Starbucks Closing 250 Stores Amid DEI Settlement and Federal Labor Complaints
Starbucks announced this week it will close 250 locations across North America, its second major round of closures in under a year. The move comes as the company navigates significant legal pressures on two fronts: a freshly settled lawsuit over its diversity hiring practices and a federal labor complaint alleging the closures themselves are retaliation against union organizers.
A Second Major Wave of Closures
The 250 closures, scheduled for the week of September 24, follow a larger round last September in which Starbucks shuttered 627 stores across North America and Europe. Chief Operating Officer Mike Grams attributed the new closures to locations “where we do not believe we can consistently deliver the experience we want for customers and partners or where we don’t see a path to acceptable financial performance.” The company has not identified specific cities, states, or the breakdown between U.S. and Canadian locations.
The closures are part of CEO Brian Niccol’s ongoing turnaround effort since he took the helm in 2024. His restructuring push has included eliminating pickup-only stores, cutting 300 corporate employees in May 2026, and a planned retrofit of 1,500 locations by the end of Starbucks’ fiscal year on September 30. The strategy signals a shift toward fewer, higher-performing stores rather than expanding the chain’s footprint.
DEI Lawsuit Settled With Nationwide Consequences
Days before the closure announcement, Starbucks reached a settlement with the Florida Attorney General over a discrimination lawsuit filed in December 2025. Florida alleged the company had engaged in what it characterized as “reverse discrimination” by setting race- and sex-based hiring targets, tying executive compensation to the mentorship of employees from certain demographic groups, and maintaining diversity quotas that it argued disadvantaged other applicants.
Under the settlement terms, Starbucks will pay $1 million to Florida’s Department of Legal Affairs and eliminate all race- and sex-based goals, quotas, and preferences in its hiring, promotions, compensation, and board composition, with the changes applying nationwide. The company’s chief legal officer must submit annual compliance certifications for four years. Starbucks denied any wrongdoing. The agreement places Starbucks among the growing number of major corporations abandoning their DEI practices under legal and political pressure, a trend that has reshaped workforce policies across industries.
The Florida settlement is not Starbucks’ only recent legal exposure on employment matters. A New Jersey court issued a $25.6 million wrongful termination judgment against the company in a separate case, and a lawsuit by Missouri’s attorney general remains pending. Florida had initially sought penalties estimated in the tens of millions of dollars before the parties reached the $1 million agreement.
Union Files Federal Complaint Alleging Retaliation
Starbucks Workers United filed an unfair labor practice charge with the National Labor Relations Board this week, alleging that 16 of the closing stores were specifically targeted to undermine union organizing. The complaint identifies locations in Seattle, Los Angeles, Portland, Washington D.C., and Philadelphia, including at least three stores with active union affiliations or pending votes.
“Within the past six months the Employer closed and/or threatened to close at least 16 stores in order to discourage union activity, retaliate against workers engaged in union activity and/or escape its obligation to bargain with the Union,” the complaint states. Barista Cat Ureta described the situation for affected workers: “We are going into emergency bargaining over whether or not we’ll be able to even so much as stay at Starbucks.”
The NLRB complaint adds to an already complex legal record between Starbucks and organized labor. In June 2026, the NLRB found the company had violated labor law in connection with Pacific Northwest locations. An appeals court in September 2026 narrowed a separate federal anti-unionization case against the chain. Over 700 U.S. Starbucks locations have voted to unionize since late 2021, and no nationwide labor agreement has been reached. The company does not support unionization and has contested union efforts at each stage of the process.
What Comes Next for Workers and the Brand
For the baristas and staff at the 250 affected locations, Starbucks said it will transfer employees to other stores when possible or provide severance support for those who cannot be relocated. The company’s commitment offers some protection, but with specific closure locations not yet disclosed, many workers remain uncertain about what comes next.
Starbucks is not the only major retailer to face a DEI boycott as the legal and political climate around diversity programs has shifted. The NLRB investigation into the union’s retaliation complaint is ongoing, and no ruling has been issued. Starbucks has not publicly indicated whether it intends to appeal any pending labor board decisions. The combination of a DEI settlement with nationwide reach, an active federal labor complaint, and a second wave of mass closures represents an unusually crowded legal landscape for the brand as it attempts to execute its turnaround.
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