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Starbucks Is Acting Like They're Too Big To Fail
The global brand is betting on money and blatant law-breaking to combat the union fight—so far, their gamble is paying off.
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December 9, 2021, was an exhilarating day. On that day, a Starbucks in Buffalo, New York, became the first of the coffee chain’s 9,000 U.S.-based stores to vote in favor of a union.
News of the union win went viral: Photos of the vote showed joyous workers celebrating a monumental victory. Many outlets assigned the event as a symbolic jumpstart to a more significant labor movement.
In a way, these outlets were right. Since the Buffalo store union vote, 256 Starbucks locations across the nation followed suit, filing and subsequently winning their own votes. Union support is at its highest level among the U.S. public since 1965, and high-profile unionization fights at megacorporations like Amazon, Apple, and—as of moments before this writing—Peet’s Coffee have taken up major real estate across national newspapers and publications, galvanizing smaller businesses to file their own union petitions.
But as we come to the one-year anniversary of the Buffalo vote, Starbucks still has yet to agree to a single union contract.
This is the last long-form piece I’ll write this year, and I want to dedicate it to one of the biggest coffee stories of the year: the Starbucks union movement. Beyond celebrating their historic vote, I also want to speak plainly about how the megachain has been able to delay, thwart, and dampen union activity: through alleged unlawful actions. And it’s mostly getting away with it because of a lack of meaningful repercussions—and because for now, Starbucks is acting like it’s too big to fail.
What’s a Union Without a Contract?
When I say that Starbucks is “too big to fail,” I don’t mean it in the same way as during the 2008 global financial crisis, when the phrase was first popularized. Instead, I mean that Starbucks will continue to wield its immeasurable power, influence, and money to quash the union movement unless government entities dole out punishment which is scalable and appropriate for a global brand.
First, let’s talk about contracts. A “yes” vote for a union doesn’t automatically confer rights or benefits. Once a group of workers votes for a union, they must go through the collective bargaining process, where the union sits down with the company to negotiate the terms of their employment.
Bargaining isn’t a one-and-done process; it can take multiple sessions to iron out all the details of a first contract. However, bargaining has become increasingly more difficult for unions. In an op-ed for the Seattle Times, U.S. Department of Labor Secretary Marty Walsh states: “Twenty years ago, nearly half (48%) of all newly organized units reached a first agreement within a year, and nearly two thirds (63%) within two years. But today, only 36% of newly organized units reach a collective bargaining agreement within one year, and only 58% after two years.” In a past piece onBoss Barista, I talked about how it takes, on average, 409 days for a union to reach its first contract.
Walsh is talking about the time it takes for union contracts to be ratified, because unions can move to decertify their initial union vote after a year has passed if no contract has been agreed upon. If Starbucks had sat down with the union and ratified a contract, the union would have been protected from decertification votes for three years.
Delaying bargaining “is a frequent and effective tool used by employers in first contract bargaining, because the longer the negotiations drag on, the more turnover, fear and frustration will work to undermine union support,” Cathy Creighton, director of Cornell University’s School of Industrial Labor Relations Buffalo Co-Lab, told Buffalo News in November. Both Amazon and Trader Joe’s have been accused of delaying the bargaining process. By September 2022, over 200 Starbucks locations had voted to unionize, but CNBC reports that only four were actually proceeding with contract negotiations.
Finally, on September 26, 2022, Starbucks “sent letters to 238 stores offering a three-week window in October to start negotiations,” CNBC reported. A month later, contract negotiations broke down, with both sides alleging the other was negotiating in “bad faith.” Many of these meetings have ended with Starbucks representatives walking out—some within minutes—while corporate representatives have cited issues with members joining bargaining chats via Zoom.
Walsh wrote his op-ed to drum up support for the Protecting the Right to Organize (PRO) Act. The PRO Act aims to strengthen protections for workers asserting their right to unionize. One of the ways it plans to do so is by allowing the National Labor Relations Board (NLRB) to impose monetary penalties on employers who violate labor laws.
The NLRB is an independent government organization—and it has been working hard this year. In May, Starbucks was accused of “29 unfair labor practice charges that included over 200 violations of the National Labor Relations Act.” Earlier this November, the NLRB filed a federal injunction against Starbucks, “ordering the company to rehire fired pro-union employees and stop committing alleged unfair labor practices.” This is the fourth injunction filed by the NLRB against Starbucks.
Although the NLRB can point out and file motions against alleged lawbreaking and wrongdoing, it cannot currently impose fines against employers who break the law. It can remedy past infractions, like reinstating workers’ lost wages if they were fired unjustly, but it cannot levy additional fines on companies if they break the law in the first place.
In theory, there are no real repercussions for companies that violate the law, making union-busting tactics low-risk for employers. Starbucks seems to be the testing ground for how far a company can go before it meets any real consequences. An article for Slate titled “Starbucks’ Aggressive Union-Busting Is a New Model for American Corporations” posits the question that CEOs and higher-ups in these businesses might ask themselves: “When you can’t be fined, why not break the law to stop unionization?”
