money ‘A speed that nobody had ever seen’: The rapid rise of unionized Starbucks stores
Two Buffalo-area Starbucks stores successfully voted to unionize on December 9, 2021, kicking off a flurry of elections at other Starbucks locations nationwide over the past six months.
“This campaign was not like other campaigns — this was moving at a speed that nobody had ever seen before,” Michelle Eisen, a Starbucks barista in Buffalo who has coached baristas from Kentucky to Hawaii, told Yahoo Finance. “Once I was told that, I think that gave me a little bit of like, ‘Oh, okay, I guess we have to be prepared for what this is going to become.'"
So far, 280 Starbucks locations across 35 states have followed Buffalo filing their petition with the National Labor Relations Board (NLRB) while backed by a subsidiary of the Workers United labor union. The NLRB reported that union election petitions were up 57% between Oct. 1 and March 31 compared to the previous year.
“The pandemic really heightened that awareness for a lot of workers, particularly a lot of workers who were in the non-union setting and realized that with a union, at least they would be able to have that collective voice to speak together in the interest of the employees, working conditions,” Risa L. Lieberwitz, professor of labor and employment Law at Cornell University, told Yahoo Finance in a phone interview.
As of June 7, 129 locations have voted to unionize while 21 stores have voted against it while 11 votes are as yet undetermined. (Yahoo Finance's vote status tally is based on NLRB case records and varies slightly from NLRB press releases.)
The pace of votes is increasing: According to the NLRB on May 31, there were an additional 119 elections ordered or in progress and 56 ballot counts slated for this week and next week alone.
There were 86 certified Starbucks union votes as of June 7, according to the NLRB data, meaning that the 79 unions formed can now negotiate with the coffee giant.
'We are fighting Howard Schultz's ego'
Pro-union workers are fighting for issues including more sway in certain company decisions, more affordable benefits, seniority pay, and recognition for workers' right to organize.
"We are fighting Howard Schultz's ego," Eisen said, referring to the three-time Starbucks CEO who returned to the company in early April on an interim basis. "That's what I've come to realize... he really stands by the company that he built, and he thinks it really is the best thing since sliced bread. And it's really hard for someone to come to you and tell you that your life's work is maybe not as good as you think it is."
Eised added that "the goal of this campaign is to grow together with the company, to work together with the company, with the people who know this company better than anybody."
The union drive is particularly rare in the food and beverage industry, which has traditionally been among the least unionized workplaces in the country. Only 1.2% of all workers in the sector were unionized in 2021, according to the Labor Department, and other high-profile union pushes at other large companies have not yet seen the same success.
“It's always hard to say exactly what sparks organizing and [those] sort of social movements,” Lieberwitz said. “We also saw that people in different workplaces have become more aware lately of the fact that organizing can take place in multiple settings.”
Other factors contributing to the recent wave of organizing can be attributed to a labor-friendly administration in the White House, a new Democratic majority on the NLRB, and a tight labor market – which have emboldened workers to demand more from their employers.
At the same time, the number of stores considering unionization is a small fraction of Starbucks' nearly 9,000 U.S. company-operated locations that employ nearly 230,000 workers (also known as partners).
'We did make some mistakes during COVID'
The organizing effort was first launched in August when three Buffalo stores filed petitions seeking representation by a union.
Workers there reported captive audience meetings, one-on-one meetings, store shutdowns, closures, re-modelings, and out-of-town officials unlawfully intimidating and surveilling workers to deter them from voting for unionization. The pro-union workers also reportedly alleged that Starbucks transferred in and hired additional employees at two of the three stores to dilute union support before the Buffalo vote count.
Schultz visited Buffalo, New York in November 2021 to present a case against unionizing and generated criticism after he drew comparison between Holocaust prisoners and the coffee company’s mission. And upon returning as CEO, Schultz decried "the threat of unionization" while also acknowledging that the coffee giant made some mistakes during the pandemic.
"We did make some mistakes during COVID when we were not at our best," Schultz said, according to a transcript verified by the company. "We're going to fix all that. We're going to restore trust, restore belief. And we're going to do everything we can to ensure the fact that our partners understand the most important elements of everything Starbucks has done and will do is elevating the partner experience."
Overall, Starbucks seems to have learned a few lessons.
"Stores that were more prone to unionization were stores that had lower levels of stabilization," AJ Jones, Starbuck's senior vice president of global communications and public affairs, told Yahoo Finance in a phone interview. "That usually meant that there was a high turnover rate in terms of partners in the store, and also meant there was a high rate [of turnover] in reference to store managers."
Starbucks previously argued that votes should happen on a district-wide basis as opposed to individual stories, but the NLRB did not accept that argument. More recently, Starbucks began filing labor complaints of its own and promising improved benefits for non-unionized Starbucks stores.
"We do not have the same freedom to make these improvements at locations that have a union or where union organizing is underway," Schultz said on Starbucks’ Q2 2022 earnings call, adding that federal law "prohibits us from promising new wages and benefits at stores involved in union organizing."
At the same time, union supporters argue, the National Labor Relations Act (NLRA) prohibits employers from promising benefits to employees on the condition that they reject a union.
"I respect the fact that for Workers United, it becomes an inconvenient situation for them because now they have to be able to justify why a person should be sitting in a unionized store when other stores are able to be able to immediately access benefits," Jones said. "But that's the fight that they chose... to be across the table, to negotiate benefits and compensation versus them being alongside of us."
Dani is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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