NYC Settles $38.9M Worker Protection Lawsuit with Starbucks Baristas

Starbucks has agreed to a significant settlement of $38.9 million to resolve a lawsuit initiated by the New York City Department of Consumer and Worker Protection. Announced on Monday, this lawsuit highlighted multiple violations occurring across over 300 locations in the city.

Key Points of the Settlement

The lawsuit revealed that Starbucks frequently altered employee schedules without notice and reduced hours arbitrarily. Thousands of workers were also denied the opportunity to take on extra shifts.

• Starbucks will pay more than $35.5 million in restitution to over 15,000 employees.
• In addition, the company faces over $3 million in fines.
• Hourly employees will receive $50 for each week worked from July 4, 2021, through July 7, 2024.
• Laid-off employees during recent store closures will have a chance for reinstatement at other locations.

Mayor’s Statement on Workers’ Rights

This settlement marks the largest worker protection agreement in New York City’s history. Mayor Eric Adams emphasized that any business violating workers’ rights will face repercussions, regardless of its size or financial standing.

“With this landmark settlement, we’ll put tens of millions of dollars back into the pockets of hardworking New Yorkers,” Adams stated. He reiterated the city’s commitment to ensuring fair treatment, reliable schedules, and basic dignity for all employees.

Starbucks’ Position

In response, Starbucks characterized the city’s labor laws as “notoriously challenging” and argued that such compliance issues affect many retailers across New York City. They clarified that the violations identified pertain to compliance rather than an intent to withhold wages.

Investigation Timeline

The investigation, which began in 2022 after receiving numerous worker complaints, expanded to cover hundreds of Starbucks locations in the city. Findings indicated that many employees lacked regular schedules and experienced over 15% reductions in work hours, complicating personal planning for child care and education.

Continuing Labor Movement

This settlement arrives during an ongoing nationwide strike involving Starbucks’ union, which has seen actions at various locations since last month. The details regarding the number of affected stores and the overall impact of the strike are disputed between the company and union representatives.

The outcome of this case serves as a significant development within labor relations, highlighting the ongoing dialogues around workers’ rights and employer responsibilities in New York City.