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Breaking Down Former Starbucks CEO Howard Schultz’s Congressional Testimony
“Many would argue we have too much food. It’s extraordinary how wealthy we are!” and other real things senators said to the CEO accused of rampant union-busting.
Hi friends! This piece came together in a flash. We were prepared to release a completely different article, but after seeing the flurry of tweets and soundbytes coming from the Howard Schultz hearing in front of Congress, I texted my editor and asked, “can we pull off a recap of Schultz’s testimony in a day?” She said yes, and here we are.
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On Wednesday, March 29, Howard Schultz testified in front of the Senate Committee on Health, Education, Labor & Pensions (HELP) to discuss anti-union activity at Starbucks. Schultz had served as CEO until March 20th, when he abruptly stepped down two weeks before he was scheduled to transition out of his position. Some speculated that the move was to circumvent testifying in front of Congress, but Sanders' aides made it clear that he was still expected to testify.
His testimony was televised, and outlets like More Perfect Union live-tweeted some of the most salient moments. I watched all three hours of the committee meeting, including statements from witnesses called by both Republicans and Democrats to refute and support Schultz—and it was quite a hoot. Here's a timestamped account of some of the day's most important—and wildest—statements.
EDIT for breaking news: Hours after Schultz testified, Starbucks shareholders voted to “conduct an independent assessment of its labor practices,” according to Reuters.
I’m not 100% sure what this means—I imagine Starbucks will be hiring the third-party agency, and I have little faith that guarantees an impartial look, but the vote does indicate a sea change across all levels of the company, and perhaps is reflective of how Schultz did in front of the Senate.
00:00:46 — Bernie Sanders, Senator from Vermont and head of the HELP committee, gives an opening statement about growing wage disparities, concluding that this current generation might be the first ever to have a lower standard of living than the generation before. Key facts from Sen. Sanders' statement:
"The average American worker is making $50 less a week than he or she did 50 years ago, adjusting for inflation."
CEOs make 400 times more than the average worker.
"Union workers earn 20% more on average than non-union workers."
"The number of union elections taking place in America has gone up 53%."
Sanders alleges that Starbucks has waged one of the most aggressive anti-union campaigns in modern history. To support these claims, he cites the following:
"The National Labor Relations Board (NLRB) has filed over 80 complaints against Starbucks for violating federal labor laws."
Over 500 unfair labor charges have been filed against Starbucks.
"Judges have found that Starbucks broke the law 130 times across six states since workers began organizing in the fall of 2021" for actions such as illegally firing over a dozen workers for organizing.
Over 300 Starbucks locations representing 7,000 workers have voted to form a union—but Starbucks has "refused to sign a single first contract with the union—not a single one."
In March, a judge found Starbucks guilty of engaging in "egregious and widespread misconduct," including "illegally retaliating against employees for unionizing," illegal surveillance, promising wage increases to non-union workers, passing on hiring potential employees who supported the union, and overstaffing stores before a union vote. The judge stated: "widespread, coercive behavior over six months had permeated every store in the Buffalo market."
Many Starbucks employees make $13-$15 an hour and are subject to unpredictable schedules with varying hours. Starbucks is a corporation worth roughly $113 billion. Schultz personally is worth $4 billion.
There's also this moment when Sanders says Schultz is only testifying "under threat of subpoena." I can only describe Schultz's resulting facial expression as "smug child":
I recommend watching all of Sanders' opening statement—hearing just how brazen Starbucks has been in its anti-union actions is important. And what I appreciate is that Sanders regularly reminds people that Starbucks' actions are illegal. It is breaking the law. Sanders says, "I will be asking Mr. Schultz whether or not he intends to obey the law."
Even worse: Starbucks has broken the law hundreds of times without suffering any significant repercussions. By contrast, the punitive measures we take towards poor and marginalized people for petty crimes are far more serious than what the multinational corporation, with its near-infinite resources, has endured.
Sanders ends with what he finds most disconcerting: that Starbucks is being tactical in its anti-union campaign and stalling on purpose. "And let me conclude by saying that what is outrageous to me is not only Starbucks' anti-union activities and their willingness to break the law, it is their calculated and intentional efforts to stall, to stall, and to stall. They understand that the turnover rate … is high. They understand that if workers do not see success in gaining a contract, they are going to get discouraged and give up the fight. In a time when we want … for people to stand up and fight for their rights, to try and destroy the spirit of thousands and thousands of people who are fighting for justice, that, to my mind, is unforgivable."
