Starbucks’ Howard Schultz defends union stance before Senate

Longtime Starbucks CEO Howard Schultz was sharply questioned before the Senate Health, Education, Labor and Pensions Committee on Wednesday as he defended the company’s actions during an ongoing union campaign.

U.S. Senator Bernard Sanders, a Vermont independent who has been a vocal supporter of Starbucks labor organizers, accused the company of delaying efforts to reach a deal with workers who voted to unionize for the first time in late 2021 . He also told federal courts and administrative judges that the National Labor Relations Board has found Starbucks guilty of, among other things, firing union organizers and illegally closing unionized stores.

“The fundamental question we face today is whether we have a legal system that applies to all, or whether billionaires and large corporations can break the law with impunity,” Sanders said.

Schultz denied that the company broke the law and said Starbucks is appealing those charges. Schultz said Starbucks respects workers’ rights to unionize but believes the company already offers its workers industry-leading wages and benefits.

He said the average starting wage at Starbucks is $17.50, while the minimum wage in Vermont is $13.18.

“I think unions have played an important role in the American economy for many years. In the 1950s and 1960s, unions generally worked for people in a company that didn’t treat people fairly,” Schultz said. “We don’t think we’re that type of company. We do no evil. We put our people first.”

Sanders has been looking for Schultz’s testimony for months. Schultz had tried to sidestep the hearing by implying that others at the company were more involved in labor matters.

But Sanders argues that Schultz, who stepped down as interim CEO last week but remains on the company’s board, was instrumental in setting company policy. Schultz appeared before the committee under threat of a subpoena.

According to the NLRB, at least 293 of Starbucks’ 9,000 company-owned Starbucks stores in the US voted to unionize. Starbucks Workers United, the working group organizing the stores, has yet to reach a contractual agreement with a Starbucks store.

Schultz said only 3,400 of Starbucks’ 250,000 US employees chose to join a union.

“About 1% of partners have chosen a different approach, as is their legal right,” he said.

The union effort has been controversial. Earlier this month, a federal labor judge found the company had violated labor laws “hundreds of times” during a union campaign in Buffalo, New York. The company is appealing. Federal judges have also forced Starbucks to reinstate the fired unionists.

Schultz, who ran Starbucks from 1987 to 2000 and from 2008 to 2017, returned as interim CEO last April. Starbucks’ new CEO, Lazman Narasimhan, told The Associated Press that he also believes Starbucks would function better without unions.

“I continue to believe that a direct relationship with our partners is the best way forward,” said Narasimhan.

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