"Starbucks already provides workers with the industry's best wages and treatment."
Howard Schultz, the founder of Starbucks who has been embroiled in allegations of union suppression, appeared before a U.S. congressional hearing on the 29th (local time) to deny allegations of labor law violations by Starbucks. While expressing a willingness to negotiate with the current union, Schultz also reaffirmed his stance that Starbucks does not need a union.
At the hearing of the U.S. Senate Health, Education, Labor, and Pensions Committee, Schultz stated, "We have done everything to respect the rights of partners (Starbucks employees) to join a union according to the law," adding, "Conversely, we have preferred to continuously communicate the company's vision to people without breaking the law."
Schultz, who has maintained a 'no-union management policy,' repeatedly emphasized at the hearing that Starbucks respects workers' rights to unionize but already offers the industry's best wages and benefits. According to him, Starbucks' average hourly wage starts at $17.50, while the minimum wage in Vermont is $13.18.
He said, "I believe unions have played an important role in American companies for many years. In the 1950s and 1960s, unions worked on behalf of people in companies that were not treated fairly," adding, "We do not believe Starbucks is such a company. We do not do evil things. We put people first."
In particular, Schultz reiterated that among Starbucks' approximately 250,000 U.S. employees, only about 3,400 have chosen to join a union. He added, "About 1% of partners are choosing a different approach (union membership) under their legal rights." According to the National Labor Relations Board (NLRB), since the end of 2021, at least 292 out of 9,000 company-operated Starbucks stores in the U.S. have voted on union decisions.
Starbucks has recently been embroiled in controversy over union suppression. The union claims that the company has taken retaliatory measures such as transferring workers who led union formation or closing unionized stores. There have also been repeated criticisms that wage discrimination between non-union and union workers is being openly practiced. In this regard, the NLRB ruled earlier this month that workers' basic rights were violated due to various unfair labor practices at 21 locations in Buffalo, New York, and ordered the reinstatement of dismissed workers.
Senator Bernie Sanders, who led the hearing, strongly criticized, saying, "The NLRB has ruled on hundreds of labor law violations including the firing of union members and illegal closure of union stores by Starbucks," and questioned, "The fundamental issue we face is whether there is a judicial system that applies to all of us, or whether billionaires (Schultz) and large corporations (Starbucks) can break the law without punishment."
On the other hand, Starbucks maintains that employee dismissals were not due to union activities but due to violations of internal policies. At the hearing, Schultz denied labor law violations and confirmed that he is appealing related charges. He also expressed displeasure at some lawmakers calling him a 'billionaire,' saying, "I grew up in federally subsidized housing, and my parents never owned a home. I have billions of dollars, but it is what I earned, not what was given to me."
Senator Sanders, classified as a progressive, is regarded as a key figure in bringing Schultz to the hearing regarding the union suppression allegations. Initially, Starbucks tried to send other executives instead of Schultz, citing his stepping down as interim CEO. Sanders said on the day, "Although Schultz stepped down as interim CEO, he remains on the company's board and played an important role in setting the company's (no-union) policy."
Some Republican lawmakers expressed support for Starbucks and Schultz, arguing that Starbucks is being unfairly portrayed as a bad company by the Democrats despite creating millions of jobs. Republican Senator Rand Paul criticized the hearing as "a hearing convened to attack a private company."
Meanwhile, following Schultz, Starbucks' newly appointed CEO Laxman Narasimhan also hinted at no-union management in a recent local interview, stating, "I believe direct relationships with partners are the best approach." Narasimhan was appointed Starbucks' new CEO in September last year and joined in October of the same year. Although originally scheduled to take the CEO position on the 1st of next month, he officially assumed the role earlier on the 20th. Having undergone 40 hours of barista training and worked in stores during the handover period, he stated in an email to employees shortly after his appointment, "I will work in stores for half a day every month."
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