As CEO of Starbucks, Howard Schultz violated labor law with barbs

In April 2022, a Starbucks barista and union organizer was invited to a meeting with the company's upper management in Long Beach. During the meeting, the employee raised several concerns, including allegations of unfair labor practices that the company was facing.

Howard Schultz, who had just begun his third term as the company's chairman, was upset and shot back: “If you're not happy at Starbucks, you can work for another company.”

Now the National Labor Relations Board has found that Schultz acted unlawfully when he asked an employee to resign after he raised issues related to union organizing.

The board's decision, issued Oct. 2, ordered Starbucks to stop creating the impression that employees could be fired for engaging in protected activities such as union organizing. The company must also post an employee rights notice at all Long Beach stores whose employees attended the meeting with Schultz.

In its decision, the board wrote that it “has long considered unlawful employers' claims that employees dissatisfied with working conditions should resign rather than attempt to improve them through union activity.”

Starbucks did not immediately respond to a request for comment on the NLRB's decision in Long Beach, which comes at a time when the coffee chain has changed its stance on unionization efforts.

Until this year, the company had vehemently resisted the campaign to organize its workers, which began in 2021. Federal labor regulators found that Starbucks repeatedly violated labor laws by disciplining and firing workers involved in union activities, closing stores and delaying contract negotiations.

But inside February the company announced It had agreed with Starbucks Workers United, the union behind the campaign, to streamline contract negotiations and take a more neutral approach when workers at unionized stores took steps to organize.

Earlier this week, the union drive reached a milestone when a store in Washington became the 500th U.S. location to unionize. Starbucks Workers United cites the company's new stance as a reason for a wave of about 100 Starbucks stores that have unionized since March.

The Starbucks Workers United logo appears on the T-shirt of a person attending a hearing in Washington on March 29, 2023.

(J Scott Applewhite / Associated Press)

“We are pleased that the NLRB continues to stand up for workers and our legal right to organize. At the same time, we are focused on the future and are proud to take the company on a new path,” said Michelle Eisen, co-chair of the national organizing committee at Starbucks Workers United and a barista at a store in Buffalo, NY. said in an emailed statement regarding the decision on Schultz's comment.

Starbucks spokesman Phil Gee said the company disagreed with the decision and that sessions like the one with baristas in Long Beach and other locations across the country were aimed at gathering opinions from workers.

“Our focus remains on training and supporting our managers to ensure our partners’ organizing rights are respected, and continuing negotiations for ratified branch agreements this year,” Gee said in an emailed statement Friday .

Aside from allegations from federal regulators and other fallout from its past anti-union crackdown, the company is grappling with a leadership change that is sapping demand. Boycotts about his perceived support for Israel, Pressure from activist investors and criticism that it has strayed far from its roots with menus featuring overly complicated items that take too long to serve. Sales at North American stores fell 2% and sales in the rest of the world fell 7%, the company reported in July.

Schultz resigned last year and in August the company named a new CEO, Brian Niccol, to replace Schultz. Niccol has said he will stand by the company's new position on unions.

“I deeply respect the right of partners to choose to be represented by a union in a fair and democratic process.” Niccol wrote in a letter addressed to union members and posted on the company's website last week. “I am committed to ensuring that we work constructively and in good faith with the union and the partners it represents.”

Niccol wrote the comments in response to a letter signed by hundreds of workers who act as bargaining delegates from various stores for the union. The workers came forward ahead of a scheduled bargaining session, the first of Niccol's term.

Still, workers disagree on whether they should unionize.

While employees at the Washington store voted to join the union, workers at a Starbucks in Hollywood voted not to join the union on Monday. Also that day, a store in Salt Lake City failed to get the votes needed to recognize the union.

According to NLRB spokeswoman Kayla Blado, the NLRB conducted a total of 602 union elections at Starbucks stores, of which 102 failed and 500 passed. In California, 61 stores have held union elections and 41 of them have had their bargaining units recognized by the labor department.

At the Hollywood store, pro-union workers had been optimistic ahead of the vote count, in which 14 were against unionization and six were in favor. The workers contacted union officials in February, frustrated by problems with chronic staffing shortages.

Mikey Martinez, a shift manager who has worked at the store for more than five years, said he was afraid when he and his colleagues discussed unionization. But his initial concerns about the backlash faded after managers held a meeting about a month ago to explain the company's new, more neutral stance.

It was “really good to be able to talk about it without having to look behind the scenes to see if anyone was listening,” Martinez said.