- by Ayden
A recent Starbucks lawsuit has caused much discussion on the coffee giant’s labor practices. Last year in January, Starbucks workers filed a lawsuit against the company after being hired to handle the store’s staffing needs. The workers were reportedly paid an hourly wage of just less than a dollar an hour, or about seven cents an hour. The company’s policy of paying its employees according to the cost of living also allegedly discriminated against employees because they were black or Hispanic. According to the workers, this practice violates the Fair Labor Standards Act and can result in them losing their jobs. In addition, the company allegedly made illegal deductions from their paychecks to cover for high costs such as full-time workers receiving training and benefits.
Now, these accusations have been addressed by the U.S. Department of Labor
. In a statement released on March 4th, the department stated that it had opened an investigation into the claims brought forth by the franchisee and his workers. This comes in response to reports that the company had indeed engaged in such practices. In a similar case last year, a Florida man was able to obtain damages due to what he considered to be discriminatory practices by the company.
There are several class-action lawsuits currently pending at present. Lawyers representing this case say that the company’s business model is outdated and they are not only facing discrimination issues but also predatory lending practices as well. Starbucks claims that all claims against it are unfounded and unjustified. This coffee giant says that it will contest any claims involving its coffee products. These actions follow months of damaging publicity, including the departure of CEO Howard Schultz.
The general consensus among many observers is that the company’s focus in the past decade has been on expanding its store chains, rather than looking to expand its product lineup.
Another reason cited for this focus is that it has been unable to gain a foothold in any of the international markets, it had hoped to conquer due to higher quality coffee brands currently available. This fact, coupled with the company’s troubled past, has deterred consumers from buying its products.
This leaves an opening for other coffee chains to take over the market share that Starbucks has lost. The company is, however, concerned about the effect these new competitors may have on its employees, who it says depend on them for their livelihoods. In addition to jeopardizing the company financially, there are also the implications of scaring away its current employees. It has warned its employees that they could face losing their jobs if they take part in any lawsuits or demonstrations against the company.
In response, lawyers for Starbucks claim that these allegations are false and have filed a lawsuit against the company. The company is also accusing its former employee Jonathan Budd of leaking information to the media. Both sides are scheduled to appear before a judge on December 8th. This case is expected to be one of the most important in recent memory concerning worker rights. If the lawsuit is lost, it is estimated that Starbucks will have to pay damages to its laid-off employees, which could amount to millions of dollars.
A recent Starbucks lawsuit has caused much discussion on the coffee giant’s labor practices. Last year in January, Starbucks workers filed a lawsuit against the company after being hired to handle the store’s staffing needs. The workers were reportedly paid an hourly wage of just less than a dollar an hour, or about seven cents…
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