO. OR 97034-293 iTELEHON: (503) 697-3427. FAX: (866)3/1-5629INFOCGANLlGALlEAM.COEXHIBIT 1Page 26 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 26 of 70 Page ID#: 37

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    26/51

    1 SECOND CLAM FOR REUEF2 (Oregon Overtme Claim)3 ~.4 All previous paragraphs are incorprated by reference herein.5 #6 Pursuant to DRS 653.261, STARUCKS wa required to pay Plaintiffs and the7 Class members one and one half times their regular rate of pay for all hours worked8 in excess of 40 in a given workweek, when those wages were due, but willfully failed

    9 to do so.10 45.11 For such violation(s), Plaintiffs and the Class members are entitled to collect the12 difference between the wages received when due and the overtme wages due in an

    13 amount to be proven at tral, together with attorney fees and costs, as well as pre- and14 post-judgment interest and the 30 days of statutory penalty wages provided by ORS15 653.055 and 652.150.1617 THIRD CLA FOR REUEF18 (Oregon Unpaid Wages Upon Termination Claim)19 46.20 All previous paragraphs are incorporated by reference herein.~ ~22 Pursuant to ORS 652.140, STARUCKS was required to pay Plaintiffs and the23 Class members all wages due by the statutory deadline upon termination of their

    Pa~ 26 - C~S ACDON COMPVNTJON M. EGAN. p240SLXLL STREETLAKE OSWEGO. OR 97034.2931TlLBPHON: (503) 697.3427. FAX: (866) 311.5629

    lNP~BGANLEGAL TEAM.COM EXHIBIT 1Page 27 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 27 of 70 Page ID#: 38

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    27/51

    1 employment but willfully failed to do so.2 ~3 For such violation(s)~ Plaintiffs and the Class members are entitled to collect all

    4 wages remaining due, in an amount to be proven at tral together with attorney fees5 and costs, as well as pre- and post-judgment interest7 and the 30 days of statutory6 penalty wages provided by ORS 652.150 and ORS 652.200.

    78 FOURTH ClAM FOR RELIEF9 (Oregon Wrongfl Deductions Claim)10 49.11 Al previous paragrphs are incorporated by reference herein.12 50.13 Pursuant to ORS 652.610, STARUCKS was prohibited from deducting certin14 amounts from the paychecks of Plaintiff and the Class members but willfully did so.~ 5L16 For such violation(s), Plaintiffs and the Class members are entitled to the greater17 of $200 or actual damages in an amount to be proven at tral, together with attorney18 fees, costs and pre- and post-judgment interest7 pursuant to ORS 652.615.1920 FIFlH ClAM FOR RELIEF21 (Oregon Unpaid Wages Claim)22 52.23 All previous pargraphs are incorporated by reference herein.

    Pa~ 27 - CLASS ACTON COMPUUNTJON M. EGAN, p240 SLXLL SlRTI.AKE OSWEGO. OR 97034-293 i

    1'LEPHON:(503) 697-3427 . FAX (866) 311-56291N00GANLEGfoTEAM.COMEXHIBIT 1Page 28 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 28 of 70 Page ID#: 39

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    28/51

    1 53.2 Pursuant to ORS 652.120, STARUCKS wa required to pay Plaintiffs and the3 Class members all wages due, when those wages were due, but willfully failed to do4 so.5 ~6 For such violation(s), Plaintiffs and the Class members are entitled to collect the

    7 wages due (if any) in an amount to be proven at trial, together with attorney fees and8 costs, as well as pre- and post-judgment interest per ORS 652.200.

    910 PRAYER FOR RELIEF11 WHEREFORE, Plaintiffs request that the Court issue an order designating this12 action as a class action and appointing the undersigned counsel as counsel for the13 Class; issue a declaration that the Class members' rights under Oregon law have been14 violated by STARBUCKS's policies as specified above; enjoin STARBUCKS from15 deducting or withholding any Oregon income. taes from its Oregon employees'

    16 future paychecks for any tips whatsoever (whether "imputed" or otherwse); enjoin

    17 STARUCKS from deducting or withholding any federal income taes or federal18 FICA taes from its Oregon employees' future paychecks for "imputed" tips; award19 such damages as set fort above and in amounts to be proven at tral; award the20 attorney fees, costs and expenses of suit of Plaintiff and the other Class members;21 order STARUCKS to pay pre-judgment and post-judgment interest on all amounts22 due to Plaintiffs and the other Class members; and order such furter or alternatie23 relief as the Court deems appropriate.

