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Starbucks is weighing better benefits for nonunion workers


Starbucks Chairman and CEO Howard Schultz speaks at the Annual Meeting of Shareholders in Seattle, Washington on March 22, 2017.

Jason Redmond | AFP | Getty Images

Starbucks’ campaign to dissuade baristas from unionizing could include extending new benefits exclusively to nonunion workers.

The company’s CEO, Howard Schultz, told U.S. store leaders this week that he is reviewing the coffee chain’s benefit program for its workers. However, employees who work at company-owned stores that voted to unionize would be ineligible for those improved benefits, Schultz said.

Schultz cited federal labor law and advice from the company’s legal counsel in saying it would be illegal to extend benefits unilaterally with unionized locations in the equation.

The Wall Street Journal first reported his comments.

Under federal labor law, employers have to bargain with the union that represents their workers when it comes to changes in compensation, benefits or other terms of their employment. But companies can still ask unionized employees if they want additional benefits.

U.S. airlines, for example, are highly unionized and have offered union employees bonuses or extra pay to help with staffing shortages, incentives that fall outside of regular contract negotiations.

Starbucks spokesman Reggie Borges told CNBC that Schultz and other company leaders will keep sharing key learnings from these employee listening sessions as they happen.

In late March, ahead of Schultz’s return to the company, Starbucks Workers United said it expected the company would announce new benefits to curb the union push spreading across Starbucks cafes. A representative for Starbucks did not respond to a request for comment at the time, but Schultz seemingly confirmed that strategy when he announced last week that he would suspend stock buybacks to invest back into the company’s workers and stores.

Roughly 200 of Starbucks’ company-owned locations have filed the paperwork to unionize in recent months. To date, 18 stores have voted to unionize under Workers United, with only one cafe so far voting against.

As the union push gains momentum, Workers United has alleged that the company has engaged in union-busting activity, including firing organizers, cutting barista hours at unionizing locations and other forms of retaliation. In March, the National Labor Relations Board filed a complaint against Starbucks, alleging that it violated federal labor law by firing organizers at a Phoenix location.

In his week and a half back at the helm of the company, Schultz has already been waging a more aggressive campaign against the union than previous CEO Kevin Johnson. Schultz has mentioned the union in public letters and speeches with workers, painting the push to organize as divisive and unnecessary.

“And while not all the partners supporting unionization are colluding with outside union forces, the critical point is that I do not believe conflict, division and dissension – which has been a focus of union organizing – benefits Starbucks or our partners,” he wrote in a letter to employees Sunday.

Shares of Starbucks closed up more than 1% on Wednesday alongside broader market gains. The company has a market value of roughly $93.3 billion.

— CNBC’s Leslie Josephs contributed to this report.



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