Something close to panic has set in among top Starbucks executives as baristas at some 233 coffee shop locations (and counting) have filed for union certification votes with the National Labor Relations Board (NLRB). As of this writing, thirty-one of those stores have voted to unionize, often by overwhelming margins; on Monday, the votes at stores in New Jersey and Baltimore were unanimous in favor of the union.
All of this has prompted Starbucks founder Howard Schultz to leave retirement — for the second time — and take a hands-on role as CEO and high-profile union adversary. The release last week of a leaked video calls to thousands of store managers offers a revealing glimpse of the Schultz mentality, the Starbucks anti-union strategy, and the challenges Workers United, the barista union, will face in the weeks and months ahead.
Schultz bought a small Seattle coffee chain in the 1980s, rebranded it, and successfully expanded it to more than 17,000 company-operated locations worldwide. A billionaire and philanthropist, Schultz has a big ego. He has written four books (most business memoirs) and explored a run for president, as either a Democrat or an independent, three times. Schultz thinks Starbucks has a unique corporate culture, for which he is largely responsible.
He is the classic example of the proprietary capitalist who sees any threat to his authority as a personal front. As Schultz told store managers in the leaked video, he “knows in his heart that I have always put partners first.” (“Partners” is the corporate name for Starbucks workers.) He therefore expects deference and applause. If that is not forthcoming, it must be because of “an outside force that is trying to disrupt the future of our company.”
Of course, anti-unionism is not limited to billionaire founders of iconic companies. But when outsize egos become engaged in the fight, they often let the cat out of the bag in terms of both corporate vulnerabilities and strategies.
The first thing that became clear in the leaked video is that Starbucks store managers are unreliable union busters. Indeed, both Schultz and Rossann Williams, the executive vice president who spent months in Buffalo trying to stop the successful union drive there, were practically pleading with store managers to get behind the corporate effort. The entire video was directed at these supervisors, urging them to take a vigorous role in defending the company and denigrating Workers United.
Store managers are really first-line supervisors — foremen and forewomen — who were often ordinary baristas themselves. Some can be autocrats, but an equal number identify with workers while feeling constant pressure from above to keep sales up and expenses — mainly hours of labor — under control.
In the 1940s, when union power reached its apogee in the coal, auto, and steel industries, tens of thousands of foremen created their own independent unions. Top executives went apoplectic, which is why the 1947 Taft-Hartley Law excluded these supervisory employees from coverage under the 1935 National Labor Relations Act.
Since store managers are unprotected by labor law, they can be coerced into being the cat’s paw of the corporation’s top union busters.
In the case of Starbucks, Schultz instructed store managers to round up as many employees as possible to vote in the next set of NLRB-supervised elections. This does not reflect some newfound democratic ethos at the company. It is an effort to “pack” the vote with baristas just technically working at the store or newly recruited and with workers otherwise marginal to the workplace.
The fact is that unionism arises when a committed core of dedicated workers wants it, but from the Flint sit-down strikes onward, such workers have often been a “militant minority,” to use the phrase coined by labor historian David Montgomery. It is frequently only after a union demonstrates its potency and capacity to wart managerial retaliation that it achieves clear majority backing within the workforce.
And this brings us to yet another anti-union strategy that Howard Schultz outlined in his talk to Starbucks managers. In the next few weeks, he said, Starbucks is going to raise wages and improve benefits for the vast majority of its 350,000 employees, but those increases will only go to baristas in stores where no union has been certified and no contract negotiations are in the off. The NLRB has long held that when an employer is “bargaining in good faith,” it may not “bypass” the union’s negotiating representatives and thereby subvert the collective bargaining process by making unilateral changes in the conditions of employment.
If Schultz, Starbucks management, and their union-busting law firms were to actually engage in good-faith bargaining, then this would not be a problem, because wages and benefits at unionized Starbucks stores would soon reach or exceed those at nonunion outlets. But one can be certain that Starbucks will delay and subvert any collective bargaining negotiations to demoralize those baristas who work in unionized shops and discourage those thinking about organizing elsewhere. This will be technically illegal, but the penalties for violating labor law in the United States are very weak.
Meanwhile, the health insurance and other benefits that Starbucks now offers and that Schultz promises to improve come with a very large fishhook. They kick in only if a barista works twenty hours each week. In the recent grocery store contract that the United Food and Commercial Workers (UFCW) signed with several hundred Southern California supermarkets, all workers, including part-timers, are guaranteed twenty-eight hours of work each week, up from twenty-four in the last contract. This means they receive the same benefits as full-time employees, plus a substantial wage increase.
But no such hours guarantee exists at Starbucks. There, baristas must work at least twenty hours a week to receive benefits. Yet many of those seeking unionization insist that store managers manipulate hours to leave some workers just shy of this threshold.
It is not just a question of Starbucks saving money by cutting hours. The power of a store manager to offer or deny baristas those crucial twenty hours constitutes the club by which the company enforces its authoritarian rule and terrorizes the workforce. In recent months union leaders have had their hours cut on numerous occasions, not only depriving them of benefits but encouraging them to quit in a not-so-subtle fashion. Thus, employment guarantees similar to those negotiated by the UFCW will undoubtedly be a central demand of unionized Starbucks workers. This strikes at the heart of the dystopian Starbucks business model and the authoritarian power of its management.
For the union to win at Starbucks, it will take more than a string of NLRB election victories, however inspiring they have been. These wins must be backstopped by massive public support, a series of short but disruptive work stoppages, and the most aggressive sort of NLRB sanctions against Starbucks. All this will not only mobilize even more Starbucks employees but threaten the carefully crafted coffee shop “culture” of which Howard Schultz remains so proud. At that point corporate executives will see fair dealing with their unionized employees as the only viable road forward.