    Page 28 - CLAS AClrON COMPLANTJO!' M. EGAN. PC240 SIX1 STREETLAKE OSWEGO. OR 97034-29311lLEPHOI: (503) 697-3427. FAX: (866)311-5629lNO(EGALEGALTEAM.CO

    EXHIBIT 1Page 29 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 29 of 70 Page ID#: 40

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    29/51

    1 JURY DEMD2 Plaintiffs hereby demand a tral by jury.

    34 DATED this 10th day of December, 20125 JON M. EGAN, P.C.6789

    1011121314151617181920212223

    Page 29 - CLAS AClION COMPLANTJON M. EGAN. p240 S1Xll SlRLAKE OSWEGO. OR 97034-2931l'LEPllONE: (503) 697.3427 . FAX: (866) 311-5629

    INf()EOANLEGALTEAM.COM EXHIBIT 1Page 30 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 30 of 70 Page ID#: 41

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    30/51

    Exhibit A to ComplaintFredrickson et al. v. Starbucks Corporation21 total pages in Exhibit A

    Pa2es Document1-8 November 6,2012 Prelitigation Notice9 November 6, 2012 fax cover sheet for same10 November 6, 2012 fax confirmation sheet for same11 November 6, 2012 cover email for same12 November 7, 2012 email read receipt for same1~ November 6, 2012 Certfied Mail Receipt ending 503614 November 7, 2012 US Post Offce Track & Confirm ending 503615 November 7, 2012 Return Receipt ending 503616 November 6, 2012 Certfied Mail Receipt ending 868517 November 7, 2012 US Post Offce Track & Confirm ending 868518 November 7, 2012 Return Receipt ending 868519 November 6,2012 Certified Mail Receipt ending 869220 November 8, 2012 US Post Offce Track & Confirm ending 869221 November 8, 2012 Return Receipt ending 8692

    JON M. EGAN. PC240 SIX1H STREETLAKE OSWEGO. OR 97034-29311lU!PHONE:(S03) 697-3427. FAX: (866) 311-S629

    INF0(EGANLEGALTEAM.COMEXHIBIT 1Page 31 of 70

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 31 of 70 Page ID#: 42

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    31/51

    .Jon M. Egan, PCAttorney at Law240 Sixt Stree

    Lake Osweo, OR 97034-2931telephone: (503) 697-3427facimile: (866) 311-5629Jeganteganlegalteam.comww.egnlegalteam.com

    November 6,2012Va Certified Frst-Class u.s. Mail, Return Receipt Requested

    Starbucks Corporationc/o Prentice-Hall Corporation System, Inc.Registered Agent285 Libert St. NESalem, OR 97301Receipt No. 7008 2810 0001 1032 8685Also faxed and emailed to:Christie TottenDavis Wright Tremaine, LLP1300 SW Fift Ave., Ste. 2400Portand, OR 97201Fax: (503) 778-5299ChritIetotten~dwt.comReceipt No. 7008 0150 0003 2549 S036Re: Hannah Fredrickson, Ashley Krening and Maurialee Bracke v. 8tarbucks Corporation

    ORS 652.150 Written Notice of Nonpayment, ORS 652.200 Written Notice ofaWage Claim, ORCP 32H Notice of Alleged Causes of Action and Demand forCorrection or Rectification of Aleged Wrongs, and Spoliation NoticeDear Ms. Totten and Starbucks Corporation:I write to give wrtten notice of non payment and written notice of a wage claim onbehalf of my clients (Hannah Fredrickson, Ashley Krening and Maurialee Bracke) andthe various respective class and subclass members who share their situation, and to giveORCP 32H notice of alleged causes of action and demand for correction or rectificationof alleged wrongs. In order to more fully elucidate the issues, this letter begins byaddressing the claims in Ms. Totten's May 23, 2012 letter (copy enclosed), after whichthe claimants' specific statutory allegations, damages and demands follow.First, Ms. Totten claims in her letter (without citing any basis) that Starbucks is"excepted" from the definition oflarge food and beverage establishments (and thereforethe requirement to allocate tips). I see no applicable exception in the statute orregulations. What is the basis for the claimed exception?Second, Ms. Totten did not address Oregon law and its prohibition against withholdingOregon taxes from tips. Oregon law does not allow any withholding from tips receiveddirecly from customers. ORS 316.162 defines wages for witholding purposes as"remuneration for servces performed by an employee for an employer." The language ofOAR 150-267.380(2) that was operative throughout my clients' employment clearlystates that, "Tips are not treated as Wages since they are not subject to withholdingunder ORS Chapter 316." And the Oregon Department of Revenue's Frequently Asked

    Starbucks Corporation2401 Utah Ave. S., Ste. 800MSS-LA1Seattle, WA 98134Receipt No. 7008 2810 0001 1032 8692

