January 27, 2023

Starbucks bags of complimentary items in recognition of the Starbucks coffee shot, due to be available January 12, 2021 at the CollegeTowne location in Reading, Pennsylvania.

Ben Hasty | MediaNews Group | Read Eagle via Getty Images

Starbucks said Wednesday it had resolved allegations by the Equal Employment Opportunity Commission regarding alleged racial prejudice in employee promotion based on data from 2007-2011.

In a letter to employees, CEO Kevin Johnson said that Starbucks has no knowledge of what sparked the EEOC allegations and that the company’s analysis of its own data has not revealed any systematic discrimination in store-level promotions.

“Not only is the agreement right for partners, it has led us to focus more resources on structural changes needed to support the partners’ professional advancement and to ensure that each partner has the opportunity to learn about promotion opportunities to inform, “wrote Johnson.

The federal agency agreement was announced in Starbucks’ third annual civil rights assessment of the law firm Covington & Burling. The law firm said in the report that it is not representing Starbucks on the matter or is independently investigating the allegations.

A Starbucks spokesman said the company had an in-and-out dialogue with the EEOC before reaching an agreement earlier this year. The spokesman declined to comment on a fine, citing the confidentiality of the case.

To make the promotion process for cafe staff more formal and transparent, the company is developing an application tracking system that will display all retail job postings and include data tracking capabilities. Branch managers will no longer be able to promote employees outside of the formal promotion framework, and the company is introducing new training for managers involved in hiring decisions, including new interview guides.

The responsibilities of the Starbucks Inclusion and Diversity team are expanded to include monitoring of compliance and analytics and ensuring that diversity goals play a role in business decisions. The company also hired an independent labor economist to analyze data, set promotion goals, and track progress toward those goals.

The company first commissioned Covington & Burling’s civil rights review in 2019, months after police arrested two black men who had not yet ordered from a Philadelphia cafe. The backlash that emerged from the incident resulted in the company closing all of the sites it operates for a day of racial prejudice training and advocating a broader commitment.

Following the protests against Black Lives Matter that began in late May last year, Starbucks made additional commitments to advocate for racial justice and justice, including in its own workplace. It updated its “Third Place Policy”, including specific examples of unacceptable behavior such as hate speech or racial slur, and offered baristas de-escalation training. In October, Starbucks announced that it would tie executive compensation to new diversity goals. In early March, Starbucks promoted Dennis Brockman to Global Chief Inclusion and Diversity Officer.