Why scrutiny of Starbucks’ alleged union violations is boiling over now

Public scrutiny is brewing for former Starbucks CEO Howard Schultz on Wednesday as he testifies before a Senate committee about the company’s alleged anti-union practices.

In the last few years, as some workers for the coffee roaster and cafe chain have made high-profile attempts to unionize, the company has permanently closed stores where they worked and fired people who were helping organize. The company has consistently denied firing any employees or closing stores due to organizing activity.

“Workers have the constitutional right to organize unions and engage in collective bargaining to improve their wages and working conditions,” Sen. Bernie Sanders, chairman of the Senate Health, Education, Labor and Pensions Committee, said March 7 during a news briefing. “Unfortunately, Starbucks, under Mr. Schultz’s leadership, has done everything in their power to prevent that from happening.”

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Schultz, who stepped down this month, originally declined to testify, but changed his decision days before the committee planned to vote on a subpoena in early March.

In recent months, multiple federal judges have ruled that Starbucks illegally fired workers in both Buffalo, New York, and Memphis, Tennessee. NLRB Administrative Law Judge Michael Rosas cited Starbucks’ “egregious and widespread misconduct” in his March 2 ruling, which consolidated 35 unfair labor practice complaints against the company.

Steven Greenhouse, a former New York Times journalist who covers labor issues, said the hearing could shed light on the Starbucks allegations for those who may not know the full scope, as well as embarrass the internationally known brand.

Greenhouse thinks Sanders “hopes to open the public’s eyes to what’s happening, to see that Starbucks is really acting unfairly and illegally and trying to stop a union.”

Interest in unionization has risen around the country in the last few years. One in 10 workers in the U.S. is a member of a union. The number of unionized workers grew by approximately 200,000 in 2022, and union election petitions increased by 53 percent from the fall of 2021 compared to a year later, according to data from the Bureau of Labor Statistics.

Seventy-one percent of Americans approve of labor unions, according to a Gallup poll conducted last summer, the highest level the poll has recorded since 1965.

Jake Wilson, author of “The Cost of Free Shipping: Amazon in the Global Economy,” said he believes a lot of that push has come from young people in the workforce who have very little to lose by fighting for better compensation since they probably don’t have a house or retirement plan at stake, as older workers might.

While the National Labor Relations Act (NLRA) ensures many protections for workers looking to unionize, the disparity between corporate resources (such as legal teams, consultants and copious funds) versus far more meager worker resources often means companies are not held accountable for violations.

“The lack of penalties really creates huge incentives for companies to break the law,” Greenhouse said.

Kate Bronfenbrenner, a professor at the Cornell University School of Industrial and Labor Relations, believes the federal government has to do more than impose fines in order to curb this activity.

“The threat of a Senate hearing is not going to make anybody recognize the union,” she said. “These employers are passionately anti-union. I think what changes their minds is if it starts to impact their profits or their ability to grow.”

Here’s more background on why Schultz and Starbucks are facing scrutiny, as well as the broader problem of companies using union-busting tactics.

What has Starbucks been accused of doing?

The National Labor Relations Board, a federal agency aimed at protecting workers’ rights, has issued more than 80 complaints against Starbucks for violating federal labor law.

According to the NLRB’s website, “Supervisors and managers cannot spy on you (or make it appear that they are doing so), coercively question you, threaten you or bribe you regarding your union activity or the union activities of your co-workers. You can’t be fired, disciplined, demoted, or penalized in any way for engaging in these activities.”

Yet companies, including Starbucks, have been found to violate these rights, including by holding “captive audience” meetings and denying benefits to union employees, experts say.

Captive audience meetings are mandatory events held by employers, usually with most or all employees present, where managers have the opportunity to discuss their positions on unionization. While these events aren’t inherently illegal, Wilson said they often become a place to “pressure” and “intimidate” workers.

Surveilling workers, laying workers off or even permanently closing work facilities have also been shown to be effective tactics for companies trying to curb organizing, according to Wilson.

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This assertion is also reflected in data that Bronfenbrenner has collected. Her analysis has found union efforts are less likely to succeed in companies that apply such tactics versus companies that don’t.

“Employers understand that threatening workers with job loss and interrogating workers, spying on workers has a chilling effect,” Bronfenbrenner said.

One of the most high-profile Starbucks violations has been the firing of seven employees at a store in Memphis, Tennessee after the workers began a campaign to unionize in early 2022.

“That was probably one of the most exhausting days of my life,” said La’Kota McGlawn, one of the workers fired that day. “I could just remember how drained I was at the end of it.”

After the shock and sadness wore off, McGlawn said, the union filed a complaint with the NLRB.