    Exibit APage 1 of 21

    Exhibit 1 - 32

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 32 of 70 Page ID#: 43

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    32/51

    Letter to Christie Totten and Starbucks CorporationNovember 6, 2012 Page20fs

    Withholding Questions, ~http: / Jww.oregon.gov/DORJBUSJfaq-withhold.shtmb,clearly states, "8. How does Oregon treat withholdig on tip income? Tips paidby the customer to the employee are not subject to withholding tax. Tips paid by thecustomer to the employer who then distributes them to the employees are subject towithholding.". All of the subject tips were paid directly by the customers to theemployees. Furter, "wages" are defined identically in the unemployment benefitsstatute (ORS 657.105), and the Oregon Court of Appeals has affrmed the EmploymentAppels Board's fiding that, as stated in the Oregon Administrtive Rules, "Gifts, tips,or other gratuities received by an employee during the course of his employment frompersons other than his employer are not wages." Callahan v. Employment Div., 80 Or.App. 401, 403, 722 P.2d 1275,1276 review denied, 302 Or. 158, 727 P.2d 128 (1986).The deduction of Oregon income taxes from the employees' tips (both "imputed" andotherwse) was therefore ilegal under Oregon law. ORS 652.610(3).Third, Ms. Totten attempted to classify Starbucks's "imputed" tips as "estimated" tipsunder 26 CFR 31.3402(h)(i)-I(b), not "allocated" tips. Nice tr.The fact that Starbucks reported employees' "imputed" tips in box 1 of their W-2S is notevidence of anyting except a(nother) violation offederal law. Only tips specificallyreported to the employer by the employee are supposed to be included with wages inbox 1 of the W-2. 26 CFR 31.6051-i(a)(1)(vi) ("In the cae of remuneration in the formof tips received by an employee in the course of his employment, the amounts requiredto be shown by paragraphs (3) and (5) of section 6051(a) (see paragraph (a)(I)(i)(C) and(e) of this section) shall include only such tips as are reported by the employee to theemployer in a wrtten statement furnished to the employer pursuant to section6053(a).''). See also Instructions for Forms W-2 and W-3 ("Include the following ... (3)Total tips reported by the employee to the employer (not allocated tips). ").Similarly, for purposes of withholding FICA and federal income taxes, employers areonly allowed to estimate the amount of tips each employee will report during a givencalendar quarter. See 26 CFR 3L.3102-3(c)(1), 31.3402(h)(i)-I(b)(i) ("(A)n employermay, at his discretion, (withhold the applicable tax) in respect of tips reported by anemployee to the employer on an estimated basis.") (emphasis added). Starbucks's policyspecifically instrcts employees not to report any tips up to 50C per hour, so it cannot ingood faith estimate that those same employees will report those tips.Moreover, Starbucks has "imputed" the same amount of tips to each and every employeethroughout the statute of limitations period, whereas it is supposed to estimate eachemployee's tip reporting separately. 26 CFR 3L.3i02-3(c)(I)(i), 31.3402(h)(i)-l(b)(l)(i) ("In respect of each employee, make an estimate of the amount of tips that willbe reported ... by the employee to the employer in a calendar quarer."). If all afectedemployees share substantially the same circumstances and working conditions, theemployer can use the same initial estimate for all of them, but that estimate is supposedto be revised after each employee's first quarter of reported tips. 26 CFR 31.3102-3(c)(2)(ii), 3i.3402(h)I-1(b)(2)(ii) ("If the quarterly estimate of tips inrespect to a partcular employee continues to differ substantially from the amount oftips reported by the employee, ... the employer shall make an appropriate adjustment ofhis estimate of the amount of tips that Will be reported by the employee."). My clientsnever reported any tips to Starbuks (per Starbucks's own instructions), so after theirfirst quarers, Starbucks should not have been "estimating" any tips for them

