Business

Starbucks CEO Howard Schultz has a history of fighting unions.

A union poster hangs on a lamppost outside the Starbucks office on Broadway and Denny’s in the Capitol Hill neighborhood of Seattle, on March 22, 2022.

Toby Scott | sopa images | Light rocket | Getty Images

Howard Schultz’s first week at the helm of Starbucks ended with seven more company-owned cafes unionizing, bringing the total to 16 cafes.

But would-be Starbucks union members will likely have to brace for a tougher response from the company. Schultz, who oversaw the transformation of the coffee giant from a small Seattle chain to a global giant, has a long history of anti-union campaigning.

It’s still too early to tell if Schultz will adopt a new course of action at a time when workers are feeling buoyed by rising wages and a tough job market, but his recent actions and words may offer some clues.

On Monday, he announced that the company would suspend share buybacks to invest in its stores and employees, but on the same day at the town hall with workers, he reiterated his belief in the company’s team-based approach to workforce management.

“I am not against unions. I am for Starbucks, for partners, for the Starbucks culture,” Schultz said. “We didn’t come here because of the union.”

Organizers and labor experts alike expect the Schultz-led company to ramp up efforts to quell the onslaught of workers.

“I think they are likely to redouble their anti-union efforts and do the best they can,” said John Logan, professor of labor at San Francisco State University.

Starbucks, under former CEO Kevin Johnson, has already faced allegations of union crackdown by Workers United, which has filed dozens of complaints with the National Labor Relations Board. The NLRB also accused the company of cracking down on union staff in Phoenix. Starbucks denied the allegations.

Johnson publicly held to a non-interventionist attitude, leaving much of the effort to North American President Rossanne Williams. But when the union campaign kicked off in Buffalo, New York, last year, it was Schultz, not Johnson, who came to talk to the barista.

To date, more than 180 company-owned locations have petitioned for union elections, though that’s still a small fraction of Starbucks’ total U.S. presence of nearly 9,000 stores. Of the places where the votes were counted, only one cafe opposed unionization.

Union opposition to Schultz

Former Starbucks Chairman and CEO and 2020 US presidential candidate Howard Schultz visits Fox & Friends at Fox News Channel Studios on April 2, 2019 in New York City.

Stephen Ferdman | Getty Images

Schulz’s anti-union stance goes back to his earliest days at the company. In his 1997 book Pour Your Heart Into It: How Starbucks Built the Company One Cup at a Time, co-authored with Dori Jones Young, Schultz recounted the company’s first union battle when he was CMO.

The growing company, then run by CEO Jerry Baldwin, bought Peet’s Coffee and Tea in 1984. According to Schultz, integrating the acquisition took effort as corporate cultures clashed. He wrote that some Starbucks workers were beginning to feel left out and so they circulated a union petition after their requests to management went unanswered. The union won the vote.

“This incident taught me an important lesson: there is nothing more valuable than a trusting relationship between a company and its employees,” Schultz wrote. “If people feel that management is distributing rewards unfairly, they will feel alienated. Once they begin to distrust management, the company’s future is in jeopardy.”

Soon after, Schultz left Starbucks to start his own chain of coffee shops, Il Giornale, and its early success led to him acquiring Starbucks and merging the two companies. In “Pour Your Heart Into It,” Schultz said that the barista “single-handedly” successfully worked to revoke the certification of the Starbucks Retail Workers Union.

“When so many of our people supported dessertification, it was a sign to me that they are beginning to believe that I will do what I promised,” he wrote. “Their mistrust began to dissipate and their morale grew.”

But employees who worked at Starbucks at the time, and later union representatives, opposed this version. AT 2019 Politico article Linked to Schultz’s political hopes, Dave Schmitz, organizing director of the local Amalgamated Food and Trade Union in the 1980s, said Starbucks had filed a petition to drop the certification.

At the time, Schultz did not respond to a request for comment on the Politico report.

On top of that, Schultz often portrayed the benefits of the coffee shop chain, such as health insurance for part-time workers, as his own idea, as part of a larger belief that treating employees well would benefit the company as a whole. The benefits were part of the union’s contract with Starbucks, according to Politico.

“I was convinced that under my leadership, employees would understand that I would listen to their concerns. If they believed in me and my motives, they would not need a union, ”wrote Schultz.

Schultz stepped down as the company’s CEO in 2000 before returning again in 2008 as the financial crisis turned Starbucks’ business around. While he meanwhile worked as chief global strategist, Manhattan’s baristas tried to unionize. Starbucks successfully foiled the attempt, but in 2008 an NLRB judge ruled that the company had violated federal labor laws.

During his second tenure as CEO in 2016, Schultz reportedly called a Californian barista who circulated a union petition, successfully discouraging him from organizing his work colleagues.

Two years later, Schultz retired from an active role at Starbucks. The following year, he publicly considered running for president as an independent centrist, but his potential candidacy was not enthusiastic.

The pandemic has changed the situation

While Schultz was gone, Starbucks and its baristas weathered the pandemic, changing the way many workers view their jobs and their own strengths. In August 2021, Starbucks workers in Buffalo filed a petition to unionize with the NLRB under Workers United.

Now that Schultz is back in the spotlight, attitudes towards unions have changed dramatically. A September 2021 Gallup poll shows 68% of Americans approve of unions, the highest since a 71% approval rating in 1965.

Every union victory at Starbucks gives momentum to the union movement, and other high-profile victories in Amazon and REI have further spurred this movement.

“[Starbucks and Amazon] I think the old anti-union campaigns that have always worked in the past will work this time, but I think in some cases they are finding that it is no longer the case,” said Logan, a professor of labor. I think any of these union campaigns would have been successful two or three years ago, but something has changed.”


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