UPDATE 2-Chilean court upholds Starbucks labor practices fine

Mon Oct 8, 2012 6:15pm EDT

SANTIAGO Oct 8 (Reuters) - Chile's Supreme Court has upheld a fine of about $50,000 slapped on Starbucks Corp over its labor practices after unionized workers claimed the coffee shop chain threatened layoffs, benefit cuts and illegally replaced workers during a strike.

Last year, Starbucks was hit by its first strike at a company-owned store, with workers in Chile seeking pay that kept up with inflation, a $100 monthly lunch stipend, as well as other benefits.

"We hope the Chilean justice's punishment of Starbucks allows for a change of mentality," Andres Giordano, a Starbucks union president in Santiago, said in a statement on Monday.

The union represents less than 10 percent of Starbucks' workforce in Chile, the firm said.

Starbucks is seen as having some of the restaurant industry's best pay and benefits, which has helped it fend off union organization efforts in the United States, where the chain makes the vast majority of its sales.

"While we disagree with this latest ruling we respect the court's decision," Starbucks spokesman Jim Olson said. "We have always recognized and respected our partners' right to affiliate with a union and to voice their opinions."

Santiago's court of appeals had issued the fine.

In August, Chile's labor department blacklisted local units of Starbucks and retailer Wal-Mart Stores Inc over their labor practices, preventing them from bidding to supply local government offices for two years.

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