“Behind all those emotions was still that fighting feeling,” McGlawn said. “We know this is wrong and we are going to make sure something gets done.”

In September, Starbucks lost its court appeal, and a three-judge panel ordered Starbucks to reinstate the “Memphis Seven.” The company was not fined for this action.

While Starbucks argues that it fired the workers for inviting non-employee guests to come to the store after hours, Greenhouse sees a bigger corporate pattern of “firing so many pro-union workers who’ve led the unionization drive.”

“It’s just not a coincidence,” Greenhouse said.

McGlawn believes the firings had a chilling effect on other Starbucks stores in Memphis since no other nearby stores have filed for a union vote.

“There was a little bit of a scare,” she said.

Why do companies violate worker protections over unionization?

Despite the legal trouble it poses, Greenhouse said, firing employees can be an effective tool to halt union organizing due to a simple math equation.

He explained that when employees are working to unionize, it’s often in order to ask for increased pay. Rather than accept their request for a raise, let’s say the company fires them instead. Why? Even if those employees turn to the NLRB for help and eventually get reinstated, the process could take months or even years, and the company will only need to provide some back pay – money the workers would have earned if they had stayed employed – at the end of it. Meanwhile, firing those organizers likely halted the unionization effort and maintained the current pay rate for many, many more workers.

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During that period when a former employee is fighting to be reinstated, the current law can almost discourage them from seeking another job, Bronfenbrenner said. If an employee succeeds in getting rehired, the offending employer must provide back pay, but the employer can subtract any money the employee earned elsewhere during that time, Bronfenbrenner explained.

McGlawn said that she and the other fired Memphis employees were lucky to receive financial support from crowdfunding via GoFundMe and were also granted the ability — and even encouraged — to find jobs by the NLRB while the case was being decided. All seven workers were brought back to their store after seven months, but their back pay is still being litigated.

As cases have increased, the NLRB’s budget has remained at the same dollar amount, $274 million, for the past four years. That’s a $14 million drop from funding levels in 2011, even before accounting for inflation.

Due to its underfunding, Bronfenbrenner said, the NLRB has been struggling to handle the amount of cases brought to the agency.

“There’s more [labor] organizing happening than ever and their board is understaffed,” she said. “They’re working as hard as they can.”

Are these issues widespread?

In her recent report, Bronfenbrenner looked to figure out just how common such illegal anti-union actions actually are. Last September, she shared her findings with the House Labor Committee and offered recommendations for “removing barriers” for unionization efforts.

Her report found, for instance, that employers threatened to cut benefits or wages in 26 percent of all workplaces working to unionize between 2016 and 2021.

For companies that hired outside consultant firms – many of which, Greenhouse said, are known to recommend aggressive actions against employees – those numbers were higher across the board.

According to Bronfenbrenner’s report, employers threatened to cut benefits or wages in 26 percent of recent union campaigns, and threatened to partially or completely close locations in 40 percent of union elections, while organizing employees were reportedly laid off in 4 percent of these unionization efforts.

Wilson noted that some companies like Amazon have been texting and calling their employees with anti-union sentiments.

“I think what’s important to keep in mind is that these illegal anti-union actions by corporations are more the norm than the anomaly,” Wilson said.

Yet Bronfenbrenner’s report also notes that the reported cases of aggressive tactics have gone down since her last collection of data from 1999 to 2003. She attributes this shift to unions concentrating on industries that are less likely to apply such tactics, such as media and nonprofits. She also explained that many companies don’t need to push as hard to convince employees to vote no on a union election.

McGlawn’s store in Memphis ended up voting to unionize despite Starbuck’s aggressive campaign. And since the first Starbucks location successfully unionized in Buffalo, more than 278 others around the country have done the same, according to Starbucks Workers United.

In another win for labor activists, the NLRB also recently expanded penalties for companies that illegally fire employees, requiring them to compensate workers for credit card late fees, lost housing or cars and health care costs.

What can we expect from the hearing?

When the Senate committee gavels in Wednesday, Bronfenbrenner expects them to confront Schultz – whom she says has had an “aura of invincibility” – with tough questions. And that, she predicts, could help empower employees at his former company.

Greenhouse believes Sanders wants the hearing to take place as a way to show other workers who are thinking about unionizing that they have powerful allies like Sanders behind them, and to more generally shift the nation’s approval of unions more favorably.

At the same time, Greenhouse believes the Republicans on the committee will likely speak in support of Schultz as a job creator and for providing health and education benefits for employees – an image of a corporate champion of workers that Schultz has tried to hone, he said.

Ultimately, whether the general public, shareholders or Starbucks employees are the ones watching, Bronfenbrenner believes that the “humbling” nature of being brought before the committee will likely have an effect on the company’s image.