Starbucks’ Howard Schultz Broke Law In Talks With Baristas, Labor Officials Charge

The chain's famous CEO also faces a possible subpoena before the U.S. Senate to address union-busting allegations.

Federal labor officials filed yet another complaint against Starbucks and CEO Howard Schultz on Thursday, accusing the coffee chain’s co-founder of breaking the law through “collaboration sessions” he held with baristas.

A Seattle-based regional director for the National Labor Relations Board said in the complaint that the sessions held by Schultz and other high-level Starbucks officers were meant to “solicit grievances” from workers and make promises in exchange for the workers not unionizing. Doing so is illegal under federal labor law.

Starbucks had billed the collaboration chats as “intimate, honest and authentic conversations among partners from all levels of the company.”

The complaint also alleges Starbucks violated the law when it created a new three-store “heritage district” in the company’s hometown of Seattle, requiring workers at those stores to reapply for the same positions.

The regional director said nearly half the employees were not rehired at their previous locations, including the majority at the company’s First Avenue and Pike Street shop, where employees were trying to unionize. Newly hired workers received raises and new benefits, while those who were transferred did not, according to the complaint.

Ronald K. Hooks, the NLRB regional director, alleged that Starbucks undertook such changes because the workers had exercised their collective bargaining rights, and because the company wanted to “discourage employees from engaging” in such activities in the future.

Hooks said Starbucks should have to offer raises to the workers who were not rehired at their previous stores and send them letters of apology. Notably, he also said Starbucks should have to “disband” the heritage district and restore those locations to their “status quo operations.”

Starbucks said in a statement that the complaint has “no merit” and the proposed remedies would “undermine our ability to make lawful and appropriate business decisions” ― an apparent reference to Hooks’ recommendation that the heritage district be unwound.

“Our long and rich history of collaborating with and listening to our partners is core to our culture, and we look forward to defending our partner engagement efforts and lawful business decisions,” the company said.

“Mr. Schultz has made it clear that he is the driving force of labor policy at Starbucks.”

- Sen. Bernie Sanders (I-Vt.) in a letter to Starbucks

In addition to the new complaint, Schultz is also dealing with a possible subpoena to appear in Congress and answer questions related to Starbucks’ efforts to stop unionization activities. Sen. Bernie Sanders (I-Vt.), chair of the Senate Committee on Health, Education, Labor and Pensions, announced earlier this week that he planned to hold a vote among his colleagues next week to determine whether the subpoena should be issued.

Starbucks has said Schultz should not appear before the committee and has offered to send other executives in his place, a proposal that did not satisfy Sanders. The senator said Thursday he was concerned Schultz would “continue to defy” a request made by lawmakers.

“Mr. Schultz has made it clear that he is the driving force of labor policy at Starbucks,” Sanders said in a letter.

Howard Schultz faces a possible subpoena and numerous complaints brought against Starbucks by the NLRB.
Howard Schultz faces a possible subpoena and numerous complaints brought against Starbucks by the NLRB.
The Washington Post via Getty Images

The new complaint is one of more than 70 that board officials have brought against Starbucks accusing the company of firing workers, closing stores and making promises, all in an effort to stymie a national organizing campaign by Workers United. The group has successfully organized nearly 300 stores since late 2021.

The new complaint out of Seattle is one of a handful directly implicating Schultz, the company’s co-founder and best known face.

Labor board officials pursue such complaints against an employer when they’ve investigated allegations by a worker or union and found merit in them. The next step would be to hold a hearing before an administrative law judge, who would issue a decision that could then be reviewed by the NLRB’s five-member board in Washington.

“Just this week, an administrative law judge ruled that Starbucks committed ‘egregious and widespread misconduct.’”

If the judge and board find that Starbucks broke the law, the company could be forced to make workers whole for wages they missed out on and other losses. But the process typically takes years to play out, with numerous opportunities for appeal.

Starbucks has denied breaking the law and maintains it has run a clean campaign against the union. But the many complaints brought against the company are finally starting to result in official findings by NLRB judges.

Just this week, an administrative law judge ruled that Starbucks committed “egregious and widespread misconduct,” including firing union supporters, at stores in western New York, where the union campaign began.

Unlike with complaints brought by regional directors, it is much harder for Starbucks to dismiss such decisions as mere “allegations”: judges hold hearings and listen to testimony from both sides to determine whether an employer broke the law.

Starbucks said it was considering “all options to obtain further legal review” of the case.

This story has been updated with comment from Starbucks.

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