By contrast, the punitive measures we take towards poor and marginalized people for petty crimes are far more serious than what the multinational corporation, with its near-infinite resources, has endured.
00:14:35 — Bill Cassidy, Senator from Louisiana and the ranking member of the HELP committee, gives an opening statement essentially evoking the idea that Schultz and Starbucks should be questioned under the presumption of innocence, alleging that the committee has already made up its mind about Starbucks' actions (it didn't—a whole bunch of judges did), suggesting that this is not "a good faith effort to get at the facts, but a smear campaign."
Cassidy brings up a really tired argument: unions are politically connected and alleges that the NLRB serves specific partisan interests. He continues to go hard against the NLRB, citing a particular case in Kansas where Starbucks alleged there was inappropriate conduct—if we want to talk about the difference between "allegations" and "proven facts litigated in court," this is an excellent example since all these allegations come from Starbucks. He also does some political grandstanding about how the government should be focusing more on issues like inflation, getting Americans back to work (I guess he forgot unemployment is at an all-time low), and the high cost of prescriptions (a problem that a random guy on Twitter was able to solve more effectively than any government entity has).
But overall, Sen. Cassidy's opening statement is innocuous, and he repeatedly states that workers have the right to unionize. His speech attempts to shift the focus on the NLRB rather than Schultz and other high-power CEOs.
00:20:11 — Howard Schultz makes his opening statements. He opens with a story about his father, who, in 1960, was injured and subsequently fired from his job, and how this inspired him to approach business based on "respect and shared success."
"We call our employees partners … because since 1991, we established shared ownership for every single person at Starbucks, full and part-time—unprecedented," he says, and then lists some of Starbucks' accomplishments for workers, like providing stock options to employees, college tuition reimbursement, and providing health benefits "25 years before the Affordable Care Act for full- and part-time employees working 20 hours a week." According to Schultz, the average wage of a barista is $17.50 an hour.
His opening statement mainly focuses on how Starbucks has led the way in many progressive employment policies, and he's not wrong—but he is making a false argument. This goes back to "if a workplace is good, you don't need a union" reasoning, which relies on an incorrect parallelism and a fundamental—and willful—misinterpretation of what a union is.
The argument is also incredibly paternalistic: It elevates Starbucks—and Schultz himself—as the bestower of benefits; because they've been so "generous," their power and control should not be questioned. And it's tired. Schultz's statements rely on common anti-union reasoning, alleging unions are only for bad workplaces. If you read between the lines, the message is clear: workers should be grateful and shut up.
00:25:49 — Sanders starts with his questioning and attempts to limit Schultz to yes or no questions. That breaks down pretty quickly with Sanders' second question:
Sanders: Are you aware that NLRB judges have ruled that Starbucks violated federal labor law over 100 times during the past 18 months, far more than any other corporation in America?
Schultz: Sir, Starbucks Coffee Company unequivocally—and let me set the tone for this early on—has not broken the law.
Sanders: Okay. Are you aware that on March 1, 2023, an administrative law judge found Starbucks guilty of "egregious and widespread misconduct," "widespread coercive behavior," and showed "a general disregard for the employees' fundamental rights" in a union organizing campaign that started in Buffalo, New York in 2021? Are you aware of that?
Schultz: I am aware those are allegations, and Congress has created a process that we are following, and we are confident those allegations will be proven false.
Schultz claims that he had little to do with union dealings when he was brought on again as CEO in April 2022 and claims he had no involvement in shutting down stores. It's important to note here that Schultz personally announced store closures and that while unionized Starbucks locations represent less than 3% of all stores, a significantly higher percentage of unionized stores were shuttered.
Many of Sanders' questions reference his opening statement, and Schultz continues to assert that Starbucks did not break the law—despite multiple courts finding Starbucks' actions illegal. Schultz also alleges that the workers, not Starbucks, are responsible for delaying contract negotiations by refusing to meet in person (some members joined negotiations via Zoom for COVID safety reasons).
00:33:23 — Sen. Rand Paul of Kentucky takes the floor and makes the weird decision to quote Ayn Rand's "The Fountainhead," after which follows one of the most bizarre speeches about witch hunts and entrepreneurial success. "Many would argue we have too much food. It's extraordinary how wealthy we are!" is an actual sentence he says.
Schultz's statements rely on common anti-union reasoning, alleging unions are only for bad workplaces. If you read between the lines, the message is clear: workers should be grateful and shut up.
