Laws Affecting Mercedes and Starbucks

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Starbucks Coffee Company: Brief Summary

    Starbucks Coffee Company is a coffee house chain that has locations all over the world. It was opened in Seattle, Washington in 1971, by two teachers and a writer. Starbucks now has over 11,000 locations in the United States and more than 6,800 locations in 49 other countries. In addition to selling coffee, Starbucks sells pastries, sandwiches, coffee drinking accessories, and various media. Starbucks is headquartered in Seattle, owns five different subsidiaries, and has partnership agreements with both Apple and MSNBC (Starbucks Coffee). Starbucks Health Code Compliance

    The FDA Food Code is a federal law that regulates jurisdictions responsible for inspecting Starbucks (FDA). Because each state has slightly different rules, compliance with the health code differs for each Starbucks location. Each store is required to follow the rules for its respective county department of health and state board of health. Starbucks is regularly inspected by the county health code inspector and must pass that health test, which is later published publicly. Each new store has to apply for a permit from the state health board yearly (Jefferson County).   In order to comply with the health code, Starbucks must monitor many different aspects of its operations. Starbucks stores have many different machines that require electricity in a small space. This may cause a store to lose many points because the state requirements are very stringent. Managers must make sure each employee has clean clothes under their apron and has sanitized their hands before preparing food. Starbucks locations must pass an inspection four times a year in the state of Alabama. An inspection is graded on a 100 point scale, and anything above an 85 is considered a passing grade. If they make a score lower than 85, they must be retested within 60 days. If they do not pass the following test, they will have their permit suspended and have to go to trial for possible revocation. Health code inspectors have the authority to shut down an establishment whenever they see fit. Therefore, compliance is critical (Jefferson County). Contract Laws

The Uniform Commercial Code and the Statute of Frauds are federal laws which regulate specific contracts. However, each state has its own contract laws, which vary slightly. Starbucks contracts with coffee farmers, suppliers of ingredients, manufacturers of other Starbucks goods, and many more business entities. In addition, Starbucks contracts with different music artists. In October of 2009, singer/song-writer Carly Simon filed a lawsuit against Starbucks claiming that the company substantially eliminated sales of her new album when it shut down its music production label. She accused the company of tortuous interference with contract, and demanded $5 to $10 million dollars for her losses. Simon said she could have used a different record company to promote her album, but she chose the Starbucks label because it would distribute her work at its store locations. Starbucks claims that it fulfilled the contract’s obligations and promoted the album for the agreed-upon amount of time. Simon claims that the overall assumption when she signed her contract was that the Starbucks label would not cease operations. She claimed a substantial loss of sales because of her album’s absence from the shelves of Starbucks. The coffee company argues, however, that she can only sue its subsidiary company that owned the label, not the coffee roasting side of the business. The case has not yet been resolved. (Farley). Tip Sharing Laws

    The Fair Labor Standards Act (FLSA) prohibits tip sharing with employers (Jones). In 2004, a former Starbucks employee filed a lawsuit against the company stating that it was unfair for Starbucks to let supervisors partake in tips. This class action lawsuit was filed in California and represented over 100,000 employees, including persons who were no longer employed. The...
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