Aug 25, 2022 - Economy

Starbucks accused of withholding benefits as union-busting tactic

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Photo: Joe Raedle/Getty Images

The National Labor Relations Board says Starbucks is breaking the law by withholding pay raises and benefits from unionizing workers, while giving those benefits to other, non-union employees.

Why it matters: Labor leaders say it's part of a pattern of union-busting tactics used by the Seattle-based coffee giant, after more than 220 Starbucks stores nationwide voted to unionize in recent months.

Driving the news: Late Wednesday, the National Labor Relations Board office in Seattle filed a complaint saying Starbucks engaged in unfair labor practices by not awarding the same benefits to all employees.

Details: The company awarded higher wage increases to employees at stores that hadn’t unionized or weren’t in the process of unionizing, according to the complaint.

  • Starbucks also gave non-union employees additional perks such as faster sick-time accrual, a less restrictive dress code and more access to tips, the complaint says.
  • Per the complaint, the discrepancy discouraged workers from becoming union members, violating U.S labor laws that ban employers from interfering in union organizing campaigns.

The other side: Starbucks officials have said that unionized stores are required by law to negotiate their own contracts with the company, and that their employees can’t be awarded benefits outside of those negotiations.

  • "Wages and benefits are 'mandatory' subjects of the collective bargaining process," the company said in a written statement.

Context: Howard Schultz stepped back in as CEO in part to set a new tone with Starbucks workers.

  • But Schultz is a key target of Wednesday's complaint, which accuses him of telling employees they wouldn’t be eligible for a new slate of employee benefits if their stores unionized.

The big picture: The union push at Starbucks stores comes amid a larger labor movement around the country, Axios' Hope King wrote earlier this year.

  • The National Labor Relations Board is seeing the highest level of union organizing in 10 years, CNN reports.

What's next: The labor board is asking Starbucks to award back benefits to employees who voted to unionize, as well as issue a letter of apology, among other remedies.

  • A hearing on the matter is scheduled before an administrative law judge with the National Labor Relations Board on Oct. 25.
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