Wall Street Times

Howard Schultz shares his thoughts on unionization

Howard Schultz
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Howard SchultzIt wasn’t always like this, but Starbucks has evolved to become one of the top coffee companies in the United States.

In 2008, the coffee industry experienced a financial crisis that destroyed every other sector of the economy.

Howard Schultz, the former CEO of Starbucks from 1987 to 2000, had returned to help the company.

He was CEO of Starbucks for nearly 10 years until handing over the reins to Kevin Johnson, after being responsible for bringing the company back on its feet.

Johnson did, however, depart office in March 2022, paving the way for Schultz’s return.

Last year, he dealt with a looming unionization problem, another Starbucks catastrophe.

An ominous sign for Starbucks

In February, Howard Schultz spoke with CNN’s Poppy Harlow on the evolution of the union, its links to China, and the US economy.

Schultz made it plain that his return to the corporation had nothing to do with the union’s activities.

He did agree, though, that the labor movement foreshadowed future changes at Starbucks.

“It’s my belief that the efforts of unionization in America are in many ways a manifestation of a much bigger problem,” said Schultz.

“There is a macro issue here that is much, much bigger than Starbucks.”

The first Starbucks chain to unionize voted five months before his return, in December 2021.

Moreover, Howard Schultz said that he will serve as the company’s acting CEO for the third and last time.

Even still, before returning to the company, Schultz was apprehensive about the unionization movement.

A month before the first Starbucks chain voted, he sent an open letter to its “partners,” as the company calls its employees.

“No partner has ever needed to have a representative seek to obtain things we all have as partners at Starbucks.”

“I am saddened and concerned to hear anyone thinks that is needed now.”

A fight for rights

Notwithstanding the letter, unionized workers continue to battle for a variety of reasons, including set schedules, protecting benefits for part-time workers, and more.

The union also wants the company to legally accept the principles of fair elections in order to protect employees’ ability to organize without fear of retaliation.

After resuming his duties as CEO, Howard Schultz’s animosity against the union has become greater.

Around that period, the campaign for unionization became increasingly fierce.

The union leadership accused the business of refusing to engage in official discussions, jeopardizing their benefits, and participating in union-busting efforts.

Starbucks has denied the allegations.

Charges from both sides

Starbucks was accused of hundreds of unfair labor practices by the union.

In reaction, the coffee firm filed unfair labor charges against them, claiming that the union was hindering negotiations.

The NLRB uncovered many instances in which the company inappropriately harassed and dismissed union members.

According to a recent court order, Starbucks must stop the unlawful practice of firing union supporters.

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The corporation claims that the action was unwarranted and that it strives to follow the law.

Senator Bernie Sanders and members of the Senate Health, Education, Labor, and Pensions Committee have asked Howard Schultz to testify on the company’s compliance with labor laws at an upcoming hearing.

Starbucks’ chief public affairs officer, AJ Jones II, will attend the hearing after Schultz declined the invitation.

The movement’s progress

The NLRB certified in mid-February that 282 shops voted in favor of unionization, while only 56 did not.

Just a small number of the over 9,3000 Starbucks franchises owned by the American corporation have chosen to unionize.

According to Howard Schultz, data suggest that the majority of Starbucks partners are satisfied with the current state of things.

In any event, the union sees growth as a demonstration of worker support.

“The fact that Starbucks workers are continuing to organize and win shows just how much workers need and desire a union,” said the union.

Starbucks has built a solid image as a forward-thinking company over the years.

Howard Schultz had an important part in generating the perception by giving employees with:

  • Company stock
  • Employee health insurance
  • Tuition reimbursement

When preparing to depart his position as CEO, his reputation is jeopardized, in part due to the company’s animosity against the union.

Despite the criticism, Howard Schultz is not giving up.

Lost trust

When Howard Schultz returned to Starbucks in 2022, he conducted a “listening tour” with employees to help him develop a new business plan.

He said that the company had grown unorganized.

“I’ve talked to thousands of our Starbucks partners,” Schultz said.

“I was shocked, stunned to hear the loneliness, the anxiety, the fracturing of trust in government, fracturing of trust in companies, fracturing of trust in families, the lack of hope in terms of opportunity.”

According to Schultz, unionizations affect American corporations because employees are more upset with the situation than the company.

Image source: The New York Times