Mayor Eric Adams’ administration announced a major settlement in a case against Starbucks, which alleged that the company flagrantly violated the city’s Fair Workweek Law. Department of Consumer and Worker Protection (DCWP) investigators found that the coffee chain had committed more than half a million violations against its employees since 2021.
DCWP launched its investigation into Starbucks’ employment practices in 2022 after receiving dozens of complaints. Investigators say they found systemic violations at over 300 Starbucks locations across the city. In a press release, the city stated that “DCWP’s investigation found that most Starbucks employees in New York City never received regular schedules, making it difficult for workers to plan other commitments, such as child care, education, or second jobs. They also say Starbucks routinely and unlawfully reduced employees’ hours by more than 15 percent, making it difficult for employees to know how much money they would make week to week or whether they would earn enough to get by. Further, Starbucks denied workers the opportunity to pick up additional shifts, keeping them involuntarily in part-time work while continuing to hire new workers.”
Under New York City’s Fair Workweek Law, enacted in 2021 to protect fast food workers, employers must give employees their schedules at least 14 days in advance; they are not allowed to have on-call shifts or rely on last-minute cancellations; and are required to pay their employees more if they are subjecting them to schedule changes. Workers must have the opportunity to pick up any new work shifts before they are offered to newly hired staff, and employers can’t cut their workers’ hours or fire them without just cause. Retaliation against workers who exercise these rights is strictly banned.
The settlement requires Starbucks to pay $35.5 million in restitution to more than 15,000 workers. Hourly employees who worked between July 4, 2021, and July 7, 2024, will receive $50 for each week they worked, which means that someone employed continuously for 78 weeks will receive $3,900.
Workers who feel they were affected by a violation after July 7, 2024, could also qualify for compensation under the settlement. To apply, they can file a complaint online at www.nyc.gov/site/dca/workers/worker-rights.page or call 311.
Starbucks will also pay $3.4 million in civil penalties and costs, and it is mandated to comply with the Fair Workweek Law going forward. DCWP says it will monitor the coffee chain’s future employment practices, especially regarding employee layoffs and store closures.
“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 Adams. “This landmark settlement puts tens of millions of dollars back into the pockets of hard-working New Yorkers and reinforces the right to a reliable schedule, full hours, and basic dignity.”
DCWP Commissioner Vilda Vera Mayuga added, “All workers deserve to be treated with dignity. We are proud to stand up for our neighbors when a multibillion-dollar company like Starbucks chooses to systematically violate their employees’ rights.”
Lynne Fox, international president of the Workers United labor union, called the settlement “a major victory for thousands of Starbucks baristas,” saying the funds will help workers make ends meet this winter and that the fight for a fair contract continues.
This case is similar to a legal action New York City took against Chipotle Mexican Grill, which in 2022 was ordered to pay $20 million in restitution and $1 million in penalties for violating the same law. That settlement covered more than 13,000 workers at New York City locations from 2017 to 2022. The settlement agreement also specified that any hourly New York City Chipotle worker who worked between Nov. 26, 2017, and April 30, 2022, was eligible to receive $50 for each week worked. Chipotle was required to pay $1 million in civil penalties to the city.