Starbucks Dealt Massive Legal Blow in Key Union City

The coffee giant denies any anti-union activity, but the Labor Board disagrees

Over the course of the last year, Starbucks  (SBUX) – Get Free Report employees in nearly 240 stores across the U.S. have formed unions. Headlines have seen protests in several locations as workers vie for representation and negotiations regarding pay, benefits, and other rights. According to claims made by employees, the mega-popular coffee chain has been resistant to talks so far. 

Starbucks’ CEO Howard Schulz has always claimed that the company isn’t strictly anti-union. But Schulz has been open about his belief that the pay and benefits provided by the prolific café are sufficient and require no union negotiations. As more stores seek to unionize, several employees have claimed various anti-union tactics exercised by the company, including the withholding of raises, company-sanctioned anti-union messages, and even termination of employees seeking to form a union.

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Protests and online criticism increased last September when the company announced that it would offer financial education for its employees–the ones who weren’t in a union, anyway. Understandably, many employees saw this move as a retaliatory policy. Schulz told shareholders that the company was unable to negotiate with unionized (or unionizing) employees, and has even gone as far as to suggest that these negotiations were illegal.

Starbucks’ union troubles are so great that the U.S. Labor Board has gotten involved in multiple cases against the company


U.S. Labor Board Rules in Favor of Starbucks’ Activists

On Monday, a couple of activist employees who were terminated from a Starbucks in Philadelphia received some vindication thanks to a decision handed down by the U.S. Labor Board. The board ordered the coffee company to “cease and desist” what appear to be a series of union-busting techniques incited against its staff. The decision also ordered that the company offer two employees reinstatement that includes back pay. 

Starbucks has continued to deny any allegations of union-busting. In an emailed statement, Starbucks said, “We disagree with the decision and are considering all options to obtain a full legal review of the matter.” The company will likely appeal the decision in a federal court, but no announcement of intention has been made yet.

Starbucks Starts Off 2023 Strong

Despite its legal and labor struggles, Starbucks has had a strong and successful year so far. Though the company has struggled to mimic its seasonal success after the hustle of the Halloween and winter holidays, Starbucks still celebrated better-than-anticipated revenue gains in its most recent quarterly earnings call.

Consolidated net revenues were up 8% — which was pleasing to Schultz, who is serving as the interim CEO for the coffee company.

“Starbucks’ performance in Q1 demonstrates the strength and resilience of our business and accelerating demand for Starbucks Coffee all around the world,” he told investors during the call. The results came “despite challenging global consumer and inflationary environments, a soft quarter for retail overall, and the unprecedented, COVID-related headwinds that unfolded in China in Q1.”

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