Workforce

Report offers a new narrative of how Starbucks landed in union trouble

Though commissioned by Starbucks, it faults management for its naivety and misread of the situation, but says the chain never aimed to bust the union.
Starbucks
The unionization effort caught Starbucks by surprise, the report concludes. | Photo: Shutterstock

Surprise and naivety led Starbucks to make mistakes from Day One in its response to a unionization drive now well into its third year, but organizers are off-base in their assertions that the company knowingly acted to break up Starbucks Workers United, a new third-party analysis concludes.

The in-depth review of the situation, commissioned by Starbucks’ board of directors, provides a new narrative of the organizing drive, going all the way back to its start in August 2021. According to the report, employees of the first units to seek union representation had a point in complaining about their working conditions and treatment. Indeed, it notes, conditions in those Buffalo, N.Y., stores were among the worst Starbucks executives had ever encountered within the chain.

In the officials’ haste to address the poor physical shape of the stores and the workers’ complaints about how they were being managed, they often acted without an awareness of what they could or couldn’t do under federal unionization rules. They may indeed have violated the regulations in their rush to rectify the situation, but the mistakes were the result of ignorance rather than an intention to “bust” or completely shut down the union.

The chain executives who were dispatched to investigate the situation were also unaware that “salters,” or employees who took a barista job specifically to organize co-workers, had been dispatched to exploit the workers’ discontent, the report indicates. They did not realize, at least initially, that the call for union representation was not spontaneous. Rather, professional organizers backed by an affiliate of the powerful Service Employees International Union were leading the charge.

Part of the issue, it notes, was that Starbucks could not conceive that a union would find traction within the company’s workforce, which enjoys one of the most robust benefits packages in the industry, if not across all trades. It did not even have a labor-relations executive or department at the time, a striking omission for a global company with a workforce as large as Starbucks’.

Even after employees of the Buffalo stores petitioned the National Labor Relations Board for the go-ahead to vote on unionizing, Starbucks’ leadership team dismissed the situation as a fluke, the report contends. As the organizational effort spread quickly to other stores, market-level managers did not know how to respond because the possibility had never been addressed in their training. Nor were they aware of what they could or couldn’t do under NLRB regulations, leading to hundreds of assertions that Starbucks was violating the law.

The report observes that Starbucks Workers United and its parent organization, Workers United, have filed hundreds of complaints against the coffee chain with the NLRB. Starbucks has filed its own accusations with the regulatory agency, alleging the union groups have likewise overstepped the lines.

None of its complaints have progressed to the litigation stage. But the legal actions of Workers United have advanced and are now the subject of hearings before administrative law judges, the court figures who rule on NLRB complaints.

The report did not draw any warmth from Starbucks Workers United.

"Today's report, commissioned by and paid for by Starbucks, acknowledges deep problems in the company's response to workers’ organizing, including firings, retaliation, store closings and withholding of benefits from unionized workers,” it said in a statement. “The report shows Starbucks has a long way to go to shift policy and deconstruct the massive anti-union apparatus that remains in place and is active today.”

The third-party study recommends several ways Starbucks can avoid repeating its past mistakes in addressing the unionization effort.

Among them is a strong recommendation that Starbucks redraft its Global Human Rights Statement, or GHRS, or its core policy statement on interacting with all constituents. The report suggests the GHRS be amended to expressly state the company recognizes the rights of employees to communicate with one another about unionizing, without fear of retribution, and to opt for collective bargaining.  It also advises that the guiding document clearly state Starbucks’ acceptance of employees to form a union.

The report was the result of a review conducted between July and September of all information related to the union drive, with the compilation and analyses performed by an outside firm, Thomas M. Mackall LLC. The research and analysis were commissioned by Starbucks’ board after a majority of shareholders voted at a March 2023 meeting to have a third party review the labor situation.

Selected highlights of the report and access to a “non-privileged and non-confidential” shortened version of the full report were sent to all Starbucks shareholders over the signatures of Mellody Hobson, the board of director’s independent chairman, and Jorgen Vig Knudstorp, the independent director who heads the Nominating and Corporate Governance Committee.

The communication notes that the board is forming a new committee, the Environmental, Partner and Community Impact Committee, to provide “independent oversight” of the promises Starbucks will make in its revised GHRS.  

The abbreviated report was also posted on a Starbucks webpage that’s accessible to all employees.

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