Starbucks Chairman and CEO Howard Schultz spoke at the annual shareholders’ meeting in Seattle, Washington on March 22, 2017.
Jason Redmond AFP | Getty Images
Starbucks’ campaign to dissuade baristas from uniting may include extending new benefits exclusively to non-union workers.
The company’s chief executive, Howard Schultz, told U.S. store managers this week that he was reviewing the café chain’s compensation program for its employees. However, employees working in company-owned stores who voted for unionization will not be eligible for these improved benefits, Schultz said.
Schultz cited federal labor law and the company’s legal councils, saying it would be illegal to extend benefits unilaterally with union members in the equation.
The Wall Street Journal was the first to report his comments.
Under federal labor law, employers must negotiate with the union that represents their workers when it comes to changes in compensation, benefits or other conditions of their work. But companies can still ask union members if they want additional benefits.
American airlines, for example, are strongly united in unions and offer union employees bonuses or extra pay to help with staff shortages, incentives that are beyond regular contract negotiations.
Starbucks spokesman Reggie Borges told CNBC that Schultz and other company leaders will continue to share key knowledge from these employee listening sessions as they happen.
In late March, before Schultz’s return to the company, Starbucks Workers United said it expected the company to announce new benefits to curb union pressure on Starbucks cafes. A Starbucks spokesman did not respond to a request for comment at the time, but Schultz appears to have confirmed the strategy when he announced last week that he would stop buying back shares to invest back in the company’s workers and stores.
Approximately 200 of Starbucks’ companies have filed for union in recent months. To date, 18 stores have voted in favor of unionization within Workers United, with only one cafe voting against.
As union pressure is gaining momentum, Workers United claims the company has been involved in dismantling unions, including firing organizers, cutting baristas’ working hours at unions, and other forms of retaliation. In March, the National Labor Council filed a lawsuit against Starbucks, alleging it violated federal labor laws by firing organizers on the spot in Phoenix.
In the week and a half ago, Schulz led a more aggressive campaign against the union than former CEO Kevin Johnson. Schultz mentions the union in public letters and speeches with workers, describing the pressure to organize as divisive and unnecessary.
“While not all partners who support trade unionism are in secret agreements with external trade union forces, the critical point is that I do not believe that conflict, division and disagreement – which have been at the heart of trade union organization – are beneficial to Starbucks or our partners, “he wrote in a letter to employees on Sunday.
Shares of Starbucks closed more than 1% on Wednesday, along with wider market gains. The company has a market value of approximately $ 93.3 billion.
– Leslie Josephs of CNBC contributed to this report.