New York City Secures Record $38.9 Million From Starbucks Over Scheduling Violations
NEW YORK — Starbucks has agreed to pay $38.9 million to settle a major labor law enforcement action by New York City, officials announced Monday. The settlement concludes a multi-year investigation that found the coffee chain committed over half a million violations of the city’s Fair Workweek Law at more than 300 locations. Mayor Eric Adams and the Department of Consumer and Worker Protection (DCWP) called it the largest worker protection settlement in the city’s history.
Under the agreement, more than 15,000 current and former hourly employees who worked from July 2021 through July 2024 will receive restitution. The company will pay over $35.5 million directly to these workers and an additional $3.4 million in civil penalties to the city. The announcement coincided with a high-profile visit by Mayor-elect Zohran Mamdani and U.S. Sen. Bernie Sanders to striking Starbucks workers in Brooklyn, highlighting ongoing national labor tensions.
Systemic Violations Uncovered
The DCWP launched its investigation in 2022 after receiving dozens of complaints from workers at several Starbucks locations. The probe expanded citywide, uncovering what officials describe as a pattern of "systemic violations".
Investigators found that a vast majority of Starbucks employees in the city never received a regular schedule, a core requirement of the Fair Workweek Law. The law mandates that fast-food employers provide predictable work schedules at least 14 days in advance. The city also determined that Starbucks routinely cut employees' hours by more than 15% without just cause and denied workers the first opportunity to pick up newly available shifts, keeping them involuntarily in part-time status.
"For too long, Starbucks has acted with impunity: manipulating schedules, disrespecting workers, and ignoring legal protections," said Lynne Fox, international president of Workers United, which represents many Starbucks employees.
Terms of Compensation and Corrective Action
The settlement provides a clear path to compensation for affected workers. Most eligible hourly employees will automatically receive $50 for each week they worked during the three-year period from July 4, 2021, to July 7, 2024. For a worker employed continuously for that span, the payout could amount to nearly $7,800. The DCWP stated that restitution checks will be mailed this winter.
Beyond financial penalties, the settlement requires Starbucks to comply with the Fair Workweek Law moving forward. It also guarantees reinstatement rights for employees laid off after recent store closures in the city. Workers who believe they experienced violations after July 2024 can file a new complaint with the DCWP for potential compensation.
"All workers deserve to be treated with dignity, and we are proud to stand up for our neighbors when a multibillion-dollar company... chooses to systematically violate their employees’ rights," said DCWP Commissioner Vilda Vera Mayuga.
Company Response and Broader Labor Context
In response to the settlement, Starbucks acknowledged the agreement while citing the complexity of New York City's scheduling regulations. A company spokeswoman stated the law is "notoriously challenging to manage" and noted that "this isn't just a Starbucks issue". In a blog post, the company framed the settlement as related to legal compliance, not unpaid wages.
The historic settlement unfolds against a backdrop of sustained labor organizing at Starbucks. Since 2021, workers at about 550 company-owned U.S. stores have voted to unionize with Starbucks Workers United. A central issue in negotiations has been the demand for consistent schedules and adequate staffing.
A nationwide unfair labor practice strike by unionized workers, now in its third week, was visibly supported by political figures on the same day as the settlement announcement. Workers like Brooklyn shift supervisor Kaari Harsila expressed cautious hope, stating, "I sure hope that it gives Starbucks an awakening".
The DCWP encourages workers with questions about the settlement or other workplace rights to contact 311 or visit the agency's website.
Key Takeaways
- Record-Breaking Settlement: Starbucks will pay $38.9 million to resolve over 500,000 violations of New York City's Fair Workweek Law, marking the city's largest-ever worker protection settlement.
- Widespread Impact: More than 15,000 current and former hourly workers across more than 300 city locations are eligible for restitution.
- Direct Compensation: Affected employees will receive $50 for each week worked between July 2021 and July 2024, with checks being mailed automatically this winter.
- Ongoing Enforcement: The settlement mandates future compliance with scheduling laws and provides a mechanism for workers to report violations after July 2024.
- National Labor Struggle: The announcement intensifies pressure on Starbucks amid a nationwide union strike and a protracted fight over fair contracts and working conditions.