He lists Starbucks' accomplishments and says Starbucks achieved all of this because "capitalism works." "You know what's sustainable? Capitalism and profit." Again, he misses the point: He believes this committee is "trashing" Starbucks as a whole. He asks no questions.
00:38:20 — Sen. John Hickenlooper of Colorado takes the floor. He opens by acknowledging the accomplishments of Starbucks. Still, he notes that many young people who felt initially compelled by the company's progressive values now feel "disillusioned" by its anti-union efforts. He asks: "How do you respond to those workers who appreciate the Starbucks model but would like to be able to organize with less confrontation?"
Schultz asserts the company's "preference" not to recognize unions and continues to push the "we'd like to work with partners directly" line, which is nonsensical. Hickenlooper then talks about the declining middle class and how union membership correlates to better outcomes for working-class people.
Schultz again falls on the same trope: Starbucks is not a "nefarious" company. "If you look at the '50s and '60s, unions were generally working on behalf of people in a company where those people weren't treated fairly … we do not believe … we're that kind of company. We treat our people fairly. We do nothing that is nefarious. We put our people first. We make decisions based on our people, and we have the track record to prove it."
00:45:11 — Sen. Mitt Romney of Utah is up. He talks about the irony of him, a conservative Mormon, defending a one-time Democratic presidential nominee—and I think that should tell you a lot. I hope that sent a shiver down Schultz's spine.
Then he talks about job creation, saying that it's unfortunate that Schultz has to be "grilled by people who have never had the opportunity to create a single job." Alexander Sammon reporting for Slate writes that Romney's questions point to alleged misconduct by Starbucks: "In a botched attempt to prove that not being in a union is better than being in one, he pointed out that non-union employees at Starbucks were given a raise while union ones were not—one of the alleged union-busting actions that has Schultz and co. in hot water at the NLRB."
00:51:20 — Sen. Patty Murray of Washington begins her questions, and Murray and Schultz acknowledge that they know one another since Starbucks is based in Washington. Schultz admits he takes personal offense to Murrary's questions when she shares reports from her constituents about unfair labor practices. Schultz says he's offended that she believes the word of her constituents, the 19 unionized stores, and the 71 complaints filed against Starbucks, rather than him. He calls the concerns she's brought up "not true."
Schultz also brings up an argument that came up in Sanders' questioning—specifically, as he understands it, he is not allowed to extend wage increases and benefits to unionized stores. A legal expert will later take the stand to assert that this claim is based on no existing legal arguments.
00:55:25 — Sen. Tommy Tuberville of Alabama is another in a line of senators who claim to support unions but don't seem to understand how they work. At one point, he seems to think Starbucks has to negotiate with "each individual, not each store."
He asked this nonsensical question: "You want to be respectful, as well, due to the requests of any employees. And you want to make sure that every person, or group that you deal with, feels like their rights are being respected and their voices heard. This could even include employees with specific rights and protections in the workplace, is that correct?" Schultz says that's correct, and I am still trying to understand what this means. Schultz blames union organizers for complications and delays during the bargaining process.
01:00:46 — Sen. Bob Casey of Pennsylvania probably provides some of the most compelling questions of this meeting.
Casey asks about Starbucks' legal representation. The company hired Littler Mendelson, "one of the largest and most notorious union-busting firms in the country that reportedly charges upwards of $600 an hour for their services." He mentions that Starbucks closed most of its Buffalo-based stores in 2021 to hold captive audience meetings and notes that Starbucks "has refused to say how much they've spent on anti-union efforts." He also notes that, under federal law, Starbucks can write off these expenses as regular ol' cost of business expenses. "Taxpayers are subsidizing union-busting in the United States of America."
Schultz takes more offense to Casey categorizing Starbucks's actions as "union-busting." Casey pins Schultz down on supporting legislation that allows businesses to write off expenses to hire union-busting firms, asserting that he "supports the law."
Casey asked specifically about surveillance: "Another…judge wrote that Starbucks uses headsets to closely supervise, monitor, and create the impression that employees' union activities are under surveillance…do you believe that workers should have the basic dignity at work not to be surveilled by their employees?"
Schultz responds: "Senator, I am incredibly proud of how we treat Starbucks partners and have since 1987." He then denies knowing anything about surveillance.
Then Schultz makes an egregious allegation: that the "person" who instigated union talks was paid for by union organizers. He offers no proof to support this allegation.
