Why is Starbucks Workers Union Suing CEO Howard Schultz?

The union of multinational chain of coffeehouses Starbucks baristas, Starbucks Workers United, is suing the company’s interim CEO, Howard Schultz, claiming that his recent comments about a better benefits package amounted to illegal threats and had a “chilling effect” on upcoming union ballots.

The inion contends that Starbucks violated the National Labor Relations Act as a result of Schultz’s comments in an April 22 filing with the National Labor Relations Board, and wants the board to issue a complaint in the union’s favor.

Last month, Schultz told U.S. store managers that the coffee chain’s benefits package was being reviewed, but that the enhanced perks could not be extended to locations that had voted to unionize without individually negotiated contracts for unionized workers. One of Schultz’s first acts as CEO was to halt the company’s share buyback program in order to invest in employee benefits.

Starbucks Workers United argues that Schultz’s comments “threatening to withhold” benefits had an immediate and significant “chilling effect” on organizing campaigns nationwide, according to a letter from the union’s counsel to the NLRB.

It allows workers to testify that Starbucks baristas read about the statements in the media just before voting, and as a result, some withdrew support “at the last minute,” jeopardizing a union victory at one Virginia store.

According to the letter, the comments were “parroted” by shop managers and district managers, obstructing efforts to organize or having a coercive effect.

Starbucks defended Schultz’s remarks, arguing that extending new benefits to unionized workers would require respecting the negotiation process. Any new benefit cannot be granted to stores that decided to unionize during collective bargaining without their consent.

Starbucks Workers United has filed over 80 claims against the company for allegedly breaking federal labor law, with the most recent victory being a petition to the NLRB for injunctive relief and prompt reinstatement of three Starbucks employees who were fired after attempting to organize.

Starbucks also filed its first charges against the union last month, alleging that it intimidated employees and violated federal labor laws.

According to a statement from Starbucks Workers United to CNBC, Schultz’s statements on the benefits review are simply another desperate attempt to block Starbucks partners from exercising their right to have a union and collectively bargain.

Hopefully, Howard will realize that the company cannot run a ‘progressive firm’ and be the poster child for union-bashing at the same time, the union added.

More than 200 shops around the country have petitioned the NLRB to vote on joining Starbucks Workers United, and more than 40 have voted yes. Starbucks has argued that its relationship with its partners is best served without the formation of a union.

Image Gage Skidmore



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