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- Store managers at closing Starbucks locations could receive up to 26 weeks of severance.
- The coffee chain is closing about 1% of its corporate-owned US stores.
- Business Insider previously reported severance packages for baristas and shift supervisors.
Starbucks is offering a severance package to managers at stores that are closing, with some eligible for up to 26 weeks of severance pay.
The company detailed the severance package in a document, which Business Insider has viewed.
According to the document titled “Severance Summary,” shift managers are eligible to receive 120 hours of their hourly pay. Assistant store managers will get “240 hours + 40 hours for each year of completed service (up to combined total weeks of 1,040 hours),” the document states.
Coffeehouse leaders will receive at least six weeks of pay, plus additional amounts based on job level and years working for the company. For example, overtime exempt coffeehouse leaders will get eight weeks’ base severance, plus one week for every completed year of service, up to a maximum of 26 weeks.
Although there have been exceptions, retail workers generally do not receive severance payments because state and federal layoff rules largely focus on job sites with over 50 to 100 full-time employees.
Employment lawyer Walker Harman told Business Insider that Starbucks’ offer goes beyond the requirements he’s aware of, which he said was a “positive thing.”
Starbucks previously directed Business Insider to CEO Brian Niccol’s open letter from last week.
“We’re working hard to offer transfers to nearby locations where possible and will move quickly to help partners understand what opportunities might be available to them,” Niccol wrote in the letter. “For those we can’t immediately place, we’re focused on partner care, including comprehensive severance packages.”
Business Insider previously reported that severance pay for baristas and shift supervisors would be worth 60 and 84 hours of pay, respectively.
All employees in the agreement would also be allowed to remain on the company’s health plan until the end of October, and the company is providing funds for three additional months of coverage through the Department of Labor’s COBRA program.
The workforce cuts come as the Seattle-based coffee chain plans to close about 1% of its stores across North America, which amounts to more than 100 locations.
Harman, the employment attorney, said that many employers require employees to sign a release agreement in order to receive payment. Federally mandated benefits like COBRA cannot be withheld if an employee does not sign a release, he said.
Starbucks’ severance summary says employees will have 45 days to review and sign a release agreement in exchange for the severance.
The Starbucks severance summary also said that workers in most markets would be paid for their scheduled shifts for the week ending October 5, after which they would be eligible for severance.
Workers in some markets in California, Illinois, New York, and a few others would be paid through October 12.
Starbucks said in SEC filings that it expects to incur $1 billion in costs from its store closures. It said about $150 million of that cost would be linked to employee separation benefits.
Starbucks’ stock is down 12% over the last year.
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