With wage increases set to begin Monday at Starbucks coffee shops across the U.S., labor organizers are calling on the coffee giant to extend the benefits to unionized stores as well without going through the bargaining process.
The request comes after Starbucks announced in May that it would raise workers’ wages and add other benefits, such as credit card tipping, later this year. But the Seattle-based coffee chain said it would not offer the improved benefits to unionized store workers because it must go through negotiations to make those changes.
In a letter to Starbucks CEO Howard Schultz obtained by CNBC, Workers United said the company can legally offer benefits to unionized store employees without bargaining, as long as the union agrees. The letter points to other company-wide benefits announced in recent months, including faster accrual of sick time and medical travel reimbursement for employees seeking abortions or gender reassignment care.
“Workers United refuses to stand by while Starbucks cynically promises new benefits only to non-union workers and withholds them from our members,” states Workers United President Lynne Fox’s letter to Schultz last month.
The letter notes that the union is not waiving any other bargaining obligations Starbucks has under federal law.
About 200 Starbucks stores have unionized so far, while 40 have voted not to unionize, according to the National Labor Relations Board. Starbucks has approximately 9,000 locations in the United States
When contacted about the union’s request, Starbucks pointed to a fact sheet on its website that reads: “The law is clear: Once a store is unionized, no changes in benefits are allowed without collective bargaining. class in good faith”.
The company’s site says workers have access to Starbucks benefits that were in effect when the union petition was filed, but that any subsequent changes to wages, benefits and working conditions must be negotiated.
Labor lawyers say the case could end up before a National Labor Relations Board administrative law judge.
“Once a union has been certified, an employer is required to negotiate with that union before making any changes to the terms and conditions of employment,” said Stephen Holroyd, an attorney at Jennings Sigmond who has represented unions and worked for the NLRB.
But he said the union greenlighting benefits without bargaining changes the situation and could argue that Starbucks is withholding benefits because of its organizing drive.
Daniel Sobol, a Stevens & Lee attorney who has represented companies in union cases, said the NLRB and federal courts disagree on the issue.
“Yes [ benefit enhancements are] done just to calm unionization, that could be a problem,” he said. But with employers adjusting wages in the inflationary environment, he said Starbucks may not be required to give raises to unionized employees.
Gabe Frumkin, an attorney for Starbucks Workers United, said it’s clear the benefits are being offered in response to the union push. He said Workers United has filed two charges related to Starbucks’ wage and benefit announcements for non-union stores and is considering more options.
Catherine Creighton, director of Cornell University’s School of Industrial and Labor Relations in Buffalo, New York, said the law requires companies to notify the union of a new benefit and the opportunity to negotiate it. But he said that, “if the union says they have no objection, the employer can absolutely grant them that benefit.”
The wage increases that will take effect this week include an increase of at least 5 percent, or a move to 5 percent above the market rate, whichever is higher, for employees with at least two years of experience. Employees with more than five years of experience get a raise of at least 7 percent or move to 10 percent above market rate, whichever is higher. The raises are on top of a hike announced earlier this month that brings wages to a minimum of $15 an hour nationally. This increase is available to stores that did not start organizing before it was announced.
Starbucks has said it plans to spend $1 billion on wage increases, improved training and store innovation in fiscal 2022. When Schultz returned to his role as CEO for the third time, he suspended the company’s buyback program ‘company to invest in workers and stores.