Instead, Schultz testified nine days later, under threat of subpoena, before the US Senate Committee on Health, Education, Labor and Pensions, chaired by Senator Bernie Sanders, I-Vt. a much less pleasant experience than receiving a gold watch.
Sanders’ questions and Schultz’s testimony focused on how Starbucks has treated its employees who wanted to unionize, including allegations of anti-union activity, the most interesting work history of the past 18 months.
In Schultz’s public communications, he has always portrayed himself as what we would have called “third way” capitalists in the 1990s. While he proudly grew his profits as a self-proclaimed businessman, he also viewed his employees as partners and did everything possible to offer health care, 401(k) plans, and free college education to those who worked at least 20 hours a week at his stores.
UNIONING IN TEXAS: Taylor: Starbucks’ unionization is a story to watch in 2023
With Schultz out, it’s worth catching up on how the Labour-Starbucks conflict is playing out.
In January 2023, two Houston-area Starbucks stores and one Dallas-area store voted to unionize. No new unionization petitions have been filed since December and the number of union stores in Texas stands at 15.
Nationwide, 290 of Starbucks’ roughly 9,000 locations — about 3 percent — have unionized, as was the case in December.
One factor that could work in Starbucks’ favor is the passage of time, especially since collective bargaining between Starbucks and Workers United — the union the employees have joined — has still not started. The same sticking point as last fall, whether to meet in person or allow video conferencing, divides the union and the company even before they deal with labor issues. Each side claims the other is impeding the method of collective bargaining, but the balance of pain seems to be on the union’s side, as without a negotiated deal they have no significant gains from unionizing. Meanwhile, the company has withheld extended benefits from unionized store workers, claiming they cannot be granted to workers at those stores pending a collective bargaining agreement.
The usual roles
While negotiations between Starbucks and the union have not taken place, Workers United has inundated the company with allegations of unfair labor practices. That includes 34 in Texas as of a year ago, with nine complaints in the first three months of 2023. Nationwide, more than 500 allegations of labor law violations have been filed with the National Labor Review Board. For its part, Starbucks fired back in Texas with five complaints against the union in 2023.
The NLRB found Starbucks responsible for hundreds of wrongdoings in dealing with unionized workers in an administrative ruling in March. The company was ordered to reinstate laid-off workers and compensate workers. The NLRB also restricted the company and warned it not to do anything that could be construed as anti-union.
THREATENED SA WORKERS: Labor Committee: Starbucks threatened, interrogated employees over union — fired one in San Antonio
Such activity spurred Sanders to call his Senate committee hearing with Schultz.
It was disappointing to me that everyone at the hearing played their usual roles: the pro-labor Democrats, the self-made billionaire, and the pro-ownership Republicans. We didn’t get much out of the groundbreaking third-way thinking.
Sanders, who played the workers’ lunatic friend, said Starbucks ran “the most aggressive and illegal anti-union campaign in our country’s modern history.”
Those are some battle words.
Schultz played the aggrieved, bright-eyed billionaire who doesn’t like being called a billionaire, which he called an “unfair” nickname.
“My parents never had a house. I came out of nowhere I thought my whole life was based on making the American dream come true,” he said. “Yes, I have billions of dollars. I deserve it. Nobody gave it to me.”
So Schultz’s feelings were hurt at the hearing.
Republican Senator Rand Paul of Kentucky called the hearing a “witch hunt.” Republican Senator Bill Cassidy of Louisiana said, “These hearings are anything but a fair and impartial trial.”
FIGHT AGAINST THE UNION: Taylor: Union, management are vying for the soul of Starbucks
At least Sen. Mitt Romney, R-Utah, acknowledged the strange alliances and backlashes involved in defending Schultz and Starbucks when he alluded to the former CEO’s various thoughts about one day running for president as a Democrat.
“I recognize at the outset,” Romney said, “that a non-coffee drinking Mormon conservative defending a Democratic nominee for president of what is perhaps America’s most liberal corporation is ironic.”
Who wins? what is lost
At this point, it seems like Schultz and Starbucks are winning this war. New unionization in stores has stalled. Schulz denied any wrongdoing. Unionized employees feel harassed, attacked and discouraged by Starbucks’ response.
The company has made more than $20 billion in profits in each of the past three years. Narasimhan, the new CEO, does not want to do worse than his predecessor on the profit side.
Can a capitalism that equates workers’ rights with customers and profits accomplish anything at the enterprise scale of 9,000 locations and 200,000 employees in the United States? I still think this is the central question the Starbucks labor movement has been asking itself for the past 18 months.
If Schultz and Starbucks management still gets the most points, the labor movement won’t be the only loser. The ideal for which Schultz and Starbucks have fought for decades is also losing.
Can capitalism be both profitable and good for workers?
If you win the war, you may destroy the battlefield of ideas on which you stood.
As Schultz stepped down as CEO for the third time and received a Senate grill as a parting gift, does he feel like he’s won? What does fairness mean in his eyes?
Michael Taylor is the author of The Financial Rules for New College Graduates and host of the podcast No Hill for a Climber.
[email protected] | twitter.com/michael_taylor
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