    Exibit APage 2 of 21Exhibit 1 ., 33

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 33 of 70 Page ID#: 44

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    33/51

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    34/51

    Letter to Christie Totten and Starbucks CorporationNovember 6, 2012 Page 4 oiS

    statement furnished to the employer pursuant to section 6053(a)." 26 CFR 31.3102-3(a)(2), 3L.3402(k)-I(a)(2). See IRS Chief Counsel Advice 200929004, 7/17/09(holding, in response to an inquiry alleging facts suspiciously identical to those in ourcae, that when employees distribute tip jar tips amongst themselves, any unreportedtips are not subject to the employer share of FICA tax unless and until the IRS makes anotice and demand for the taxes from the company). ORS 652.610(3) prohibits anydeductions except for amounts authorized by the employee in writing or "required to. doso by law" (emphasis added). My clients did not authorize the withholding oftaxes fromtheir "imputed" tips, and Starbucks was not required by law to. withhold those taxes.The deductions for FICA and federal income taxes are therefore ilegal under Oregonlaw.Please consider this letter my clients' ORS 652.1S0 wrtten notice of nonpayment andmy ORS 652.200 written notice of their wage claims and ORCP 32H notice of allegedcauses of action and demand of correction or rectification of alleged wrongs. Ms. Tottenrepresented Starbucks in Hannah Fredrickson's Unfair Labor Practice claim (Case No.36-CA-I080S), and she confirmed in her November 2, 2011 letter that her offce is actingas Starbucks's agent for purposes of receivig prelitigation notices and written requestsregarding wage-and-hour issues as well. In keeping with the requirements of ORCP32H(2), I have copied this letter to Starbucks's principal place of business and registeredagent as currently lited with Oregon's Secretary of State. Because the violations weresystem-wide, and to avoid any unnecessary disruption of Starbucks's business, I havenot sent this notice to the individual store managers or physical locations throughoutthe state. Please let me know immediately if Starbucks does not consider this letter tohave completely fulfied Plaintiff' prelitigation notice obligations under ORCP 32H; ifyou do so, I will immediately forward additional copies of this notice to variousadditional locations and individuals as necessary.DemandMy clients hereby demand that Starbucks immediately cease and desist withholdingand/or deducting amounts for federal taxes from its employees' paychecks based uponamounts of tips "imputed" to them, and immediately cease and desist withholdingand/or deducting amounts for Oregon taxes from its Oregon employees' paychecksbased upon tips of any kind (whether "imputed" to them or not).My clients furter hereby demand that Starbucks return to them and all other Starbucksemployees and ex-employees who had Oregon taxes withheld or deducted from theirpaychecks based upon tips for employment in Oregon at any time: all Oregon taxamounts deducted or withheld from their paychecks based upon tips, along with allapplicable prejudgment interest.My clients furter demand that Starbucks return to them and all other Starbucksemployees and ex-employees who had federal taxes withheld or deducted from theirpaychecks based upon amounts of tips "imputed" to them by Starbucks at any time: allfederal tax amounts deducted or withheld from their paychecks based upon amounts oftips "imputed" to them by Starbucks, along with all applicable prejudgment interest.Finally, my clients demand that Starbucks pay them and all other Starbucks employeesand ex-employees who had taxes withheld or deducted from their paychecks based upon

    Exibit APage 4 of 21Exhibit 1 - 35

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 35 of 70 Page ID#: 46

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    35/51

    Letter to Christie Totten and Starbucks CorporationNovember 6, 2012 Pages ofS

    tips (whether "imputed" to them by Starbucks or not) for employment in Oregon at anytime: statutory damages of $200.00 per paycheck for every pay period in which suchdeductions were made (ORS 652.615); 240 hours of penalty wages, at their final hourlypay rate, for each employee whom any such deduction droppe below the then-applicable Oregon minimum wage (ORS 653.055 and 652.150); 240 hours of penaltywages, at their final hourly pay rate, for each employee who experienced such adeducton in any week in which the employee worked more than 40 hours (ORS 653.055and 652.150); and 240 hours of penalty wages, at their final hourly pay rate, for eachemployee whose employment has terminated at any time after such a deduction (ORS652.150); along with all prejudgment interest applicable to each of these categories ofdamages.Please make all checks payable to "Jon M. Egan, PC IOLTA Account."Spoliation NoticeThis will also remind you of Starbucks's duty under state and federal law to immediatelyinstitute a litigation hold, preservng any and all evdence that may be relevant to thisaction in both physical and native electronic format. This includes, but is not limited to,for every employee in Oregon: all time sheets or other records of hours worked, allemployee handbooks and other policy documents, all records of pay and any amountsdeducted or withheld therefrom, all paper or electonic tip statements, and alldocuments forming the basis for Starbucks's "estimates" of the employees' tips, as wellas all internal or external memoranda or paper or electronic correspondence regardingany discussions, planning, communications, implementation or decision-makingprocesses involving the imputation of tips to Starbucks employees; and any and all otherdocuments or other evidence that is or may be relevant to this action. This duty extendsto all documents, data and tangible things in Starbucks's possession, custody or control,and any employees, agents, contractors, carriers, bailees or other nonparties whopossess such documents, data or tangible things.I look foiward to working with you to resolve this matter as justly, speedily andinexpensively as possible. If Starbucks would like to discuss resolution of this matterprior to my institutig litigation (or at any time thereafter), please let me know.Thank you.

    Sincerely,

    JME/mlEneL.

