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News / Business

Starbucks bids to finalize all union contracts in 2024, with a caveat

By Renata Geraldo, The Seattle Times
Published: December 12, 2023, 9:48am

After months of negotiation gridlocks, Starbucks union workers represented by Workers United may have a contract in sight.

Starbucks sent a letter Friday to Workers United President Lynne Fox saying the company is ready to bargain and wants to finalize contracts for all stores in 2024.

“We collectively agree, the current impasse should not be acceptable to either of us,” Sara Kelly, executive vice president and chief partner officer, said in the letter. “It has not helped Starbucks, Workers United or, most importantly, our partners.” Seattle-based Starbucks refers to its workers as partners.

Fox welcomed the letter as a positive move for bargaining and said in a statement Friday the union never declined a meeting with Starbucks.

The letter comes as a gesture after a long stretch of stalled bargaining that worsened the already tense relationship between Workers United and Starbucks. Since the first Starbucks store in Buffalo, N.Y., voted to unionize two years ago, the two have exchanged blame for slow contact negotiations and filed hundreds of unfair labor practices with the National Labor Relations Board. The bumpy ride for the budding labor movement at Starbucks dampened the excitement that it initially inspired.

Still, the NLRB certified the successful union elections of 367 stores, according to the agency, as of Wednesday, out of a total of nearly 10,000 Starbucks stores in the U.S.

A major roadblock to contract negotiation has been how bargaining is done: in person or hybrid.

Friday’s letter reiterated Starbucks’ position that it is willing to proceed with negotiations in person only to allow for “open, honest discussions.”

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The union has protested in-person bargaining in the past because it could deter other workers from participating.

Fox didn’t immediately comment on the “in-person” request, saying Workers United was still reviewing the letter on Friday morning.

Earlier this month, Maggie Carter, a former Starbucks barista and staff organizer for Workers United, said Starbucks unionized workers would “do almost anything” to meet the company at the bargaining table. But they need to have a hybrid option for accessibility of workers “who are likely juggling chaotic schedules with school and work.”

The 29-year-old organizer for Workers United, the union that represents the majority of unionized stores in the U.S., said that since her former store unionized in Knoxville, Tenn., in March last year, there’s been no contract and barely any bargaining.

Starbucks has required the negotiation sessions to be in-person to guarantee the sessions are not recorded, which is a labor law violation. The NLRB prohibits recordings or transcripts of contract negotiations and has previously argued against recording bargaining sessions.

Unlike Workers United, other unions have seen some progress in negotiating with the coffee giant. Starbucks said it has reached tentative agreements on more than 20 sections since meeting in person 14 times since November 2022 with the International Brotherhood of Teamsters, which represents workers at a store near Pittsburgh.

Starbucks also said it reached a contract in August and October with the United Steelworkers for two individual stores in Alberta, Canada. Starbucks said it is negotiating with other Canadian stores represented by that union.

According to Starbucks spokesperson Andrew Trull, company representatives have appeared in person for first bargaining sessions for approximately 100 separate stores represented by Workers United in the past year.

Hitting roadblocks

A revival of contract negotiations can be good news for the Starbucks labor movement, which appeared to be losing steam.

The union movement came with a lot of excitement, as the retail sector has been largely overlooked because of high turnover, and Starbucks workers were leading a sense of renewal in unions, said University of Buffalo professor of sociology Erin Hatton.

But the movement hit a reality check as disagreements between unionized workers and the company escalated. Former Starbucks CEO Howard Schultz told The New York Times in June 2022 that Starbucks was battling for “the hearts and minds” of its workers, and he saw no need for unions as a third party interfering between the company and its workers.

Schultz’s position set the tone for a contentious relationship with the union. It also drew congressional scrutiny earlier this year. Sen. Bernie Sanders pressured Schultz to testify before a Senate committee about Starbucks’ alleged union-busting activities just days after he stepped down as CEO. Schultz said in the hearing he supported the law and denied any anti-union practices.

Under Schultz’s helm and afterward, the union took complaints regarding Starbucks’ handling of union activity to the NLRB. As of Wednesday, there were 698 open or settled unfair labor practice cases in the U.S. against Starbucks, its Roastery and Reserve subsidiary Siren Retail, or the law firm representing the company, Littler Mendelson.

Starbucks’ Trull said earlier this month the union is weighing down the NLRB with “an unprecedented number of alleged charges,” but he said they are working together.

“Workers United and the NLRB have used the organizing campaign at Starbucks as a vehicle to overturn established precedent and employer guidance in an attempt to set new standards,” he said.

NLRB cases can take years to resolve, and the agency has very limited penalty options, Hatton said. As a result, employers can use anti-union tactics such as firing union leaders with very little consequence, she said.

“The labor law system is very, very slow, and it has no teeth,” Hatton said.

In Seattle, the board decided in June that Starbucks broke labor law by telling an employee they couldn’t testify at an NLRB hearing without securing shifts and by prohibiting union activities during company-paid breaks at a now-shuttered Capitol Hill store.

The penalties were a cease-and-desist order and a requirement for Starbucks to comply and to send the notice to that store’s workers.

Nelson Lichtenstein, a research professor in the department of history at the University of California, Santa Barbara, said that while the NLRB’s proceedings can take years to resolve, the company can take other methods to slow the spread of the union movement. High employee turnover is another advantage, Lichtenstein said, because new workers can have less interest in participating in a union.

Starbucks workers’ single-store bargaining is also a challenge because of the small number of workers in each store unit as opposed to autoworkers, for example, whose union contract applies to all workers at different plants, Hatton said.

As a result, autoworkers can strike and affect the company’s bottom line because, since all workers are unionized, it could mean a full stop on production, Hatton said. But if Starbucks workers shut down production at their individual stores, it has little effect on the company compared with the thousands of stores, most of them not represented by a union, it has in the U.S.

“The impact of their power is curtailed by that fact,” Hatton said.

The way forward

Schultz’s departure in March marked an opportunity for a new chapter between unionized workers and Starbucks. And so does Friday’s letter, if the mode of bargaining doesn’t create another deadlock.

Unlike his predecessor, Starbucks CEO Laxman Narasimhan has largely steered clear of discussing the Starbucks union drive. Instead, Narasimhan has focused on discussing worker retention and made “reinvigorating partner culture” one of the company’s growth paths.

Starbucks also announced wage increases last month by at least 3% based on tenure, effective Jan. 1. Starbucks’ Trull said in November all workers at U.S. company-owned stores — including those represented by a union — will receive the increase.

Despite the wage increases, former Starbucks barista Carter said Workers United wants to keep unionizing more stores and building pressure on Starbucks to reach contracts that address schedule flexibility, health and safety, and access to benefits available to nonunionized stores such as credit card tipping.

Workers “want consistency in their schedules, and they want, more importantly, agency,” Carter said.