Starbucks to pay $35 million to New York City workers in settlement as strike continues, drawing Mamdani and Sanders to picket line

NEW YORK (AP) — Starbucks will pay about $35 million to more than 15,000 New York City workers to settle claims that it denied them stable schedules and arbitrarily reduced their hours, city officials announced Monday, hours before Mayor-elect Zahran Mamdani and U.S. Sen. Bernie Sanders visit striking baristas on a picket line.

The development came amid an ongoing strike by Starbucks’ union that began last month at dozens of locations across the country.

Read more: It’s one of Starbucks’ busiest days of the year, and workers have just gone on strike at 65 U.S. stores

Workers want better hours and more staff, and they are angry that Starbucks has not agreed to a contract nearly four years after workers voted to unionize at a Buffalo store. Union votes in other locations followed, and about 550 of Starbucks’ 10,000 stores are now unionized. The coffee giant also has about 7,000 licensed locations in airports, grocery stores and other locations.

Workers and the company question the scale and impact of the strike, but Mamdani, Sanders and some state and city officials sought to amplify the baristas’ message by mingling with dozens of strikers and supporters outside a Starbucks store in Brooklyn.

“These are not demands of greed — they are demands of morality,” Mamdani, a democratic socialist who ran on pledges to help the working class, told the crowd. Some workers carried giant models of Starbucks cups bearing the union’s logo instead of the coffee chain’s badge.

Four years after the store’s first union vote, “Starbucks refused to sit down and negotiate a fair contract,” said Sanders, a Vermont independent who supported Mamdani’s campaign.

Starbucks spokesman Jace Anderson said the company is “ready to talk when the union is ready to return to negotiations.” While the union picketed, Starbucks “focused on continuing to provide the best job in retail,” where more than 1 million applicants search for jobs annually, Anderson said in a statement.

Read more: Mamdani rallies voters in New York City with support from Bernie Sanders and AOC

“The facts speak for themselves,” she added.

Striking baristas described a troubled workplace plagued by chronic understaffing, online orders so complex that a ticket is sometimes longer than a cup, and last-minute calls for attendance.

“It’s the company’s problem to give us the labor volume to schedule associates fairly, and they don’t schedule us fairly, no matter how much money we make from them,” said Gabriel Pierre, 26, a shift supervisor at a store in the suburb of Bellmore.

Starbucks is trying to recover from a period of declining sales, with bloated American customers questioning whether its coffee blends are worth the money. The Seattle-based company recently reported the first increase in nearly two years in same-store sales — a term for sales at locations open at least a year — but restructuring costs, store redesigns and other changes dented profits in the July-September quarter.

Under the agreement announced Monday with New York City’s Department of Consumer and Labor Protection, Starbucks will pay $3.4 million in civil penalties, in addition to the $35 million it pays workers. The company also agreed to abide by the city’s Fair Workweek Ordinance going forward.

The company said it is committed to operating responsibly and complying with all applicable local laws and regulations everywhere it operates, but Starbucks also noted the complexities of the city ordinance.

“This is very difficult to manage,” Anderson said.

Most affected employees who held hourly jobs will receive $50 for each workweek from July 2021 through July 2024, the department said. Workers who were exposed to the violation after that may be eligible for compensation by filing a complaint with the department.

“I definitely hope this gives Starbucks an awakening,” said Kari Harsila, 21, a shift supervisor at a Brooklyn store who was staging a sit-in Monday.

The settlement also ensures that employees who were laid off during recent store closures in the city will get the opportunity to return to their positions at other Starbucks locations.

The city began the investigation in 2022 after receiving dozens of worker complaints against several Starbucks locations. The investigation eventually expanded to include hundreds of stores. The city said the investigation found, among other things, that most Starbucks employees were not given regular schedules, making it difficult for employees to plan for other commitments, such as child care, education or other jobs.

The company also denied workers the opportunity to work extra shifts, so they remained part-time even when they wanted to work more, according to the city.

Associated Press writer Bruce Shepkowski contributed from Toms River, New Jersey.