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Starbucks has unlawfully withheld pay rises from union workers, the Labor Department says

Starbucks has unlawfully withheld pay rises from union workers, the Labor Department says
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Starbucks has wrongfully withheld wages and benefits from thousands of unionized baristas, the National Labor Relations Board claimed in a complaint Wednesday.

The complaint comes amid a campaign by the coffee chain and its interim CEO Howard Schultz to curb unionization efforts at its stores across the United States. More than 230 locations have voted to join Starbucks Workers United since late 2021, leading to a nationwide surge in unionization.

The NLRB has been demanding back payments and benefits for unionized workers since May and has required Schultz to read workers a statement of their union rights. The board, charged with enforcing labor laws to protect union rights, said Starbucks’ denial of benefits and pay rises to union workers was intended to discourage unionization

But Starbucks denied it. “We have made it clear that we follow NLRB rules when it comes to unilaterally granting benefits,” Reggie Borges, a Starbucks spokeswoman, wrote in an email.

The company stated in a press release in July that it is not legally possible to change benefits or wages without negotiating with a union, once one exists. “Partners will still have access to any Starbucks benefits that were in place at the time the petition was filed, but any changes to your wages, benefits, and working conditions that Starbucks makes after this date will not apply to you and would need to be negotiated.” , the statement says.

Union activists were delighted that the labor committee had interfered. “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 and making them whole,” said Richard Bensinger, one of the lead organizers of the Starbucks Workers United campaign.

Starbucks has tried to fend off union efforts as organizers have gained momentum. Schultz announced in May that the company would increase wages and double training hours at its more than 10,000 company-owned stores. However, he said these changes would not apply to recently unionized stores or stores in the process of unionization where workers had requested union elections.

“We don’t have the same freedom to make these improvements in locations where there is a union or where unionization is ongoing,” Schultz said in a pay call at the time.

In August, non-union Starbucks workers employed since May 2 saw wages rise to $15 an hour, or 3 percent, whichever is greater. Employees with two to five years of experience received a pay rise of at least 5 percent or a raise to 5 percent above the starting rate in their market, whichever amount was higher. Non-union baristas with more than five years of experience received raises of at least 7 percent or 10 percent above the base rate in their market, whichever is greater.

That year, Schultz declared that employees who had not applied for union benefits would be given access to the chains Relaunch of the coffee expertise program, known as “Coffee Master.” Non-union stores would see new investments in equipment and technology and improved tipping options for customers. Other notices said the dress code would be updated to allow more flexibility with piercings and tattoos, but only for non-union workers. According to the Labor Department, these benefits have been withheld from unionized workers since May.

The complaint alleges that the company also withheld faster sick pay, career opportunities and expanded credit card tips from workers in unionized stores.

The Labor Board says failure to extend these benefits and pay increases to union workers violates the National Labor Relations Act, which protects workers’ rights to engage in union activities free from interference, coercion and retaliation.

“I’m not surprised by Howard Schultz’s comments, but I’m pleasantly surprised that the NLRB is taking action,” said Gianna Reeve, a Starbucks barista and union organizer in Buffalo, who didn’t get a raise in August for working at one unionized store.

The Department of Labor also requires Starbucks to provide a copy of all payslips, time cards and personnel reports so that it can analyze the amount of back pay owed to workers. The remedy outlined in the complaint would require the company to send letters of apology to all baristas affected and to conduct training for managers and supervisors on labor rights and labor law.

Starbucks can try to settle the case. Otherwise, an administrative judge will hold a hearing on the matter on October 14. 25

The NLRB has also challenged the company’s response to the union campaign in federal district court. A federal judge last week ordered Starbucks to be reinstated seven fired baristas involved in unionizing at a Memphis store. The coffee giant has sacked more than 75 union leaders since December, according to Starbucks Workers United.

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