As salary hikes begin to take effect at Starbucks locations throughout the country on Monday, labor activists are requesting that the coffee company also provide the benefits to outlets that are unionized without engaging in a formal negotiating process.
The request follows Starbucks’ May announcement that it will increase employee pay and offer more perks like credit card tipping before the end of the year. The Seattle-based coffee business, however, asserted that it would not extend the improved benefits to staff members at locations that are part of a union since such changes need negotiating.
Workers United said that as long as the union agrees, the corporation can lawfully provide benefits to workers at unionised locations without engaging in bargaining, according to a letter to Starbucks CEO Howard Schultz acquired by CNBC. The letter lists additional company-wide perks that have recently been disclosed, such as quicker sick leave accrual and medical travel reimbursement for staff members who need abortion or gender-affirming care.
“Workers United refuses to stand by while Starbucks cynically promises new benefits only to non-unionized workers and withholds them from our members,” in a letter to Schultz last month, Workers United president Lynne Fox makes this claim.
The letter states that Starbucks is not relinquishing any other legal obligations it may have to engage in collective bargaining with the union.
The National Labor Relations Board states that 40 Starbucks locations have chosen not to unionise, whereas about 200 Starbucks locations have so far done so. In the US, there are about 9,000 Starbucks outlets.
In response to inquiries on the union’s proposal, Starbucks cited a fact sheet on its website that stated: “The law is clear: once a store unionizes, no changes to benefits are allowed without good faith collective bargaining.”
According to the corporate website, employees have access to Starbucks perks that were in place at the time the union petition was filed, but any alterations to pay, benefits, or working conditions after that must be negotiated.
According to labour lawyers, an administrative law judge of the National Labor Relations Board may hear the matter.
“Once a union has been certified, an employer is obligated to bargain with that union before making any changes to terms and conditions of employment,” NLRB employee and Jennings Sigmond attorney Stephen Holroyd who has represented unions in the past remarked.
He said, however, that the union’s approval of the benefits without engaging in bargaining alters the circumstances and that it may claim that Starbucks is refusing to pay the benefits because of the union’s organising drive.
The NLRB and federal courts have different opinions on the matter, according to Daniel Sobol, a lawyer with Stevens & Lee who has defended businesses in union lawsuits.
“If [benefit enhancements are] done solely to chill unionizing, that could be an issue,” he said. He added that Starbucks might not be required to pay the raises to unionised workers given that firms are altering wages in the inflationary environment.
It is obvious that the perks are being provided in reaction to the union effort, according to Gabe Frumkin, an attorney with Starbucks Workers United. He claimed that Workers United is still reviewing its options after filing two complaints related to Starbucks’ announcements of pay and benefits for non-unionized stores.
According to Catherine Creighton, dean of Cornell University’s Industrial and Labor Relations School in Buffalo, Additional York, businesses must inform unions of new benefits and provide them with an opportunity to bargain over them. However, she said that “if the union says they have no objection, then the employer can absolutely give them that benefit.”
For workers with at least two years of experience, the pay increases this week include an increase of at least 5%, or a move to 5% over market rate, whichever is higher. Employees with more than five years of experience receive raises of at least 7%, moving up to 10% over market rate, or the higher of the two. The raises come on top of a previously announced rise that will take effect this month and bring national minimum wages to $15 per hour. Stores that did not begin organising before it was publicised are eligible for that increment.
During its fiscal 2022, Starbucks has stated that it expects to invest $1 billion in pay increases, better training, and retail innovation. In order to invest in employees and stores, Schultz paused the company’s repurchase programme when he took on his position as CEO for a third time.