    Exibit APage S'Of21

    Exhibit 1 -36

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 36 of 70 Page ID#: 47

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    36/51

    1.11 Davis Wright. Tremaine LLPSuite 24001300 SW Fift AvenuePortland. OR 9nOI-5630Christie S. Tottci503-nS-5298 tel503. nS.5299 faxChrisreidWl.om

    May 23,2012

    Via Enu: Jegananlegalteam.comOriginal wnclosure via U.S. Mail

    JonM.EganJon M. Egan, PC240 Six S1.Lake Oswego, OR 97034Re: Hanah FredrcksoIlStabucksDear Mr. Egan:I wrte to follow up on your question regarding Imputed Tip Income on your client's pay records. As youknow, you asked me to explain the basis for Stabucks' use of a 50-cents-per-hour rate. When we spokeby telephone, you clarfied that you were trg to determne whether Stabucks was makng an unawfwitholding from tip income. When I fuer asked for the law upon which you relied, you sent mecitations to varous soures regardig witholdings from allocated tips.In fact, Stabucks does not allocate tips. (It is excepted from the definition of "large food and beverageestablishment" and therefore not required to fie Form 8027.) You can confirm this yourself by reviwing"Box 8" on your client's Form W-2. Because Starbucks doe not allocate tips, the varous sources youcite regarding alocations are irelevant.Allocting tips is a different concept than imputing tips. For your reference, I am attchig languge fromStabucks' Parer Resources Manua that more fully explains imput tips. Stabucks' practice ofimput-ing tips is wholly lawfl and appropriate. See e.g. 26 CFR 3L.3402(h)(1)-1(b). In addition to thatwitholding, of course, your client fuher had a legal obligation to accurately report her tips and payincome taxes on tips eared in excess of 50 cents per hour.

    DWT i 9415287v I 0024663-002Anchora

    BelllMLoAng I NGYorkPolaSlFnl8o I Set1leShnghaiWesinglon. D.C. ww.dwtcominO....ilG)Exibit APage 6 Of21

    Exhibit 1 -37

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 37 of 70 Page ID#: 48

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    37/51

    JonM.EganRe: Srbucks~redric~onMay 23, 2012Page 2

    I trst this infonnation addresses your concerns and clarfies that SIabucks' practice of imputing tips isproper. Pleae feel fr to contact me if you have additiona quesions or concerns.Sincerely,Davis Wright Tremaine LLP~~~hrstie S. TottenCST:ssEnclosurecc: Client

    OWT J94JSi87vl 0024663-OOZS02

    Exibit APage 7 Of2~Exhibit 1-38

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 38 of 70 Page ID#: 49

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    38/51

    Partner Resources Manual- U.S. Pay I

    UnderstandingImputed TipsFedera law requires that all U.S. parers who receive tips report tip income toStabucks. To assist parters in meetng their tip reportng responsbilites and helpensure they receive Socia Secunty and other benefits, to which they are entitled ontheir tips, Staucks imputes tip income at the rc of$0.50 per hour.Imputed TIps Policies Staucks estates that tipped parers receive at lea S0.50 per hour in tips andreport this amoun to the Internal Revenue Servce (IR) on the parters' behafThis relieves each parer of his or her responsibilty to report ths amoWlt. Parers

    ar only responsible for reportg tips if they eam more than $0.50 per hour in tipincome. The excess mus be reportd through the POS systm. The $0.50 per hour estma and reportd on behalf of parers is subject to thesae wiolding laws as reguareaed income (e.g., hourly wages). Itappea asa separte line ("Imputed Tip Income") under the Taxable Fringe Benefts secon

    of the paycheck stb. The "Report Tips" line breaks down tips report forilecurrnt pay period and the YT amount.Staucks only estimats and report $0.50 per hour in tips for hours worked whentips would normally be received by parers. Accordingly, all paid leave includingholiday, vacon, personal days, sick tie, juiy dut and bereavemen as well astime pad for fcilitating, trning or working events is excluded.New stores are exempt frm the imputd tips process for their first 12 weeks ofbusiness.

    Process for Excluding a Store from Imputed TIpsThis pro is in plac to exclude only those stores where parers averae less th$0.50 per hour in eared tips.1. The distct manager and stre manager detnnine the case oftl stre's

    lower than average hourly tip ra.2. If it is detennined that the stre has ben under the averae for four

    consecutive weeks, the DM must complete the Store Tip Exclusion Fonn,have it signed by his or her regonal directr and submit it to the Corp Taxdeparent, mailstop S- TAX, for approval. This form can be foun onStarbuclc Online;; Refereces & Tools;; Fonns ;; Parer Acton Forms3. Once aproved, the stre will be exempt from imput tips for the next 12

    weeks. At-the eighth week of exemption, the Corp Tax deparent willconta the DM to check on th sts of the stre's averae eamed tips. Ifthe stre's tip aveia has reached the $0.50 perhourminmwn, the strewil be set up to have tip income imputed afr the 12th week. Ifnot, theTax depaent will work with the DM to contiue the exemption.

