NEW YORK (WABC) — Starbucks has settled a $38.9 million lawsuit brought by the New York City Department of Consumer and Worker Protection, the city announced Monday.
The lawsuit found that Starbucks repeatedly violated the law at more than 300 different locations by suddenly cutting workers’ hours and changing their schedules without notice.
The workers were also denied chances to pick up additional shifts.
Starbucks will pay more than $35.5 million in restitution to over 15,000 workers and will also pay more than $3 million in fines.
“This settlement is a step in the right direction. It shows the power baristas have when we stand together and demand change,” said Starbucks barista Kai Fritz. “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.”
Under the agreement, most 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.
The settlement also guarantees employees laid off during recent store closings in the city will get the chance for reinstatement at other company locations.
The Adams administration said it’s the largest worker protection settlement in the city’s history.
“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,” said Mayor Eric Adams. “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.”
Starbucks said in a statement that the New York City law is “notoriously challenging to manage and this isn’t just a Starbucks issue, nearly every retailer in the city faces these roadblocks.”
They said the violations are “about compliance” and “not about withholding wages or failing to pay partners.”
The city began investigating in 2022 after receiving dozens of worker complaints against several Starbucks locations, and eventually expanded its investigation to the hundreds of stores in the city. The probe found most Starbucks employees never got regular schedules and the company routinely reduced employees’ hours by more than 15%, making it difficult for staffers to know their regular weekly earnings and plan other commitments, such as child care, education or other jobs.
The company also routinely denied workers the chance to pick up extra shifts, leaving them involuntarily in part-time status, according to the city.
The agreement with New York comes as Starbucks’ union continues a nationwide strike at dozens of locations that began last month. The number of affected stores and the strike’s impact remain in dispute by the two sides.
(The Associated Press contributed to this report.)
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