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By Amanda Greenwood
Associate News Editor
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Starbucks has agreed to pay hourly workers at over 300 of its branches $35.5 million as part of a $38.9 million settlement, following a lawsuit that was filed by New York City Department of Consumer and Worker Protection (DCWP) over alleged violations pertaining to stable schedules for workers.
Starbucks said it was committed to complying with all local laws and regulations everywhere it does business, but it also added the New York City's law was “notoriously challenging to manage."
Why It Matters
The settlement over schedule issues and cut hours comes as Starbucks has been facing a strike that began in November at dozens of locations around the country. Workers are demanding, in part, better hours as well as more staffing.
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What To Know
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The $38.9 million settlement follows a multi-year investigation into Starbucks that uncovered more than half a million violations of New York City's Fair Workweek Law, impacting over 15,000 employees, the DCWP said.
Under the settlement agreement, Starbucks is to pay $35.5 million to the baristas and other hourly staff in New York City, along with $3.4 million in civil penalties and costs.
The DCWP investigation launched in 2022 found that Starbucks had failed to provide consistent schedules, illegally cut hours by more than 15 percent, and denied workers opportunities to pick up extra shifts—keeping many involuntarily part-time, according to the DCWP
As a result of the settlement, each eligible Starbucks employee—over 15,000 workers—are to receive around $50 for every week they worked between July 4, 2021, and July 7, 2024, said the DCWP.
What People Are Saying
The Fair Workweek Law states:
“Fast food employers in NYC:
- Must give workers regular schedules that stay the same week-to-week
- Must give workers work schedules 14 days in advance of the start of the schedule
- Must pay premiums for schedule changes or clopenings
- Must give workers a chance to say no to extra work or to clopenings
- Must give current workers the opportunity to work more regular hours before hiring new employees
- Cannot fire or reduce the hours of a worker by more than 15% without just cause or a legitimate business reason
- Must reinstate laid off employees by seniority when hours become available.”
Mayor Eric Adams said in a statement: “It does not matter how big your business is or how much money your company makes, if you violate our workers’ rights, you will pay the price. With this landmark settlement, we’ll put tens of millions of dollars back into the pockets of hard-working New Yorkers and reinforce every New Yorker’s right to a reliable schedule, full hours, and basic dignity. We’ll make sure that New York City remains a place where employees are treated fairly and working-class people can still get ahead.”
DCWP Commissioner Vilda Vera Mayuga said: “The city’s Fair Workweek Law provides workers with vital protections, like the right to a predictable schedule so workers can plan their lives and earn stable incomes, but Starbucks chose to ignore these rights and prioritize their own bottom line. All workers deserve to be treated with dignity, and we are proud to stand up for our neighbors when a multibillion-dollar company like Starbucks chooses to systematically violate their employees’ rights.”
Starbucks spokesperson Jaci Anderson told The Associated Press of the city's law: “This is notoriously challenging to manage.”
What Happens Next
The DCWP said it would continue to monitor Starbucks’ compliance and provide ways for workers to file complaints and seek further compensation if new violations have occurred after July 2024.
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