01:06:56 — Unlike Sen. Casey, Sen. Markwayne Mullin of Oklahoma delivers some of the most unhinged takes of the meeting. He says, "unions today, all they want to do is fight with their employer." He also claims, "If you're part of a union, you can never be an executive, you can never be a manager, never be a CEO, and if you can't be an executive or a manager or a CEO, then how are you actually going to implement the changes that the unions want in those positions to begin with? It seems like they hold back their team members," which is factually inaccurate and mathematically impossible.
Mullin then decides to fight with Sanders. "I take offense to the chairman pointing out all CEOs are corrupt because they're millionaires," which Sanders never claims. He makes some weird arguments about socialism—but then reiterates he supports unions, although nothing in his rambling speech indicates such—and how the "government's role is to create an environment for entrepreneurs."
Even though Mullin can't stop yelling, Sanders responds," I think you've got an all-time record here. You've made more misstatements in a shorter period of time than I've heard."
01:14:14 — Sen. Tammy Baldwin of Wisconsin points out how "puzzling" it is that a company that defines itself so much by its progressive values would fight a union so vehemently. She doesn't ask many questions, but she is the first to highlight the inequity in power between Schultz and his employees. "You call them partners—your workers are limited in their ability to engage with you directly because there is a power differential."
She also mentions that unions provide clarity and safety for employees: "Instead of leaving it up to your anticipation, a union can ensure that you receive clear feedback about what your workers actually need, free from fear of retaliation."
01:20:18 — Sen. Mike Braun of Indiana uses my favorite word. Coming from the business world, he calls his employees "a family," and again, confuses the point of a union, saying, "pay good wages, have good benefits—you do that, you probably are never going to have a union knocking at your door."
Braun meanders, but he does note that $17 an hour is not a living wage and that he'd expect larger companies like Starbucks to pay more. Schultz says that managers make about $80,000 — if anyone here has worked for Starbucks as a manager, I'd like to know if this is true.
01:26:14 — Sen. Tina Smith of Minnesota brought up wage increases and benefits—including the option to receive credit tips—that Starbucks gave to non-union stores. She mentions that Starbucks United waived their right to negotiate on this matter, meaning Starbucks could extend these benefits to all workers. She also says that the average contract negotiation meeting lasts six minutes.
She goes for the jugular: "Honestly, it sounds like you are personally offended or insulted that anyone would question you or your company. It seems as if you feel that only bad companies should be unionized."
Schultz gets angry that people keep characterizing him as a billionaire: "I have billions of dollars. I earned it. Nobody gave it to me."
01:32:52 — Sen. Robert Marshall of Kansas uses his time to spout nonsense about crime in Democratic cities.
01:38:14 — Sen. Chris Murphy of Connecticut takes Schultz's repeated assertion that Starbucks follows the law and asks, "What do you mean when you say you abide by the law?" and recites the list of violations and court decisions ruled against the company.
"Do you think that, in all of those cases in which judges have required stores to be reopened or for workers to be reinstated, that they just got it wrong?" He later says, "It's akin to someone getting ticketed for speeding 100 times saying I have never violated the law."
01:44:08 — Sen. Cassidy comes back to take jabs at the NLRB and circles back to Schultz's allegation that a worker was paid by union interests to infiltrate a Buffalo Starbucks—I paused here to try to find information on this since Schultz states this as fact. From what I could find, no reports or evidence support this claim.
01:49:23 — Sen. Ed Markey of Massachusetts scolds Schultz and gets to the heart of the issue: "You fundamentally do not understand that these workers are just like your father—they have no rights." If there's any moment you should watch from this testimony, it's Markey's statement.
01:56:48 — Sen. Maggie Hassan of New Hampshire goes back and forth with Schultz, who continues to assert that Starbucks is trying to negotiate in good faith, citing the number of times they've tried to schedule meetings with organizing workers.
02:02:12 — Sen. Ben Ray Luján of New Mexico asks about worker benefits, attempting to establish that benefits like tuition reimbursement and healthcare are only available to employees working more than twenty hours a week. "I understand that Starbucks has a widespread pattern of reducing work or hours in stores that have unionized."
One of the big talking points Schultz keeps hammering is that Starbucks refuses to negotiate with union workers via Zoom. Luján asks: "Is it true that Starbucks can hold shareholder meetings virtually, but it refuses to allow some union members to join bargaining negotiations virtually, even if other members are present?" Schultz says this is correct.
There’s more to this hearing, including powerful statements from workers and some … weird statements from lawyers and a representative from the Heritage Foundation, a conservative think tank. But this is very long, and I think the witness statements deserve a deeper analysis beyond the small snippets from senators that jumped out to me, so we’ll be back next week with part two.