Senators on Wednesday grilled former Starbucks CEO Howard Schultz over widespread allegations of illegal union-busting tactics at the coffee chain under his leadership.
Democrats on the Senate Health, Education, Labor and Pensions Committee questioned Schultz over his role in the company’s decision to fire pro-union baristas and close stores that unionized, among other efforts that have spawned a wave of legal complaints.
“Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country,” said Sen. Bernie Sanders (I-Vt.), the committee’s chairman. “The fundamental issue we’re confronting today is whether we have a system of justice that applies to all, or whether billionaires and large corporations can break the law with impunity.”
Workers at nearly 300 Starbucks stores have voted to form a union since December 2021 in an effort to secure stronger wages, safety standards and more consistent scheduling.
Read more: Sanders confronts Starbucks’ Schultz over labor law violations
Amid a crackdown on organizing efforts, Starbucks drew more than 80 unfair labor practice charges from the National Labor Relations Board (NLRB) over the past 18 months, more than any other company.
Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-Vt.) and Starbucks CEO Howard Schultz
Sanders grills Schultz under oath
Sanders, who threatened to subpoena Schultz to bring him before the committee, noted that NLRB judges have ruled that Starbucks broke labor laws more than 130 times. He asked Schultz whether he was involved in alleged union-busting efforts.
“Mr. Schultz, before answering the following flush of questions, let me remind you that federal law prohibits knowingly and willfully making any fraudulent statement,” Sanders said during his line of questioning.
Schultz, a three-time Starbucks chief executive who abruptly resigned from his post ahead of Wednesday’s hearing, denied that Starbucks has ever broken the law.
When asked if he ever coerced or intimidated workers who considered joining a union, Schultz said that he “had conversations that could have been interpreted in a different way than I intended.”
He denied involvement in the decision to fire union organizers or close stores that voted to form a union. More than 200 workers who took part in organizing activities have been fired, according to Starbucks Workers United.
“My involvement and engagement in union activities, despite this event today, has been de minimis. I was not involved in any issue of closing stores,” Schultz said.
Democrats take aim at Starbucks claims
Democrats blasted Schultz for Starbucks’ decision to withhold recently announced benefits from nonunion stores, which the NLRB has alleged is an illegal union-busting tactic.
Those benefits include higher wages and credit card tipping, which unionized workers say costs them around $4 an hour.
Schultz told lawmakers that it was his understanding that Starbucks could not provide the benefits while negotiating a collective bargaining agreement with unionized stores.
But he later said that it was the company’s preference not to provide those benefits outside of a new contract after Sen. Tina Smith (D-Minn.) noted that Starbucks Workers United waived objections to bargaining on the issue.
“I just think you’re wrong,” Smith told Schultz.
Amazon JFK8 distribution center union organizer Jason Anthony speaks to media, April 1, 2022, in the Brooklyn borough of New York. (AP Photo/Eduardo Munoz Alvarez, File)
Democrats on the committee pointed to the recent regulatory rulings to criticize Schultz for repeatedly stating that Starbucks is only being accused of labor law violations.
Those include a March ruling finding that Starbucks violated labor laws hundreds of times to deter organizing in Buffalo. The order, which Starbucks is appealing, would require the company to rehire fired workers and post a notice in its stores declaring that workers have the right to organize.
“It is akin to someone who has been ticketed for speeding 100 times saying, ‘I’ve never violated the law, because every single time the cop got it wrong,’” Sen. Chris Murphy (D-Conn.) told Schultz.
Schultz says Starbucks doesn’t need unions
Schultz told the panel that unions are important when companies are mistreating their employees. But he cast Starbucks as a good actor that has gone above and beyond to reward its workers, and argued that the company’s existing wages and benefits are better than union contracts.
Starbucks baristas make $17.50 per hour on average, Schultz said, while also receiving “comprehensive” health care, paid college tuition and shares in the company, which has a market capitalization of around $115 billion.
He said that hourly wages rise to $27 when accounting for those benefits and added that 63 percent of retail managers started as baristas.
“No company in our sector offers higher benefits in the U.S.,” Schultz said.
Starbucks baristas detail retaliation
Jaysin Saxton, a former Augusta, Ga.-based Starbucks worker, told the committee he was fired for leading a protest at the store, adding that several of his coworkers were laid off for supporting a successful unionization effort.
“I was fired for organizing, like so many union leaders across the country,” Saxton said.
The NLRB filed a complaint in December alleging that Starbucks illegally retaliated against Saxton, who is asking to be reinstated.
Maggie Carter, a Knoxville, Tenn.-based Starbucks barista, told lawmakers that Starbucks reduced hours for unionized workers, creating uncertainty about their weekly wages and benefits.
By reducing hours under a certain threshold, Starbucks no longer has to provide health care coverage, she noted.
Starbucks CEO Howard Schultz speaks at the Starbucks annual shareholders meeting in Seattle. (AP Photo/Elaine Thompson, File)
Republicans defend Starbucks, attack NLRB
Republicans on the committee mostly praised Schultz, a self-proclaimed liberal who ran for president as a Democrat in the 2020 election, and sought to undermine the credibility of NLRB charges levied against Starbucks.
“I think it’s rich that you’re being grilled by people who have never had the opportunity to create a single job, and yet they believe that they know better how to do so,” Sen. Mitt Romney (R-Utah), adding that unions’ political donations to Democrats represent a “conflict of interest.”
Former Rep. Bradley Byrne (R-Ala.), a GOP witness, testified on behalf of an NLRB whistleblower who alleged that the board’s employees sought to tip the scales in favor of unions in at least one Starbucks union election.
Sen. Bill Cassidy (R-La.), the committee’s ranking member, suggested that some NLRB charges against Starbucks might not be legitimate, given the board’s pro-labor direction under the leadership of Jennifer Abruzzo, a former union official.
“Are NLRB employees weaponizing the agency against American employers to benefit politically connected labor unions?” Cassidy asked.
Only a couple of Republicans were critical of Schultz. Sen. Roger Marshall (R-Kan.) said that the large number of unfair labor practice charges indicates there “may be some smoke and fire together there.”
“Any large corporation shouldn’t necessarily be bragging about $15 to $20 wages,” Sen. Mike Braun (R-Ind.) told Schultz, adding that smaller, Main Street businesses typically pay more.
You can watch the hearing in its entirety here.