Starbucks got a new CEO this week after Howard Schultz stepped down for the third time as the coffee chain’s head and a tenure marred by tussles with U.S. labor unions. Despite new CEO Laxman Narasimhan’s efforts to start off on the right foot by pledging to work at a store one day every month, unionized Starbucks baristas aren’t sold on it.
On Wednesday, unionized employees at roughly 100 Starbucks cafes went on strike to send a message to the company about its alleged union busting practices. Starbucks baristas formed their first union in December 2021, and since then, the movement has spread across the country to over 280 stores (albeit the pace has slowed in recent months). Starbucks’ Schultz was not a fan and repeatedly pushed back on Starbucks Union’s demands. Meanwhile, his successor Narasimhan told employees Thursday he plans to stay “close to the culture” at Starbucks by working a shift for half a day every month, CNBC reported.
"We're hopeful that Laxman Narasimhan will be the innovative leader Starbucks partners deserve; that he'll honor our union, bargain a fair contract, and let us help return this company to its stated mission and values," Michelle Eisen, a Starbucks employee in Buffalo, N.Y., told Fortune in a statement.
The strikes came a day before Starbucks’ annual shareholder meeting on Thursday, where investors will vote on a resolution about workers’ rights. One of the key questions Narasimhan faces is how he works to address the concerns of baristas regarding pay and working conditions. The meeting will not include members of the Starbucks Workers United and it’s unclear what Narasimhan seeks to do on the union negotiations front.
Starbucks leaves an empty chair at their Board meetings to represent workers. Thousands of workers across the US are unionizing so we can FILL that empty seat. So, in honor of Starbucks’ annual shareholder meeting today, we thought we’d remind them of how to do just that. pic.twitter.com/MzsxkMs5Ht
— Starbucks Workers United (@SBWorkersUnited) March 23, 2023
Why is Starbucks seen as “anti-union”?
During Schultz’s time at Starbucks, which has spanned about 25 years over three stints, he was vocal about social issues including race and healthcare. But when labor unions began organizing at Starbucks stores, Schultz opposed it. If anything, he tried to sideline unionized baristas. One initiative to boost the financial well-being of employees last September covered all employees—except those who worked at unionized stores.
Schultz has held that while “partners” at Starbucks had the right to unionize, the company preferred a more direct approach of engaging with them. The unions’ demands include better pay, healthcare, and paid parental leave for all employees, but the company has resisted, saying it already provides the industry’s leading benefits.
Starbucks workers make an average of about $17.50 an hour in the U.S., a company spokesperson told Fortune.
“I’m not an anti-union person. I am pro-Starbucks, pro-partner, pro–Starbucks culture,” Schultz said at a company town hall last year. “We didn’t get here by having a union.”
His reasons for opposing the union are emotional because of Starbucks’ perceived ethos as a “model employer,” people close to Schultz told the New York Times. Schultz viewed unions as an example of Starbucks losing its way as a “values-based company.”
Allegations that Starbucks quashed unionizing, including refusing to negotiate contracts and firing union leaders, led the National Labor Relations Board to file more than 80 complaints against the Seattle-based coffee giant. The company has rejected claims about being anti-union and that the NLRB is using its case to set a new standard for labor laws.
Schultz is set to testify in Congress next week after he declined a previous request in February to appear before the Senate regarding unionization campaigns at the company. Sen. Bernie Sanders (D-VT) called the former CEO to “end his illegal anti-union activities” and has led the effort to bring in Schultz to testify about Starbucks’ adherence to federal labor laws.
“While Howard Schultz is a multi-billionaire who runs a very profitable multi-national corporation he must understand that he and his company are not above the law,” Sanders said earlier this month.
Correction, March 23, 2023: This article has been changed to include the most recent data on wages as provided by Starbucks. The headline and story have also been adjusted to remove references to the company's new CEO receiving barista training after taking that role. In fact, the training happened prior to him becoming CEO.
