The lawsuit alleges that Starbucks broke New York City law by disciplining and firing workers who called in sick.
Starbucks will pay tens of thousands of dollars to settle a New York City lawsuit alleging the coffee chain implemented “illegal” leave policies.
The New York Daily News reports that Starbucks will have to pay at least $150,000 to impacted workers. The settlement was announced in a joint statement Thursday by state Attorney General Leticia James and Mayor Bill de Blasio.
“In New York City, no corporation is above the law,” de Blasio said in a statement. “In partnership with Attorney General James, the Department of Consumer and Worker Protection found widespread violations of our Paid Safe and Sick Leave law, and thanks to their investigation, workers will now be able to enjoy the rights they are entitled to and get the restitution they are owed.”
Along with a general pay-out, Starbucks will give New York another $26,000—money that the city will distribute to 23 employees identified as part of an investigation into the chain’s sick-leave policies.
The investigation, notes the Reuters, found that Starbucks’ policies violated sick-leave ordinances by making ill employees find substitutes. Workers unable to secure replacements were subject to retaliation, including disciplinary write-ups and termination.
Starbucks will also hire a third-party claims administrator to identify and contact affected employees.
Along with having to pay a total of $176,000, all Starbucks stores in New York City will have to prominently display in-store educational posters clarifying the city’s sick-leave laws.
However, Starbucks maintains that, once investigators notified the company of its potentially illegal policies, it quickly moved to correct them.
“Once alerted to these claims made in 2016 by the New York City Department of Consumer Affairs, we clarified the policy in question shortly thereafter and ensured we were in full compliance,” said Starbucks spokesperson Reggie Borges.
Borges added that, as of last year, Starbucks has launched “a nationwide Partner and Family Sick time benefit. The company also provides “a competitive hourly wage” and are entitled to benefits such as health coverage, company stock, and a 401(k) savings match.
Lorelei Salas, the city’s Consumer and Worker Protection commissioner, voiced enthusiasm for the settlement’s outcome and Starbucks’ apparent compliance.
“It is frustrating that a major corporation like Starbucks, with over 8,000 employees in New York City, had an illegal sick leave policy to begin with,” Salas said. “But we appreciate that they corrected the policy, have agreed to compensate the employers [sic] who were negatively affected, and will be taking additional steps to help ensure all New Yorkers know about their rights.
“New York is committed to protecting workers and we want this case to be a message to all employers: no one is above the law,” Salas said.