Starbucks has reached a historic $35 million settlement with New York City authorities following allegations of systematic violations of the city’s Fair Workweek Law. The agreement, announced Monday, resolves claims that the coffee giant denied predictable schedules and arbitrarily reduced hours for thousands of employees across its NYC locations.
More than 15,000 hourly workers will receive compensation of $50 for each week worked between July 2021 and July 2024, according to city officials. The settlement represents the largest worker protection agreement in New York City’s history, with investigators documenting over half a million violations of scheduling regulations.
New York City Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga stated the investigation revealed ‘a pattern of systemic violations’ across all Starbucks locations in the city. ‘All workers deserve to be treated with dignity,’ Mayuga emphasized, ‘and we are proud to stand up for our neighbors when a multibillion-dollar company chooses to systematically violate their employees’ rights.’
As part of the settlement, Starbucks must now comply with NYC’s worker protection laws requiring fast-food employers to provide regular schedules and opportunities for additional shifts. The company acknowledged the complexity of the city’s regulations while maintaining its commitment to compliance.
In a statement, Starbucks noted the compensation represents ‘legal compliance, not unpaid wages’ and reiterated its commitment to ‘creating the best job in retail.’ The company recently announced plans to invest $500 million in coffeehouse staffing and training improvements nationwide.
The settlement occurs amid ongoing labor tensions between Starbucks and unionized workers. Starbucks Workers United continues to organize strikes across more than 120 stores in 85 cities, demanding better pay, improved staffing levels, and formal union contracts. The union has won representation elections at approximately 5% of company-owned U.S. locations since its formation four years ago.
New York City Mayor Eric Adams characterized the agreement as a ‘landmark settlement’ that will ‘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.’
The resolution comes as Starbucks navigates multiple challenges including consumer boycotts, increased competition, pricing criticism, and leadership transitions. While the company reported its first quarterly sales growth in nearly two years this October, U.S. sales remained flat, indicating ongoing operational challenges.