Dive Brief:
- Starbucks has agreed to pay $38.9 million to resolve allegations by the New York City Department of Consumer and Worker Protection that the company violated the city’s Fair Workweek Law, according to a consent order.
- The DCWP said in a press release that Starbucks failed to provide employees with “stable and predictable schedules” or the ability to pick up shifts.
- The company will pay $35.5 million to more than 15,000 workers and $3.4 million in civil penalties, according to the press release. The city said the agreement was its largest-ever worker protection settlement with an employer.
Dive Insight:
The DCWP alleged that Starbucks’ practices across roughly 300 New York locations resulted in a cumulative 500,000 violations of the city’s Fair Workweek regulations. Starbucks did not immediately respond to a request for comment regarding the DCWP’s findings.
According to the DCWP, Starbucks workers “never received regular schedules, making it difficult for workers to plan other commitments, such as child care, education, or second jobs. Starbucks also routinely and unlawfully reduced employees’ hours by more than 15 percent.”
The city alleged that Starbucks barred some workers from taking on additional shifts, preventing some part-time employees from accruing enough hours to qualify as full-time workers.
The Fair Workweek rules in New York require fast food companies to provide regular schedules at least 14 days in advance; the opportunity for workers to pick up slack shifts before the company hires new employees; and the ability for laid off workers to transfer between locations. The law additionally bars QSR employers from firing workers without just cause or from reducing weekly hours by more than 15%.
Lynne Fox, international president of Workers United, the parent union of Starbucks Workers United, said in the DCWP press release that the settlement signaled the city government was working to hold Starbucks accountable.
“For too long, Starbucks has acted with impunity: manipulating schedules, disrespecting workers, and ignoring legal protections put into place by New Yorkers to protect working people from unfair business practices,” Fox said.
According to the press release, a majority of hourly workers at Starbucks in New York City will receive $50 for each week worked from July 4, 2021 through July 7, 2024, following an investigation that began in 2022.
Under Mayor Eric Adams and DCWP commissioner Vilda Vera Mayuga, the city has secured more than $90 million in worker relief through investigations by the DCWP since the start of Adams’ term in 2022. The majority of that money comes from just two settlements: Monday’s Starbucks agreement and a $20 million deal with Chipotle in 2022.
The consent agreement comes as Starbucks faces an ongoing strike by unionized baristas, which began in mid-November and has expanded, according to a union press release, from 65 stores to more than 120 stores across scores of cities.
The regulatory pressure from NYC on Starbucks may not be over: Mayor-elect Zohran Mamdani appeared on Monday at a union picket line at a Brooklyn Starbucks, SBWU said in a press release.
