Starbucks to pay $39 million in historic settlement over violation of NYC labor law
Photo by Anthony Fomin on Unsplash
Mayor Eric Adams and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga announced on Monday a $38.9 million settlement with Starbucks over violations of New York City’s law that guarantees fair working conditions. According to city officials, the resolution was the largest worker protection settlement in the city’s history. Starbucks agreed to the settlement after an investigation by DCWP showed the company had denied thousands of workers the legal right to stable schedules as well as the right to pick up additional hours, arbitrarily cutting schedules to prioritize their own bottom line over workers’ rights.
According to a statement from the mayor’s office, the settlement with Starbucks for rampant violation of the city’s Fair Workweek Law, implemented in 2017, is the largest worker protection settlement in city history. It comes after a multi-year investigation of the company by DCWP identified over half a million violations of the law since 2021.
The investigation was launched in 2022 after the DCWP received dozens of worker complaints from several Starbucks stores. DCWP found “a pattern of systemic violations” that led to the expansion of the investigation to Starbucks locations throughout the city.
“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,” said DCWP Commissioner Mayuga in a statement.
“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.”
The historic settlement requires Starbucks to pay more than $35.5 million in restitution to over 15,000 workers, as well as any additional workers who come forward, affected by the company’s unlawful practices. Starbucks will also be required to pay $3.4 million in civil penalties and costs.
New York City has long stood at the forefront in the area of progressive labor legislation, covering gaps in federal legislation and legislating rights that other cities do not.
“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,” Adams said in a statement.
“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.”
The settlement also honors claims related to layoffs after a number of New York City Starbucks stores closed. Under the law, laid-off employees have the right to be reinstated at other locations.
As per the agreement, employees who worked for Starbucks in an hourly position in New York City will receive $50 for each week worked from July 4, 2021, through July 7, 2024. Employees who experienced a violation after July 7, 2024, may be eligible for compensation, to be determined after filing a complaint with DCWP.
As the New York Times reports, Adams’ successor, Zohran Mamdani, has championed Starbucks workers during previous labor strikes. On Monday, the mayor-elect stood alongside Senator Bernie Sanders of Vermont in support of striking workers at a Brooklyn Starbucks, saying that he would back striking workers after he takes office.
Though the landmark settlement is a win for workers, Starbucks workers still face familiar challenges. Even after unionization efforts and the recent settlements, no Starbucks union (Starbucks Workers United (SWU)) store has a collective bargaining agreement. And a 2024 Supreme Court ruling made it harder for the National Labor Relations Board to force companies like Starbucks to reinstate workers who claim to have been fired for organizing, potentially making it easier for them to resist unionization efforts.
Kai Fritz, a barista at Starbucks, said in a statement Monday, “This settlement is a step in the right direction. It shows the power baristas have when we stand together and demand change. We are continuing to fight back against Starbucks’ greed and will not stop until we have a fair contract that ensures the support and protections we need to thrive.”
The Workers’ Bill of Rights is a comprehensive guide to workplace rights in New York City, providing a summary of the laws that protect workers, including employees, freelancers, workers classified as independent contractors, and job applicants in New York City, regardless of immigration status. For more information or to file a complaint, visit DCWP’s workers’ rights site or call 311 (212-NEW-YORK outside New York City). Complaints may be filed anonymously. It is illegal to retaliate against workers for filing complaints.
RELATED:
