Vermont Sen. Bernie Sanders conducts a U.S. Senate hearing March 29, 2023. (Committee video screenshot)
WASHINGTON — Democratic senators at a hearing on Wednesday grilled the former CEO of Starbucks over allegations that the giant coffee company intimidated, harassed and fired workers who tried to form unions.
Sen. Bernie Sanders, the Vermont independent and former presidential candidate who chairs the Senate Health, Education, Labor and Pensions Committee, focused on Starbucks’ pattern of anti-union actions, such as failing to negotiate in good faith union contracts for hundreds of stores.
Nearly 300 Starbucks stores have unionized since 2021 and been certified by the National Labor Relations Board, but the company has not ratified a contract with those unions.
Sanders accused Starbucks of stalling.
“What is outrageous to me is not only Starbucks’ anti-union activities and their willingness to break the law, it is their calculated and intentional efforts to stall, stall and stall. They understand that the turnover rate at Starbucks is high,” Sanders said in his opening statement.
“They understand that if workers do not see success in getting a contract and improved wages, they may get discouraged.”
He pressed Starbucks founder and billionaire former CEO Howard Schultz about delays in ratifying union contracts, and asked him if he could commit that within two weeks, Starbucks would bargain and ratify its first union contract.
Schultz did not commit, but said he would continue to engage in good faith talks.
The National Labor Relations Board, an independent federal agency, has filed more than 80 complaints against Starbucks for violating federal labor law. Starbucks has about 9,300 company-operated stores.
Schultz agreed to appear before the committee after Sanders threatened to subpoena him. Schultz stepped down as the company’s CEO in early March, but remains as a board member.
Schultz repeated to Democratic senators that Starbucks has not broken any laws, regardless of the finding from the NLRB and rulings from federal judges. He said that employees have the right to unionize, and he and Starbucks have the right to also have a preference, which “is to maintain a direct contact” with employees.
“These are allegations, and Starbucks has not broken the law,” Schultz said. “We are confident that those (NLRB) allegations will be proven false.”
GOP defends Starbucks
Republicans on the panel took issue with Sanders attacking a business, arguing that Starbucks has created thousands of jobs. They questioned whether the NLRB was truly non-partisan.
The top Republican on the committee, Sen. Bill Cassidy of Louisiana, said the hearing was a smear campaign against Schultz, and assumes that Starbucks is guilty.
“This is not a fair and impartial hearing,” Cassidy said.
Sen. Mitt Romney, a Utah Republican, said the hearing was a conflict of interest, as Democrats tend to get campaign contributions from union groups.
Sen. Rand Paul, a Kentucky Republican, did not ask Schultz any questions but said he refused to partake in a “witch hunt that vilifies any American business, so count me out.”
Schultz was the lone witness for the first panel, and two Starbucks employees and labor law experts comprised the second panel.
Ahead of the hearing, the Democratic committee staff released a report outlining instances of Starbucks refusing to bargain with unionized employees, and engaging in an “aggressive and illegal union-busting campaign.”
Schultz said that unions have played an important role in American businesses, but in his opinion those unions were for companies that engaged in “nefarious” practices and “I can only say in my own company, based on the track record, we don’t believe we are that company.”
“Starbucks doesn’t need a union,” Schultz said.
In early March, NLRB administrative law Judge Michael Rosas found Starbucks guilty of retaliation against employees for unionizing, conducting illegal surveillance of workers who tried to unionize, reassigning union employees to other stores and over staffing stores ahead of votes to unionize, among other things.
The judge also ordered Starbucks to reinstate seven employees who were wrongfully terminated.
That case involves 32 unfair labor charges against Starbucks from August 2021 to July 2022 at 21 stores around Buffalo, New York, including the first Starbucks store to unionize.
Democrats relay constituent complaints
Sen. John Hickenlooper, a Colorado Democrat, said that he’s spoken to Starbucks workers in his state who are disappointed with the company’s reaction to employees who want to unionize.
Schultz said that he and the company “maintain a level of respect for everyone who wears the green apron.”
Schultz pushed back against many Democrats who said they have heard from their constituents who work for Starbucks that the company is cutting work hours for employees who are supportive of unions, or not allowing employees to receive tips from credit cards.
Democratic Sens. Patty Murray of Washington state, Ben Ray Luján of New Mexico and Tina Smith of Minnesota said they have heard of anti-union activities from unionized Starbucks employees in their states.
Murray said that she’s heard from several Starbucks workers in her state who say they have been denied abortion travel benefits.
“I do take offense,” Schultz said to Murray, “when you bring up things that you’ve heard that are not true.”
Smith said that Starbucks workers in her state have said that bargaining meeting have not lasted more than six minutes.
“That seems to me a failure to negotiate in good faith,” Smith said.
Schultz said that Starbucks is against virtual or online bargaining meetings and only agrees to in-person bargaining meetings. He said those meetings are ongoing.
Bloomberg reported that NLRB lawyers found that Starbucks illegally refused to bargain on Zoom.
Luján said that workers have had their hours cut so much that they’ve lost their health care benefits that Starbucks provides. In order for an employee to qualify for health care, Starbucks requires those employees to work roughly 20 hours a week.
Sen. Bob Casey, Democrat of Pennsylvania, took issue with Starbucks hiring the firm Littler Mendelson, which is the largest global employment and labor law firm that predominantly represents management.
“(It’s) one of the largest and most notoriously union busting firms in the country,” Casey said.
Casey said that under current federal law, Starbucks can write off those costs as a business expense.
“Taxpayers are subsidizing union busting,” Casey said.
Schultz said that Starbucks is following the tax law that Congress set up.
“I take offense with you categorizing me or Starbucks as a union buster, which is not true,” Schultz said.
Schultz said that all Starbucks has done is defend itself and state that the company prefers to have a direct relationship with employees, rather than unions.
Sen. Tammy Baldwin, Democrat of Wisconsin, said that Starbucks employs more than 200,000 workers.
“You can’t possibly have a direct relationship with all of them,” she said.
Baldwin said that if Starbucks wanted a direct relationship with employees, a union could provide that.
Sen. Mike Braun, an Indiana Republican, said that unions are something that larger companies are going to grapple with and said one of the best ways to avoid unions is to make sure workers are compensated well and have good benefits. He asked Schultz what Starbucks employees make.
Schultz said that on average, workers make $17 an hour, and a manager salary is about $80,000.
“Even $17 an hour, that’s not a living wage,” Braun said. “Any large corporation shouldn’t necessarily be bragging about $15 to $20 wages. When you look at the typical structure of a large company, that should probably be $20-plus.”
Starbucks employees testify
Sanders asked two of the witnesses who worked for Starbucks if the company had engaged in union-busting activities.
Maggie Carter, who is a Starbucks barista in Knoxville, Tennessee, said that workers had to sit through meetings from management from local branches in meetings that did not encourage unions.
She said one of the managers who came to the store to conduct a meeting “gave multiple partners COVID in this meeting, and we had to shut down for five days.”
Jaysin Saxton of Augusta, Georgia, said he was fired for his involvement in organizing a union at his store.
He said that a management team arrived while they were unionizing to make their store more efficient.
“That making our store more efficient resulted in us constantly coming into work with everything moved around,” he said. “So every single day, we had to relearn where everything was.”
Sanders asked Saxton what he thought about Schultz denying anti-union tactics.
“They have definitely engaged in anti-union activities,” Saxton said.
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