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Starbucks weighs in on the best benefits for non-union workers

Starbucks Chairman and CEO Howard Schultz speaks at the annual shareholder meeting in Seattle, Washington on March 22, 2017.

Jason Redmond | AFP | Getty Images

Starbucks’ campaign to discourage baristas from unionizing could include offering new benefits exclusively to non-union workers.

This week, CEO Howard Schultz told US store executives that he is reviewing the coffee chain’s benefits program for its employees. However, employees working at company-owned stores who voted to unionize will not be eligible for these improved benefits, Schultz said.

Schultz cited federal labor law and the advice of the company’s legal counsel, saying it would be illegal to expand benefits unilaterally with unions in the equation.

Wall Street Magazine first reported his comments.

Under federal labor law, employers must negotiate with the union representing their workers when it comes to changing wages, benefits, or other conditions of employment. But companies can still ask unionized employees if they want additional benefits.

American airlines, for example, are heavily unionized and offer union workers bonuses or extra pay to help with staff shortages, incentives that go beyond normal contract negotiations.

Starbucks spokesman Reggie Borges told CNBC that Schultz and other company executives will continue to share key insights from these employee hearings as they go.

In late March, ahead of Schultz’s return to the company, Starbucks Workers United said it expects the company to announce new perks to curb the spread of union pressure at the Starbucks coffee shop. A Starbucks spokesperson did not respond to a request for comment at the time, but Schultz appeared to confirm that strategy when he announced last week that he would suspend share buybacks to invest back in the company’s employees and stores.

About 200 Starbucks-owned establishments have filed for unionization in recent months. To date, 18 stores have voted to unionize with Workers United, with only one cafe so far voting against.

As the union movement gains momentum, Workers United alleges that the company engaged in anti-union activities, including firing organizers, reducing barista hours at union centers and other forms of retaliation. In March, the National Labor Relations Board filed a complaint against Starbucks, alleging it violated federal labor law by firing organizers in Phoenix.

In his week and a half at the helm, Schultz had already waged a more aggressive anti-union campaign than previous CEO Kevin Johnson. Schultz mentioned the union in public letters and speeches with workers, portraying the desire for organization as divisive and unnecessary.

“While not all partners who support unionization collude with outside union forces, the critical point is that I do not believe that the conflicts, divisions, and divisions that have been the focus of unionization benefit Starbucks or our partners,” he wrote in a letter to employees on Sunday.

Starbucks shares rose more than 1% on Wednesday amid broader market gains. The market value of the company is about $93.3 billion.

— Leslie Josephs of CNBC contributed to this report.


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