The Starbucks corporation may be forced to reopen a location at the Santa Monica Pier that closed in 2022 following a ruling by federal regulators this week accusing the company of trying to undermine unionization efforts across the country.
Regional Director Ronald K. Hooks in the National Labor Relation Board’s (NLRB) Region 19 (Seattle) Office issued a complaint on December 13 against Starbucks Corporation consolidating several cases along the West Coast. The complaint alleged that Starbucks closed 23 stores (including the Ocean Front Walk & Moss store in Santa Monica and five other stores in Los Angeles), eight of which had Workers United certified as bargaining representative, to discourage membership in a labor organization. The complaint further alleges that Starbucks closed the stores without prior notice to the union and without affording the union an opportunity to bargain about the decisions and that a manager told employees they could not “borrow” shifts at other stores while the employer negotiated with the union about the closures.
The NLRB General Counsel is seeking an order for several remedies, including immediate reopening of all 23 stores and offers of reemployment for unit employees; bargaining in good faith with the eight unionized stores; make-whole relief for affected employees, including for loss of pay and other benefits, search-for-work and interim employment expenses, and other direct or foreseeable financial harms; electronic distribution of a notice to all employees nationwide; a notice reading by a senior management official and electronic distribution of a video recording of that reading; and training for managers and supervisors.
Starbucks closed the Ocean Front Walk store in 2022 after about two years of operation at that location citing an inability to provide a safe environment for staff and customers. It was one of 16 stores throughout the country the company said it was closing for safety concerns as the company reimagined the future of the business. At the time, a Starbucks spokesperson said the closure was not the result of any one specific incident or even a set number of incidents over time but rather an accumulation of challenges related to substance abuse, homelessness and economic upheaval caused by the pandemic. In a statement, the company said the closing stores were no longer spaces where the company could provide employees, partners and customers with the experience they expect and are accustomed to.
The company has denied its actions were related to union efforts saying it routinely closed and opened stores as decided by market conditions.
Starbucks recently released a study conducted by independent labor expert Thomas Mackall that concluded the company did not engage in anti-union actions. Starbucks shareholders had demanded the study following two years of protracted labor complaints against the corporation. While Mackall concluded Starbucks should do more to improve communication with unions and revise its Global Human Rights Statement, he said there was no evidence the company interfered with unionization efforts.
Last week, the company said it’s committed to bargaining with its unionized workers and reaching labor agreements next year, a major reversal for the coffee chain after two years fighting the unionization of its U.S. stores.
In a letter to Lynne Fox, the president of the Workers United union, Starbucks Chief Partner Officer Sara Kelly said the current bargaining impasse between the two sides “should not be acceptable to either of us.” Kelly asked to restart bargaining in January.
“We will set as an ambition and hopeful goal the completion of bargaining and the ratification of contracts in 2024,” Kelly wrote in the letter.
In a statement distributed by Workers United, Fox said she is reviewing the letter and will respond.
“We’ve never said no to meeting with Starbucks. Anything that moves bargaining forward in a positive way is most welcome,” Fox said.
Workers United said the last bargaining session between the two sides was May 23.
Saturday marks the two-year anniversary of a Starbucks store in Buffalo, New York, voting to unionize. It was the first company-owned store to join a union in more than three decades.
Since then, at least 370 company-owned U.S. Starbucks stores have voted to unionize, according to the National Labor Relations Board. There are about 9,600 company-owned Starbucks stores in the U.S.
Workers at 19 U.S. Starbucks stores have filed petitions with the NLRB to decertify the union as the bargaining representative at their stores, but none of those stores has voted on whether to remove the union. The NLRB can delay a decertification vote if an employer refuses to bargain.
Unionizing workers say they’re seeking higher pay, more consistent schedules and more say in issues like store safety and workload during busy times. Seattle-based Starbucks has said its stores run more efficiently if it can work directly with its employees and not through a third party.
But the process has been contentious. Twice, federal courts have ordered Starbucks to reinstate workers who were fired after leading unionization efforts at their stores. Regional offices of the National Labor Relations Board have issued 120 complaints against Starbucks for unfair labor practices, including refusal to bargain and reserving pay raises and other benefits for non-union workers.
In October, Starbucks sued Workers United in federal court, demanding it stop using the name Starbucks Workers United for the group organizing its workers after that group posted a pro-Palestinian message on social media. Workers United countersued, saying Starbucks defamed the union by suggesting it supports violence. Starbucks said Friday that lawsuit is proceeding.
Starbucks said last week that its changing stance reflects its wish to support all of its employees. In her letter to Fox, Kelly pledged that the company would respect bargaining participants and refrain from disparaging conduct or language.
But Starbucks may also be shifting its position for business reasons. It reported record revenue in its fiscal fourth quarter, which ended in September, and its full-year revenue climbed nearly 12% to $35.9 billion.
But the company’s stock has fallen 10% since Nov. 16, when 5,000 workers at more than 200 unionized Starbucks stores went on strike. Placer.ai, an analytics company, said that after a strong fall, U.S. holiday visits to Starbucks appear to be down from a year ago.
The company may also be trying to head off an effort by the Strategic Organizing Center, a labor group, to elect three pro-union candidates to Starbucks’ board of directors next year.
Now that the complaint has issued, the NLRB Regional Office will attempt to facilitate a settlement with the parties. If no settlement can be reached, the case is scheduled to go before an NLRB Administrative Law Judge (ALJ) on August 20, 2024. The ALJ would then issue a decision, which could be appealed to the Board.
Dee-Ann Durbin from the Associated Press contributed to this report.
matt@smdp.com
