Howard Schultz violated labor law by telling employee ‘if you’re not happy at Starbucks, you can go work for another company’

By CNN Newsource

Published October 3, 2024 2:09 PM

By Ramishah Maruf, CNN

New York (CNN) — Starbucks’ Howard Schultz, who was interim CEO at the time, broke federal labor law in 2022 by telling a California barista who raised concerns about unionization that “if you’re not happy at Starbucks, you can go work for another company.”

A decision by the National Labor Relations Board on Wednesday said Schultz’s statement was an unlawful, coercive threat.

The decision underscores the fractious relationship Starbucks has had with organized labor as more and more workers at its stores unionize.

In 2022, when Schultz was interim CEO, he attended a company event in Long Beach, California, to address and improve working conditions at Starbucks stores. Barista Madison Hall attempted to bring up what she described as the benefits of unionization and Starbucks’ alleged history of unfair labor practices, according to the NLRB.

Schultz asked her, “Why are you angry at Starbucks?” He said the event wasn’t the place to discuss union issues, then made the remark about working elsewhere. According to the administrative law decision, he “had an angry expression on his face.” The NLRB decision upholds an administrative law judge’s decision in October 2023.

In a statement, Starbucks said it disagrees with the board’s decision. “Our focus continues to be on training and supporting our managers to ensure respect of our partners’ rights to organize and continuing to make progress in our discussions with Workers United,” a company spokesperson said in a statement Thursday.

Though Schultz stepped down in March 2023 after his third time serving as CEO, he remains tied to the company. When he retired from the Starbucks board of directors last September, the company gave him the title of “lifelong chairman emeritus.”

“We note that the judge identified the Respondent’s highest official, interim CEO Schultz, as a ‘legendary leader,’ a status that would exacerbate the coercive nature of Schultz’s statement,” the board decision said.

Since the first Starbucks location in Buffalo, New York, unionized in 2021, the coffee chain has been involved in hundreds of labor disputes over its alleged union-busting tactics. One case, Starbucks v. McKinney, reached the Supreme Court in June over seven employees who were fired after they attempted to unionize. The Supreme Court sided with Starbucks.

An NLRB administrative law judge previously said that Starbucks had displayed “egregious and widespread misconduct” in its dealings with employees involved in efforts to unionize Buffalo stores, including the first location to unionize. Starbucks repeatedly sent high-level executives into Buffalo-area stores in a “relentless” effort, the judge wrote, which “likely left a lasting impact as to the importance of voting against representation.”

Starbucks said in a statement at the time that it is “considering all options to obtain further legal review,” adding that “we believe the decision and the remedies ordered are inappropriate given the record in this matter.”

On October 1, the 500th Starbucks location voted to unionize, in Washington state, according to the union.

The NLRB on Wednesday ordered Starbucks cease and desist from threatening to fire employees for unionizing activities and said it must post a notice of employee rights at all of its Long Beach stores.

“We’re happy to see the NLRB continue to stand up for workers and our legal right to organize. At the same time, we’re focused on the future and are proud to be charting a new path with the company,” Michelle Eisen, Starbucks Workers United national organizing committee co-chair and bargaining delegate, said in a statement to CNN Thursday.

Danielle Wiener-Bronner contributed to this report.