Starbucks illegally withheld raises from union workers, labor board says

The NLRB seeks back payments and benefits for unionized workers since May and to require Schultz to read a statement to workers about their union rights. The board, which is tasked with enforcing labor laws that protect union rights, said Starbucks’s denial of benefits and raises to union workers was intended to discourage union organizing

But Starbucks denied that. “We’ve been clear in that we are following NLRB rules when it comes to unilaterally giving benefits,” Reggie Borges, a Starbucks spokesman, wrote in an email.

The company stated in a news release in July that legally it cannot change benefits or wages without bargaining with a union once one is in place. “Partners still have access to all Starbucks benefits already in place when the petition was filed, but any changes to your wages, benefits and working conditions that Starbucks establishes after that time would not apply to you and would have to be bargained,” the statement says.

Union activists were thrilled that the labor board had weighed in. “This is a historic triumph for democracy and the rule of law that a billionaire CEO must apologize to employees for abusing them and violating their rights as well as making them whole,” said Richard Bensinger, a lead organizer of the Starbucks Workers United campaign.

Starbucks has tried to fend off the union effort as organizers have built momentum. Schultz announced in May that the company would raise pay and double training hours at its more than 10,000 corporate-owned stores. But he said those changes would not apply to recently unionized stores or stores in the process of unionizing, where workers had filed for union elections.

“We do not have the same freedom to make these improvements at locations that have a union or where union organizing is underway,” Schultz stated on an earnings call at the time.

In August, nonunion Starbucks workers who had been employed since May 2 saw their wages increase to $15 an hour or by 3 percent, whichever was higher. Employees with between two and five years of experience received a raise of at least 5 percent, or an increase to 5 percent above the starting rate in their market, whichever was greater. Nonunion baristas with more than five years of experience received raises of at least 7 percent or 10 percent above the starting rate in their market, whichever was greater.

This year, Schultz stated that employees who had not sought union benefits would receive access to the chain’s relaunched coffee expertise program, known as “Coffee Masters.” Nonunion stores would see new investments in equipment and technology and enhanced tipping options for customers. Further communications stated that the dress code would be updated to allow more flexibility on piercings and tattoos, but only for only nonunion workers. According to the labor board, these benefits have been withheld from unionized workers since May.

The complaint alleges that the company has also withheld faster sick time accrual benefits, career growth opportunities and expanded credit card tips from workers at unionized stores.

The labor board says that not extending these benefits and wage increases to union workers violated the National Labor Relations Act, which protects workers’ rights to engage in union activity free from interference, coercion and retaliation.

“I’m not surprised by Howard Schultz’s comments, but I’m pleasantly surprised that there’s action being taken by the NLRB,” said Gianna Reeve, a Starbucks barista and union organizer in Buffalo who did not receive a raise in August because she works in a unionized store.

The labor board is also requesting that Starbucks provide a copy of all payroll records, time cards and personnel reports so that it can analyze the amount of back pay owed to workers. The remedy outlined by the complaint would require that the company send apology letters to all affected baristas and conduct a training for managers and supervisors on workers’ rights and labor law.

Starbucks can try to settle the case. Otherwise, an administrative law judge will hold a hearing on the matter Oct. 25.

The NLRB has also been challenging the company’s response to the union drive in federal district court. Last week, a federal judge ordered that Starbucks reinstate seven fired baristas involved in union organizing at a store in Memphis. Starbucks Workers United says the coffee chain giant has fired more than 75 union leaders since December.