    4. Store paers in the excluded stres must report any ac tips receivedvia the POS systm.

    4.9000204Exhibit A

    Page 8 of 21Exhibit 1 -49

    e 2009 Stucl Cofee Coany. AI ~hts ni. Prte in USA. 6/09

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 39 of 70 Page ID#: 50

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    39/51

    Jon M. Egan, PC240 Sixth Stree

    Lake Osweo, OR 97034-2931telephoe (503) 697-3427facsmile (866) 311-5629jegan(eganlegalteam.comww.egnlegalteam.com

    FACSIMILE TRANSM ITTAL

    Pages:

    Christie TottenDavis Wright Tremaine, LLP(503) 778-5299November 6, 2012Hannah Fredrickson et af. v. Starbucks CorprationORS 652.150 Written Notice of Nonpayment, ORS 652.200 WrittenNotice of a Wage Claim, ORCP 32H Notice of Alleged Causes ofAction and Demand for Correction or Rectification of Aleged

    Wrongs, and Spoliation Notice9 (including this page)

    Name:Organization:Fax:Date:Subject:

    Comments:

    Originals ~ wil D will not followVia Certified U.S. Mail, Return Receipt RequestedAlso sent via email

    Exhibit APage 9 of 21Exhibit 1 -40

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 40 of 70 Page ID#: 51

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    40/51

    ue ifv10n \0 IVI i- i- Las e rtor Report -= i iocnPage: 1 (Last Page)

    Loca i NameCompany Logo ..on M. Ega n. PC..on M. Egan. PCTOTa I Pages Scanned 9Tota I Pages Sent 9Transmission InformationRemo t eSt' a "t ion Star t Time5037785.299 11-06;19:38 Contents Resu I 'tDone

    The documents were sent.

    . Jon M. Egan, PC240 Sbd siLi o.wi", OR 87llM1Ill (601617-M7taml (ee) 311_0Jenieco_.~ii""

    FACSIM rI.E TRANSMITTALName:Oiiztion:Fax:Date:Subject:

    Pages:

    Chritle TottnDavi Writ Trmaie. IJ.P(s03) 77-5299Novembur 6. 2012Hannah Frdrckson et al. v. Starbucla CorpationORS 652..\0 Wrien Notice of Nonpament. ORS 652.200 WrittnNotice of a Wage Claim ORCP 32H Notice of Aleg Cause ofActon and Demand for Corron or Rectfication of AlegWrongi, and Spllation Noti9 (Incldi ti page)

    Comments:

    Originals i: will 0 wil not followVia Certed U.S. Mail, Return Recipt RequesedAlso sent via email

    Exibit APage 10 of 21Exhibit 1 -41

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 41 of 70 Page ID#: 52

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    41/51

    From:To:ec:Subjec:Date:Attchments:

    Michle LauzierChriste TottnJon M. EganFredrickson et al. v. Starbuck Corporaion / NoticeTuesay, November 06, 2012 6:58:28 PM12-11-06 JME Tottn (faxedl.pdf

    Re: Hannah Fredrickson, Ashley Krening and Maurialee Bracke v. StarbucksCorporation ORS 652.150 Written Notice of Nonpayment, ORS 652.200 Written Notice ofa Wage Claim, ORCP 32H Notice of Alleged Causes of Action and Demand for Correctionor Rectification of Alleged Wrongs, and Spoliation NoticeDear Ms. Totten:Please see attached correspondence from Mr. Egan, which was also sent to you todayby facsimile and Certfied u.s. Mail, Retun Receipt Requested.Thank you.Michle LauzierParalegalJon M. Egan, PC240 Sixth StreetLake Oswego, OR 97034-2931(503) 697-3427 tel.(866) 311-5629 faxww.eganlegalteam.com

    Exibit APage 11 of 21Exhibit 1 - 42

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 42 of 70 Page ID#: 53

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    42/51

    From:To:Subjec:Date:

    Totten, ChristeM Ichle LayzjerRead: Fredricksn et al. v. Starbuck Corporation I NoticeThursay, November 08, 2012 3:48:19 PM

    Your mesgeTo: Totten, ChrlsteSubject: Frericksn et al. v. Starbucks Corporation I NoticeSent: Tuesday, November 06, 2012 6:58: 17 PM (UTC-08:00) Pacic Time (US & canada)was red on Wednesay, November 07, 2012 10:08:51 AM (UTC-08:00) Padflc Time (US & canada).

    Exibit APage 12 of 21Exhibit 1 -43

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 43 of 70 Page ID#: 54

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    43/51

    : ..~ II-u. ~ ti (: '" l I If If lI Ii ii o. m S "i ll' l~ ~ I I i

    9EC5 6"52 ECOO 05~O ~OC

    0. 8..~.. .. QlQ) -ern'ill ...E lIolI~~c i- Clli:~iii- .giLL c:.!!;:~'g ... II .!.e.~ 860 ~~

    Exbit APage 13 of 21Exhibit 1 - 44

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 44 of 70 Page ID#: 55

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    44/51

    1118/12English Customer Service

    ilUSPS.COM.Quick Tools

    Track & ConfirmGET EMI L UPDATES PRINT OET~LS

    'rUR LABEL NUMBER700U(\1 $000032~)49::n36

    Check on Another ItemVYafs your label (or receipt) number?

