The National Labor Relations Board has sided with workers who claim Starbucks broke labor law by withholding wages and benefits from unionized stores—the latest blow to its handling of baristas’ intensifying union drive.
Over 230 locations have now joined Starbucks Workers United’s union, helping make the world’s most recognizable coffee brand the corporate face of America’s union boom. Both Starbucks and longtime CEO Howard Schultz have now spent months attempting to aggressively thwart these efforts.
The federal board’s 30-page complaint filed Wednesday—a copy of which was seen by Fast Company—says the board has ruled Starbucks must pay the back wages denied to unionized workers, and extend any benefits that were only given to their nonunion counterparts. Ronald Kooks, NLRB director for the Seattle-area region, writes that Starbucks’s tactics have been “discriminating,” and amount to “discouraging membership in a labor organization” in violation of the National Labor Relations Act.
This is hardly the NLRB’s first complaint against the company, but Starbucks Workers United notes in a separate press release today that it is the first time the board has pointed directly at comments made by Schultz. “He claims to run a ‘different kind of company,’ yet in reality, Howard Schultz is simply a billionaire bully who is doing everything he can to crush workers’ rights,” Maggie Carter, a Tennessee barista and union organizer, says in their release.
At root here is a statement Starbucks made back in July, telling workers who seek union representation that “any changes to your wages, benefits, and working conditions that Starbucks establishes after [a union petition is filed] would not apply to you and would have to be bargained.” At the time, Workers United president Lynne Fox wrote a letter saying Starbucks had the union’s permission to raise wages and offer better benefits to unionized stores’ workers.
But on Monday, Starbucks responded in a letter of its own, which it provided to Fast Company, arguing this isn’t how the collective-bargaining process is designed to work. Since the process requires good-faith consideration of both sides’ proposals and counter-proposals, the letter contends, “Starbucks is unwilling to remove isolated subjects from the bargaining process merely because that is what Workers United wants.”
Starbucks didn’t address the latest NLRB complaint in its statement to Fast Company. But its position is essentially that Workers United’s claims that the company is punishing union stores by denying wages and benefits are a misinterpretation of labor law. Legally, wages and benefits are “mandatory” parts of the discussion about employment terms and conditions. That means “these subjects are to be negotiated as part of the collective bargaining process, with no single subject being ‘waived,’ or ‘agreed to’ in isolation and separate from other subjects.”
The NLRB’s complaint quotes liberally from comments Schultz made back in April, when he told workers during a company video call, “I promise we are going to make things better for you. We are going to give you the tools and resources to do your job.” He specifically said to “stay tuned” for improved benefits and wages, but warned employees Starbucks’s reading of labor law was that “We are not permitted by law to offer [any new benefits] to stores that voted for the union while they are in collective bargaining.”
The NLRB says this amounts to Starbucks saying “it would be futile for [workers] to select the Union as their bargaining representative.” It says since that April call, most nonunion employees have seen wages jump to $15 an hour or by 3% at minimum (whichever was higher), and up to either 7% or 10% above their market’s starting rate at maximum (whichever was higher).
Additionally, the board mentions handouts Starbucks distributed to stores in May and June—usually titled some variation on “Creating Our Future Together as Partners.” These promised new benefits were to workers whose stores hadn’t yet sought union representation. Beyond increased wages, the list included faster sick-time accrual, new career-growth opportunities, reintroduction of several popular training and leadership programs that had been discontinued, trips to coffee farms, a brand-new partner app, equipment upgrades, better technology, even ways for customers to more easily leave tips. Also, nonunion cafes’ dress codes would be relaxed to give baristas more leeway on piercings, tattoos, and hair color—a longtime sore spot for baristas.
The NLRB says that by not extending these benefits to everyone, Starbucks violated labor law. It’s laid out seven “remedies” that include paying back wages withheld from union employees, issuing letters of apology to affected employees “for any hardship caused,” and an all-hands meeting where Schultz might be required to read aloud, before workers and a NLRB agent, a statement explaining the rights granted by labor law. The board has also asked Starbucks to forward copies of payroll records, time cards, and other documents so it can calculate the backpay owed.
The chain, meanwhile, is continuing to get inundated with labor law complaints, both from the NLRB’s regional offices and Workers United union reps. It was handed a big defeat last week when a federal judge ordered Starbucks to rehire seven baristas fired after helping to organize their Memphis cafe. There have been 656 cases filed with the NLRB involving Starbucks this year, elections excluded, and 51 in the past month alone.
Correction: An earlier version of this article misstated when Starbucks sent its letter to Workers United. The letter was emailed on Monday, not last week.