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WSJ: Starbucks Working on Better Benefits for Workers — but Unionized Stores Won’t Be Eligible

Starbucks CEO Howard Schultz reportedly has announced that new benefits are being developed for associates but that they can’t legally be extended to unionized locations, according to The Wall Street Journal. The move could simultaneously help the company retain workers in a volatile job market while discouraging further unionization efforts.

Schultz also has suspended billions of dollars in share buybacks to increase investments into employees and stores. He noted that the benefits are still under development and didn’t provide a timeline for their introduction.

The announcement was made during an online forum with U.S. store leaders. Starbucks’ legal counsel has found that federal law requires separately negotiated contracts for union-represented workers’ pay and benefits, which means Starbucks can’t change unionized associates’ compensation unilaterally.

“People who might be voting for a union don’t really understand, let alone the dues they are going to pay,” said Schultz in reference to separately negotiated benefits in a copy of the forum seen by The Wall Street Journal.

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However, while the company can’t unilaterally add benefits for workers, it can ask unionized workers if they want additional benefits, Cathy Creighton, Director of the Cornell University ILR Buffalo Co-Lab and a former attorney for the NLRB told The Wall Street Journal. She called discussing benefits that wouldn’t automatically extend to unionized workers is “a union avoidance technique.”

A total of eight Starbucks stores have officially unionized under the Starbucks Workers United union, and the total tally could reach 16 once all the elections are certified by the NLRB. The most recent is a Eugene, Ore. location that joined the organization in a unanimous 17-0 vote. The NLRB is slated to count votes for three more locations in the coming week, and nearly 200 of the 9,000 U.S. Starbucks cafés have petitioned to hold votes for unionization in the past year.

Schultz has been critical of the unionization efforts since he returned to the interim CEO role, calling them as an outside force trying to gain influence in the company, and has said he disagrees with their approach and message. He also reportedly said that fewer than 40% of employees have voted in the union elections at stores that have tallied unionization votes and he encouraged all workers to vote.

“No one should allow a vocal minority to control the destiny of a particular store or district or region or the entire company,” said Schultz in a message to employees, according to The Wall Street Journal.

Schultz and Starbucks have had a complicated relationship with unions over the decades, according to CNBC. The first instance came in 1984 when some workers circulated a union petition after their requests to management went unanswered. The union was ultimately decertified, but while Schultz has said that it was a single barista that led the decertification effort, Dave Schmitz, the Organizing Director for the local United Food and Commercial Workers Union in the 1980s, told Politico that Starbucks itself filed the petition.

Another unionization effort started in 2008 in the wake of the Great Recession and Starbucks successfully prevented the union from forming. However, an NLRB judge ultimately ruled that the company violated federal labor laws by illegally firing three workers who were involved with the effort.

The current unionization effort could prove stronger than those that came before. A Gallup poll from September 2021 found that 68% of Americans approve of labor unions, which is the highest share since the 71% who approved in 1965. Successful unionization efforts at companies like Amazon also may provide pro-union Starbucks workers with more leverage.

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