Starbucks Should End 'Deceptive' Advertising, Lawsuit Says

Starbucks is facing a lawsuit calling for the Superior Court of Washington D.C. to compel the company to end its supposed "unfair and deceptive" advertising that contends its beverages are ethically sourced.

On January 10, the National Consumers League (NCL), a non-profit advocacy group established in 1899, filed the class-action lawsuit against the coffee giant accusing it of "misrepresenting" its coffee and tea by claiming they were "100 percent ethically sourced."

Instead, the suit argues, Starbucks "sources coffee beans and tea leaves from cooperatives and arms that have committed documented, severe human rights and labor abuses, including the use of child labor and forced labor as well as rampant and egregious sexual harassment and assault."

The NCL alleges that Starbucks did so as it "knows there is significant and growing consumer demand for ethically sourced goods and services" that "command a premium price in the market." Other companies have faced accusations of unjust enrichment over similar marketing claims in recent class action lawsuits.

A Starbucks spokesperson told Newsweek it "plan[s] to aggressively defend against the asserted claims that Starbucks has misrepresented its ethical sourcing commitments to customers."

Newsweek also approached lawyers acting on behalf of Starbucks and the NCL via email for comment on Tuesday.

The lawsuit against Starbucks cites several examples of alleged unethical practices among its suppliers. In January, the Center for Research on Multinational Corporations issued a report that Cooxupé, a large Starbucks coffee supplier in Brazil, used farms that relied on child labor, had unsanitary conditions and withheld wages to pay for costs associated with the work.

Cooxupé did not respond to the report, but Starbucks said at the time it took the allegations "extremely seriously" and that its actions could include an investigation leading to an ending of the commercial relationship with the farms.

The lawsuit also cited a BBC investigation in February 2023 into James Finlay & Co. tea plantations in Kenya, which found evidence of sexual exploitation and prompted an inquiry by lawmakers. Starbucks told the broadcaster it was "deeply concerned" by the claims and had taken "immediate action" to suspend purchasing from the tea vendor.

According to Starbucks' current ethical sourcing policy, suppliers "must provide all their workers with a safe and healthy work environment," cannot employ anyone under the age of 15, and the company "will not tolerate the use of any forced or involuntary labor, either directly or indirectly, by our suppliers, contractors or subcontractors."

The Starbucks spokesperson said it is "actively engaged with farms to ensure they adhere to our standards."

On its website, the coffee maker says the "cornerstone of our ethical sourcing approach to buying coffee is Coffee and Farmer Equity (CAFE) practices."

But the lawsuit argued the company had "turned a blind eye" to the alleged violations, and "continued to point to so-called ethical 'certification' programs that are known to be unreliable," citing prior investigations that found use of child labor at CAFE-certified farms.

The NCL accused Starbucks of violations of the District of Columbia Consumer Protection Procedures Act and asked the court to bar it from advertising professing ethically sourced products "unless and unit it lives up to its ethical sourcing promises," as well as a corrective advertising campaign and damages.

On Monday, lawyers for Starbucks called for the lawsuit to be removed from the Washington D.C. court and put before the federal U.S. District Court for D.C. under the Class Action Fairness Act of 2005 owing to the company's residence in Washington state, not Washington D.C.

It also "disputes that any damages are appropriate in this case."

Update 2/14/24, 4:40 a.m. ET: This article was updated to include comment from a Starbucks spokesperson.