Updated Dec 14, 2023 - Business

Starbucks accused of illegally shutting stores over union organizing

Starbucks workers are striking due to overwhelming demands and understaffing at many of the stores in New York, USA, on November 16, 2023.

Outside a Starbucks store in New York. Photo: Victor M. Matos/Thenews2/NurPhoto via Getty Images

The National Labor Relations Board called on Starbucks on Wednesday to immediately reopen 23 stores that workers allege were shut in response to union organizing activities.

Why it matters: The closure of the union and non-union stores marks the latest of several cases involving the coffee chain giant and the Starbucks Workers United union, which has on several occasions accused the company of illegally interfering with workers' rights.

Driving the news: The Seattle regional office of the NLRB issued a complaint alleging that Starbucks shut the stores without prior notice to the union and without affording Workers United with an opportunity to bargain about the decisions.

  • The complaint also alleged that a manager told employees they could not "borrow" shifts at other stores while the employer negotiated with the union about the closures.
  • Eight of the 23 stores the NLRB identified in the latest case as closing had unionized.
  • A Starbucks spokesperson told the New York Times that every year "as a standard course of business, we evaluate the store portfolio" and generally open, shut or change stores.
  • The firm opened "hundreds of new stores" in 2022 and shut over 100, with roughly 3% of these unionized, per the NYT, which first reported on the alleged federal law violations.

What we're watching: The NLRB General Counsel is seeking an order for offers of re-employment for affected employees and reimbursement for loss of pay, along with the stores reopening for business.

The big picture: The NLRB case came as Starbucks published an independent assessment of the company's labor practices, which found "no evidence of an 'anti-union playbook' or instructions or training about how to violate U.S. laws or suggesting surreptitious means of interfering with employees' freedom to choose unionization or not."

  • However, it did find that the company could improve how it communicates with employees on collective bargaining and train staff better to understand workers' rights.

Between the lines: Starbucks came out squarely against labor movements under previous CEO Howard Schultz, who spoke out against what he called "the threat of unionization."

  • But after Laxman Narasimhan became CEO in March, he spoke of the need to "'care for 'customer-facing staff,'" per Reuters.

Of note: Sara Kelly, Starbucks's vice president and chief partner officer, last Friday said in a letter to Lynne Fox, president of Starbucks Workers United's parents union Workers United, said she wanted to restart bargaining.

  • "We collectively agree, the current impasse should not be acceptable to either of us," she wrote.

What they're saying: "This complaint is the latest confirmation of Starbucks' determination to illegally oppose workers' organizing," said Mari Cosgrove, a Seattle Starbucks employee and Starbucks Workers United member in an emailed statement Wednesday.

  • "It adds to the litany of complaints detailed in the company's own report released this morning," she added.
  • "If Starbucks is sincere in its overtures in recent days to forge a different relationship with its partners, this is exactly the kind of illegal behavior it needs to stop."
  • Representatives for Starbucks did not immediately respond to Axios' request for comment.
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