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Avoiding a Class-Action Lawsuit: How Starbucks Lost $3 Million

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Keeping The Mobile Workforce In Motion Companies of all sizes face similar risks when it comes to providing fair (and defensible) mileage reimbursement to their employees. Understanding these risks is key to protecting your business against issues surrounding noncompliance, fraud, and potential litigation. To demonstrate the cost associated with an inaccurate mileage reimbursement program, consider the case of Starbucks Corporation. In 2007, the coffee chain was slapped with a class-action lawsuit filed by their employees. The Coffee Industry Isn't the Only One at Risk It's not just this specific case against Starbucks where companies have been slapped with lawsuits related to inaccurate mileage reimbursement. Other industries and retailers like Domino's, RadioShack, and Walgreen's have faced similar cases. These have all proven costly with the corporations paying out millions of dollars in settlements. Learn about the top 10 reimbursement lawsuits ▶ What Happened: Key Facts from The Case Store managers and supervisors working in California Starbucks locations between March 2003 – March 2008 had a similar experience when driving their personal vehicles for business purposes. The common denominator – the employees claimed that they were never reimbursed for this business mileage. The main plaintiff, Jonelle Lewis, first filed the lawsuit against Starbucks and resigned from her position there in March 2007. Lewis argued that she was never compensated for the expenses accrued when using her own vehicle to perform her job. These duties included making bank deposits, purchasing necessary supplies, and attending meetings. When Lewis requested compensation from her employer, the company told her there was no policy requiring them to do so. The plaintiff claimed she asked for reimbursement on several occasions and never received payment.

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