    LmALA"ivacy Policy)Terms of Use )FOI )li FEAR Act EE Ita )

    ..: ,'Jpr~ ~ II it/\) ,.\.J :..' i. ~":i."': i\ II l.d~'ii,., !~I ,','.r ....":

    USPS MobileUSPS.com:- Track & Confirm

    Register I Sign In

    ShIp a ?ackage Send Mall

    SERVICE STAIS OF YOUR ITEM. First.aass Mai~ A"ocessed at USPS. Oriin Sort Facill

    : Dspatched to Sort: Facill; Acceptance

    Find

    ONUSPS.COMGovernrrnt Services)Buy Stal1s & Shop)A"int a Label with R:stage 1Custorrr Service )S~e Index)

    hltps:fltools.usps.comlgolTrackConfirmAction.acton

    Search USPS.com orTrack Packages

    Manage Your Mall Shop Buslnus SolutIons

    DATE & 'IME LOCA'I0N FEAlURESi flvelTr 07, 2012, 4:23 am : RJTlNQ OR 97208 expected Delivery By:

    . flvelTr 7, 2012

    . Certfied Mail'". Return leiptflvelTr 06,2012,3:33 pm LAKE OS, OR 97034flelTr 06, 2012, 3: 18 pm LAKE Clwa, OR 97034

    ON ABOUr.USPS.COMAbou! USPS H:rr ,Newsroom)Mlil Service Updates)Forms & Pubcalions ,Careers)

    OTHER USPS SITESBusiness Custorrr Gateway'Postal Inspectors )Inspector General,Postal Ex plore, ,

    Exibit APage 14 of 21Exhibit 1 -45 1/1

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 45 of 70 Page ID#: 56

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    45/51

    ..... L:rl" .",~~L. ......... .Ili~i .. ::i. ':~gll . l:' 8..:.... "I 15 . Q. ..:i' . 'll'" :: N::;.il !I:1 :', '. : Q iil:l:1 ~... . : , "; ~",''fl. :1: .,1 ti, ~" ; ~ ~ r-. .. .0. ,H "".. 0):r '.' .41 ..;~ c i- g

    :lllij":l :~iu.~;:'1' :'.:511:_' ..:t ~ ~ i'. .. ~1i1i6 . 'C S; 8 'S'jlil~l Gg~~..

    I.~'. lii 'Igl ..~,~,~:i . ff

    .....~url.~..:.. .~ . DO l. g! Ic; ~LM .!

    ....;-1cJ' ..1U

    II iI1 ~\' f

    Exhibit APage 15 of 21Exhibit 1 -46

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 46 of 70 Page ID#: 57

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    46/51

    USPaSvc

    CRFEDMALRCPT

    (DmecMaOnyNnaC

    aPod

    L i . IQ ru r c , , i i i i , i rusOli6lCIAL J

    P

    $3

    CiFe

    $9

    (Ec~$3

    (=~SOG

    TP6F$

    l66

    i i i ~SabCoao

    coPecaCpaoSemInRseeA

    2LbySN

    Sem,OR9

    m~c'fr~~;:0'9-.~0C'0II\r-

    ~..~

    -

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 47 of 70 Page ID#: 58

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    47/51

    111e112English Customer Service

    6JUSPS.COM.QuIck Tools

    Track & ConfirmGET EMAL UPDATES PRINT OET~LS

    YOUR lAEL NUMBER;0087.810000110321;685

    Check on Another ItemVlafs your label (or receipt) numbet?

    LALPracy R:lby )Terms of Use )FQl )li FEAR Act EE Data )

    , ;:.p-..i i:ili(f.' -'f i!.' i (~i~~. ,. i j..!;.!: il"', :;,.'.:., '1-., (". ~

    USPS MobileUSPS.CO~ - Track & Confirm

    Register I Sign In

    Ship a Package

    SERVice. Rrst-Oass Mlir&

    ONUSPS.COMGovernrrnt Servbes )Buy Starrs & Shop)A'int a Label w it R:slage ,Custorrr Service iS.e Index,

    https:llools.uspS.comlgofTrackConfirmAction.aclion

    Send Mall

    STATS OF YOUR ITEM

    . Celiered

    A'ocessed at lJOngin Sort FaclitOspalched to SortFaciitAcceptnce

    Rnd

    Search USPS.com or Track Packages

    Manage Your Mall Shop Builness Solutions

    DATE&nME LOCAnON FEAlURES, IIverrr 07, 2012, 11:46 am : SALe. OR 97301 . Expected Dellvery~:

