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Starbucks chief talks of possible benefits for nonunionized employees


Howard Schultz outside the Starbucks at Pike Place Market in Seattle in 2011. Mr. Schultz recently returned for his third tour as the company’s chief executive.

By Noam Scheiber


Starbucks’ interim CEO, Howard Schultz, told a weekly meeting of store managers earlier this week that benefits he was considering expanding for nonunion employees would not immediately apply to the company’s newly unionized workers.


The pronouncement, just more than one week into Schultz’s third tour as CEO, came after workers in at least 16 company-owned stores voted to unionize over the past six months, although the National Labor Relations Board has not yet certified all the results.


Since Schultz returned as CEO, Starbucks has fired at least three union supporters, who a spokesperson said had violated company policies. Schultz also suspended stock repurchases so the company would “have the opportunity to invest more in our partners and stores,” he said in a letter to employees Sunday, and he has held meetings with employees in several cities to ask their ideas for improving the company.


Two appearances became contentious when Schultz was confronted by pro-union employees.


A Starbucks spokessperson said the comments on benefits in the meeting Monday arose during a question-and-answer session, when Schultz was asked how new benefits the company was considering might fit in with the union campaign.


The spokesperson, paraphrasing Schultz, said the CEO responded that when introducing a benefit, “we are not permitted by law to unilaterally give that benefit to the stores that voted for union while they are in collective bargaining.”


The spokesperson said that the topic of benefits arose from employees’ input at recent sessions with Schultz, and that the Starbucks chief had not provided examples of benefits he was considering or when they might be offered.


The comments were reported earlier Wednesday by The Wall Street Journal.


Experts on labor law said that companies were allowed to discuss the difference in benefits that union and nonunion employees received but that they could not make an implied promise that employees would receive better benefits if they chose not to unionize.


Matthew Bodie, a former lawyer for the labor board who teaches law at St. Louis University, said the comments could be interpreted as undermining the so-called laboratory conditions required for coming union elections if they had been public, but not necessarily if they were expected to remain confidential. Bodie said the comments could still amount to evidence of an intent to bargain in bad faith by seeking to give union employees a worse deal than nonunion employees, which is also considered an unfair labor practice.


Wilma Liebman, a former chair of the National Labor Relations Board, said the timing of the potential benefits were questionable, since it was unclear whether they would have been added if not for the union campaign.


While it is difficult to know with certainty whether Schultz crossed a legal line without reviewing his precise comments, which the company did not provide, the spokesperson said Schultz had merely been stating what the law required.


Schultz has been outspoken in his opposition to the union. In his letter Sunday, he suggested that many employees who supported unionization were “colluding with outside union forces” and wrote that he did not believe that “conflict, division and dissension — which has been a focus of union organizing — benefits Starbucks or our partners.”


He added that fewer than 1% of more than 200,000 Starbucks employees in the United States had voted to unionize and that roughly 65% of employees eligible to vote in a union election had not taken part.

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