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Originally published Wednesday, December 24, 2008 at 12:00 AM

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Starbucks may shelve matching 401(k)s

Starbucks told employees it may not be able to match their contributions to 401(k) retirement accounts next year.

The Associated Press

NEW YORK — Starbucks told employees it may not be able to match their contributions to 401(k) retirement accounts next year.

The gourmet coffee chain said that, to keep costs down, it will switch from matching contributions at a fixed rate and will instead decide whether to match an employee's contributions.

The Seattle company now matches between 25 percent and 150 percent of the first 4 percent of workers' pay. The percentage depends on how long an employee has worked at the company.

Starbucks said if it does make a match next year, it may be at a different percentage than in 2008.

"This highly challenging environment requires us to become even more disciplined with how we manage costs across our entire organization," Starbucks said. "This includes looking closely at the benefits programs we make available to our partners."

The company has been attempting to cut costs and boost profits for months by closing nearly 600 underperforming stores in the U.S. and about 60 locations in Australia.

At an analyst conference earlier this month, Starbucks said it expects to save about $200 million to $210 million in costs in fiscal 2009 from initiatives already under way. The company added it had identified another estimated $200 million in savings that could come from cutting labor costs or streamlining distribution.

With the economy sinking further into a recession, a number of big companies have said they will suspend their 401(k) matches for employees. FedEx said last week it will eliminate its match beginning Feb. 1 for at least a year.

Motorola and Eastman Kodak have also both said they will temporarily suspend matches to employee-retirement plans.

Rules unfairly

imposed, judge says

NEW YORK — An administrative-law judge found Starbucks engaged in unfair labor practices at several of its New York coffee shops, the company said Tuesday.

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The ruling by Judge Mindy Landow, dated Friday, states that work rules were unfairly imposed on Starbucks' workers who supported a union that has been attempting to gain a foothold at the gourmet coffee retailer.

Starbucks spokeswoman Tara Darrow said the company plans to appeal the ruling.

The case began in March 2006 when the Industrial Workers of the World filed charges against the company alleging Starbucks interrogated employees, implemented new policies and disciplined or fired workers for supporting the union at four of its coffee shops in Manhattan.

Starbucks, meanwhile, said the workers were fired or disciplined because they violated the company's policies or threatened managers.

After several of those charges were settled in 2006, the union filed new charges that alleged the company unfairly barred employees from posting items related to the union on bulletin boards, wearing more than one pro-union button at a time and talking about the union while off-duty.

Friday's ruling dismisses several of the allegations, including several involving the company's dress code, while supporting others.

The ruling requires Starbucks to, within 14 days, give three former workers their jobs back and compensate them for any lost earnings.

The company must also post a notice telling workers it will allow them to discuss the union while off-duty, post materials related to the union and wear more than one pro-union button at a time.

The notice also informs workers they will not be fired for supporting the union.

Those requirements are pending appeal so it may be some time before they are instituted, if ever.

The Associated Press

Copyright © 2008 The Seattle Times Company

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