    IIverrr 8, 2012certie Mlil '"Return Receipt

    N:verrr 07,2012,4:56 am SALBv OR 97301,

    N:errr 06, 2012, 3:33 pm ! LAKEOSO, OR 97034

    N:verrr 06, 2012, 3:18 pm LAKEOSO, OR 97034

    ON ABUT .USPS.COMAbout liPS I-rr iI\wsroomiMail Servbe Updates iForm & AJblications i03reers,

    OTH~ USPS SITESBusiness Custorrr Galeway )R:stallnspectors iInspetor GeneralR:stal Explorer,

    Exibit APage 17 of 21Exhibit 1 -48

    1/1

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 48 of 70 Page ID#: 59

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    48/51

    i1.I ic.....1 ..... ,iI-

    . - l l . ,.~ ,Ii ~:l ~I l ..' ~ . i:i:i ,; .:;I;~~ , l..jlq~;dl"'::II:J' ; ~:: ,"k~'!I1it .' ..~i:i: I i l" ~ c jP1:~- ..-...- ~ I:i.i.~, ~ _.fl!:~~$; . l 1-:i ji~i,l,lil. .. l g, ~"ln61 . l~.11'.1 Rui" ,1. l~~!l . 11.I~ ;!'l-', - ; ~ 1 ~; s; I i r . illl= l ~iil~ l'l ~. ii . . ., .g ~~ ~ l!". ri

    Exhibit APage 18 of 21Exhibit 1 -49

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 49 of 70 Page ID#: 60

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    49/51

    m-x~::Ot fro~_~.-0 ~0

    0"~ir-

    CJf\..

    o~10

    ru ir . E ru "cr r C c c c r" EO ruUSPaSvc

    CRFEDMALRCPT

    (DmcMOyNnaCaPod

    sLwCIAL

    Ps$3

    CiFe

    $9

    ReRIFe

    (ERe

    $3

    RlDeFe

    (EdmR

    TaiPa&i:rs

    $

    cOISabCoao

    ~~

    A5Se8________

    SeWA9

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 50 of 70 Page ID#: 61

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    50/51

    English Customer Service

    j;USPS.COM-Quick Tools

    Track & ConfirmGET EMIL UPDATES PRINT OET.lLS

    USPS Mobile

    Ship a Package Send Mill Manage Your Mall

    Register J Sign In

    Search USPS.com or Track Packages

    Shop Buiin... Solutloni

    STIUS OF 'fUR ITIM DATE & liME LOCAnON FEA RESDeliered : IIveri 08, 2012, 9: 11 am : SETTE, WA 98134 : Expected Delivery y;

    : N:errr 8,2012, Qrt~ied Mai'": Rern Receipt

    Processed at US N:errr 08, 2012, 2:59 am ; SEATTE, WA 98168Orgin Sort FacilDspatched 10 Sort f'verrr 06, 2012, 3:33 pm LAKE0S0,OR97034FacilitAcceptance N:errr 06, 2012, 3: 19 pm LAKE 0S0, OR 97034 !

    70082810000110328692'fUR LAEL NUMBER SERVICE

    First.Oass Mail

    Check on Another ItemWlafs your label (or receipt) number?

    LEGALPrivacy Policy)TerlT of Use ,FOIA ,li FER Acl ff Dela ,

    l.J'l,,,I~itii\r.; .i;i,'-' ~:.j:-~ ,\:i,"ili\. i'."~'.,ri' .(:!

    Find

    ONUSPS.COM ON ABUT.USPS.COMAbout US l-rr ,Nesroom,Mail service Upates iForms & P.blications )Gareers)

    Governrrnt services iBuy St"lS & Shop'Print a Label w rth R:stage )Custorrr service iSite Index i

    OTHER USPS SITESBusiness Cuslorrr Gateway'Postal Inspeclors iInspector General iPostal Explorer,

    Exibit APage 20 of 21Exhibit 1 -51

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 51 of 70 Page ID#: 62

  • 7/30/2019 Fredrickson v. Starbucks Corporation

    51/51

    .~~.Pnyan~hn

    8hWlCrohao

    .Ahhscohbohma

    oronthfrspp

    1AAo

    StarucksCorporation

    2UaASSe8

    MLA

    SeWA9

    .

    a

    ~e.Ma.'CElMa

    CR0RRpfo~

    onMa0CO.D

    4RiFCY"

    2ANhh_

    (lfr.nli71JIJa2ailJ.JJIIJ1:LIJ32861:2.,r'

    PF3Fb2~R_hJ_~1

    Case 3:13-cv-00029-HU Document 1-1 Filed 01/08/13 Page 52 of 70 Page ID#: 63