Labor council accuses Starbucks of wage inequality

A regional office of the National Labor Relations Board says Starbucks is violating U.S. labor law by withholding pay increases and other benefits from stores that voted to unionize.

The Seattle Labor Board’s office filed a complaint against Starbucks late Wednesday. The complaint is based on charges filed by Workers United, the union trying to organize Starbucks’ 9,000 US stores.

The complaint adds to a long-standing paper trail in the acrimonious relationship between Starbucks – which opposes unions – and Workers United. More than 220 American Starbucks stores have voted to unionize since late last year.

The complaint is one of at least 20 that NLRB’s regional offices have filed against Starbucks for alleged unfair labor practices. Starbucks has also filed complaints against the board and the union. Last week, the company asked the NLRB to halt union elections entirely, as it has evidence that a regional office has not coordinated properly with union officials. A decision in that case is pending.

In the case filed Wednesday, the NLRB said Starbucks violated labor law by offering only non-union stores to non-union stores, including increased training, career advancement opportunities, expanded gratuities and looser dress codes.

Starbucks announced the $200 million in additional employee pay and benefits in May after a series of meetings with employees across the country. At the time, Starbucks interim CEO Howard Schultz said U.S. labor law requires union shops to negotiate their own contracts with the company.

“We don’t have the same freedom to make these improvements in unionized locations,” Schultz said in a conference call with investors.

Starbucks reiterated that argument in a statement Thursday.

“Wages and benefits are mandatory subjects of the collective bargaining process,” the company said. It rejects the union’s argument that it could offer wage and benefit increases to union shops at any time.

But in its complaint, the NLRB’s regional office said Starbucks’ action violates laws that prohibit interference with workers’ right to form a union.

The complaint demands reimbursement from the affected employees. It would also require Schultz to hold an employee meeting and read out a statement explaining employees’ right to organize.

Unless Starbucks and the union reach a settlement, the complaint will be heard by an NLRB administrative judge at a hearing on Oct. 25. Once a decision is made, either party can appeal to the full National Labor Relations Board in Washington.

Maggie Carter, a Starbucks barista from Knoxville, Tennessee, praised the NLRB’s complaint, saying the company shouldn’t have denied increases at a time of skyrocketing inflation.

“I look forward to the day when Howard Schultz has to apologize to us for violating our rights and provide the benefits he so harshly denied us,” Carter said in a statement distributed by Workers United.

Dan Cornfield, a sociology and political science professor at Vanderbilt University who has studied labor unions, said the store-by-store organization currently taking place at Starbucks and other large companies — such as Trader Joe’s and REI — is a relatively new phenomenon. so there are not many examples of non-union workers being treated differently from union workers within the same company.

But the practice of non-union companies offering their employees higher wages and benefits to avoid labor organization has a long history. In the 1950s, he said, non-union companies quickly expanded wages and benefits to match the union car industry.

“It’s a very powerful strategy, and it works to the extent that the main concerns of workers are wages and benefits,” Cornfield said. “But once the concerns of non-union workers get into the realm of non-economic issues, such as health and respect, it becomes a little more challenging for a large company to try to get ahead of the union.”

In 2019, the full National Labor Relations Board ruled that employers are free to treat unionized and non-union workers differently, but only if the employer has no anti-union motive.

In that case, the board ruled in favor of the pharmaceutical company Merck, which gave non-union workers an extra paid vacation. Merck, like Starbucks, argued that it couldn’t give union workers another vacation without going through the negotiation process.