However, there are consequences for workers. Although the NLRB has successfully filed injunctions to reinstate workers who were unfairly fired—most notably in Memphis, where Starbucks was ordered to rehire seven employees—that still means workers went weeks without pay. In May, interim CEO Howard Schultz (who served as Starbucks’ longtime CEO until 2017, only to be brought back amid the company’s union push) announced that Starbucks would be extending benefits and wage increases for all workers—that is, all workers at non-union stores. “We do not have the same freedom to make these improvements at locations that have a union or where union organizing is underway,” Schultz said, a claim Starbucks Workers United called “dead wrong.” Despite that, Schultz did it again, and announced more benefits for workers in September—benefits only available to workers at non-union stores.
Shut It Down
One of the most blatant ways Starbucks has allegedly violated the law is by closing unionized stores. Employees are protected from retaliatory actions by their employers if they choose to unionize, but it’s challenging to prove intent on a move like shutting down a store entirely.
Last week, Starbucks closed the first Seattle-based store to unionize after shuttering multiple Seattle stores earlier this year. Starbucks has closed unionized stores in Portland, Ithaca, and Buffalo, to name a few. While the company has cited reasons like “safety concerns” as cause for these closures, Starbucks Workers United claims that many were instead due to union activity, noting that a higher percentage of unionized stores have been shut down.
Despite announcing multiple closures, Starbucks just opened an enormous new location inside the Empire State Building, outfitted with garish architectural features and pieces from local artists. The chain is still opening new locations and making more money than ever before. “Customers flocking to Starbucks and ordering Pineapple Passionfruit refreshers and Iced Shaken Espressos helped propel the coffee giant’s revenue to a record $8.2 billion in the latest quarter,” The New York Times reports.
These seemingly disparate facts—closing stores, opening new ones, record profits—confused me at first … until I began considering the scale at which Starbucks operates. As mentioned earlier, Starbucks owns over 9,000 stores in the U.S. alone. An article from Restaurant Dive notes that fewer than 3% of all Starbucks locations are unionized. The outlet estimates how much each Starbucks location makes, stating, “units represented by SBWU (Starbucks Workers United) would generate about $380 million in sales per year, equivalent to about only 1.3% of the company’s total revenue of $29.1 billion in 2021.”
Starbucks makes so much stinking money that it can afford to cut and run when things aren’t working out in its favor. Compounding this is the fact that the NLRB cannot impose any meaningful monetary punishment, so the megacorporation has virtually nothing to lose. Starbucks is so giant and powerful that it can essentially fight the mounting union effort with abandon, and with minimal fear of consequence.
But if that’s the case—if Starbucks is making money hand over fist—why is it opposing the union so vehemently?
For so long, I couldn’t understand why Starbucks—specifically Howard Schultz—opposed unionizing. Starbucks has heralded itself as a champion for progressive working ideals, so why did the buck stop here?
A Washington Post article by Greg Jaffe sought to shine a light on Schultz’s opposition to the union effort, which seems to extend beyond simply wanting to appease shareholders and increase profits. “Union officials, who had hoped that Schultz might reluctantly make peace with their movement, were baffled by his increasingly hostile tone. ‘I’ve never met a businessman like him,’ said Richard Bensinger, a longtime organizer who was working with the Starbucks baristas. ‘He hates unions more than he loves money.’”
The article delves into Schultz’s upbringing and how his father’s harsh working conditions inspired him to do more for workers at Starbucks. However, he argues that because Starbucks offers its employees more than many service-sector businesses, it shouldn’t need a union. “To Schultz, unions existed to protect workers from bad companies, like the ones who had abused his father. ‘That’s why unions were created,’ he said in an interview. A union had no place at a company that cared about its workers like Starbucks, Schultz believed. It would pit employees against their bosses, turning partners into adversaries.”
For Schultz, it seems that benevolence can only come from his hands. For Starbucks, positive workspaces have to be entirely within its control, depersonalized from the people who actually work in the stores every day.
I’ve played out a thousand scenarios where Starbucks accepts the union. I don’t think it would do so based on goodwill alone (it should, but it won’t), but I did think about the positive publicity a move like this would generate. Imagine the press glow-up! Imagine the years of soundbites, TED Talks, and conferences we don’t even know about because they’re only for wealthy people, where Howard Schultz could continue to cash in on his “compassionate leader” persona!
Shepherding what could be one of the largest unions in the world would be groundbreaking, and for a long time, I thought it was bizarre that Starbucks couldn’t see that. But then I was reminded that many actions are driven not by logic, not by goodwill, and not necessarily even by money. Control is the ultimate aim.
The Ripple Effect
I wrote this article to speak plainly about what Starbucks is doing and why it’s working. The scale at which Starbucks is operating benefits it greatly, and we need to understand that scale to comprehend why it continues to act the way it does. And, as the Slate article mentions, other companies are now using tactics that Starbucks has shown to be effective. We need to know what impact these actions are having so we can begin to advocate for things like the PRO Act, or call for better funding for the NLRB, or contextualize why paying attention to the union fight is so important.
But at the one-year mark of Starbucks’ union drive, we must also celebrate how impactful the unionization push has been for hundreds of baristas at small, independent coffee shops around the country. This year, Colectivo Coffee workers have started contract bargaining. Intelligentsia won its union vote. Baristas at Ultimo Coffee filed a petition to unionize. Even though many articles about the current state of the Starbucks union effort are grim, pointing out how the movement might have lost momentum, it’s essential to shine a light on the ripples the Starbucks union effort has caused—and to remember that it’s still far from over.
2022 was a monumental year for unions, and I fully believe 2023 will be equally massive. See you on the other side.
Cover photo by Eleanor Chronister