Legislative lowdown: Starbucks’s $39 million settlement highlights Fair Workweek compliance challenges

Starbucks recently agreed to settle a case with New York City’s Department of Consumer and Worker Protection (DCWP) over violations of the Fair Workweek Law.

The law requires fast-food employers to give workers regular schedules that stay the same each week, and offer them the ability to work more regular hours before hiring new employees. Employers are also prohibited from reducing workers’ hours by more than 15% without giving a just cause or fair business reason.

The DCWP found that Starbucks violated these aspects of the law.

Starbucks agreed to pay nearly $39 million to settle the case, according to a consent decree published on Dec. 1. Officials say the settlement, which will affect some 15,000 Starbucks retail employees, is the largest worker protection settlement in New York City’s history.

Background on the law. New York City’s Fair Workweek Law first took effect in 2017, with the goal of ending “unfair and inconsistent scheduling practices in the fast food and retail industry.”

It was part of a wave of legislation passed by policymakers in jurisdictions like Seattle and San Francisco between 2014 and 2017. Such laws sought to end unpredictable scheduling practices that can leave workers without a reliable income stream, struggling to manage responsibilities like childcare or education.

The DCWP investigated Starbucks from July 2021–2024, and in that time period found the coffee chain failed to provide regular schedules to some employees; cut some workers’ hours by more than 15% before obtaining their consent in writing; and assigned shifts to some new employees without first offering them to current ones.

A Starbucks employee told Gothamist Starbucks’s scheduling system made it hard for her colleagues to cover everyday expenses. “ I saw many people get second jobs. I remember how exhausted my coworkers looked to work second jobs—like the physical pain that you’re in all the time when you’re on your feet all the time,” said Kai Fritz, a barista who works at a location in Bensonhurst, Queens.

Compliance complexities. In a Dec. 1 statement, Starbucks said it supported “the intent of the law and remains committed to compliance,” but argued the complexity of the Fair Workweek law creates “real-world challenges.”

The coffee chain highlighted a $500 million investment it made to improve aspects of the employee experience, including upgrading scheduling tools and launching a “Shift Marketplace” to help workers get the hours they want.

Starbucks’s settlement comes as unionized workers are striking for issues including better staffing and higher pay at stores across the country.

This recent settlement may further inform how New York City-based employers in the food service and retail industries address staffing challenges. The DCWP had processed more than 990 Fair Workweek-related complaints as of March, and settled with another major fast food employer—Chipotle—back in 2022.