Starbucks Corp.’s newly departed chief executive officer, Howard Schultz, plans to tell Congress Wednesday that the coffee chain has bargained in good faith with the group that organized hundreds of its stores as the company defends itself against accusations of union busting.
(Bloomberg) — Starbucks Corp.’s newly departed chief executive officer, Howard Schultz, plans to tell Congress Wednesday that the coffee chain has bargained in good faith with the group that organized hundreds of its stores as the company defends itself against accusations of union busting.
“Starbucks respects the right of all partners to make their own decisions about union representation, and Starbucks is committed to engaging in good faith collective bargaining for each store that has a union,” the company’s three-time CEO plans to tell the US Senate’s Health, Education, Labor and Pensions committee Wednesday, according to a copy of his prepared remarks. “I embrace these commitments.”
But, Schultz will also tell the committee that the company prefers a “direct relationship” with employees rather than unionization, a stance he signals is unlikely to change under new CEO Laxman Narasimhan.
“Our board and our leadership are in complete agreement that a direct relationship with our partners, where we have the flexibility to implement improvements quickly in wages and benefits and share success in the future, as we have in the past, is the right path forward for Starbucks, our partners and all company stakeholders,” the billionaire ex-CEO plans to say.
Schultz agreed to testify before the committee this month after its chairman, Senator Bernie Sanders, scheduled a vote on a subpoena that would have forced the executive to appear. Schultz had been set to step down as CEO at the end of the month, but instead left his position two weeks early. He remains on the company’s board.
The union Workers United has prevailed in elections at around 300 of Starbucks’s roughly 9,000 corporate-owned US cafes over the previous sixteen months, spreading from an initial landmark victory in Buffalo, New York, to sites throughout the country. But none of the newly unionized cafes has come close to securing a collective bargaining agreement with the company, and the pace of new unionization petitions has slowed down, as workers allege the company has been retaliating in stores and stonewalling at the bargaining table.
US National Labor Relations Board prosecutors have issued over 80 complaints against Starbucks, accusing the company of illegal anti-union tactics including threats, store shutdowns, and terminations of dozens of activists. Administrative law judges have issued nine rulings against the company over the past year. US federal judges have ordered the company to reinstate fired workers in Tennessee and Michigan, and NLRB members have ruled that the company illegally retaliated against workers in Philadelphia and refused to negotiate with union members in Seattle.
Sanders released a staff report this week claiming that “Under Schultz’s leadership, Starbucks has become the most aggressive union-busting company in America.”
Starbucks has said repeatedly that all claims of anti-union behavior are “categorically false,” and is appealing many of the rulings. The company said recently that many of the labor board’s cases against it constitute efforts to establish new labor law precedents, in situations where the company is already complying with existing labor law. “Where partners have been subject to discipline, those partners engaged in misconduct contrary to Starbucks policies and procedures,” Schultz plans to say Wednesday.
Schultz’s prepared remarks emphasize the generosity of Starbucks’s existing benefits.
“Many times, during moments of company economic challenge, investors have urged us to cut our benefits because we had ‘cover’ to do so, occasionally citing the fact that we were, at times, paying more for health care than we did for green coffee for our US stores,” he plans to say. “My response was always the same: If you think our benefit programs for our partners are too rich, it means you do not understand what drives Starbucks success.”
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