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Former Starbucks CEO Howard Schultz broke federal labor law by telling a barista “if you’re not happy at Starbucks, you can go work for another company,” the National Labor Relations Board has ruled.
While serving as interim CEO in 2022, Schultz spoke with a California-based employee who raised concerns about unionization. According to the decision announced by the NLRB Wednesday, his response was an unlawful and coercive threat.
Schultz’s tenure as CEO was characterized by frequent disputes with employees seeking to organize as unionization at Starbucks stores swelled across the US.
What ‘unlawful’ threat did Starbucks’ former CEO make?
In 2022, Schultz appeared at an event in Long Beach, California, focused on improving working conditions at Starbucks sites.
The NLRB said that Madison Hall, the Starbucks barista in question, raised concerns about alleged unfair labor practices at the company, and praised the power of unions in creating better working conditions.
According to the decision shared by the NLRB, Schultz “had an angry expression on his face,” and told Hall that the event wasn’t an appropriate forum to discuss union issues.
“Why are you angry at Starbucks?” he asked. “If you’re not happy at Starbucks, you can go work for another company,” he continued.
An administrative law judge in October 2023 ruled these remarks were unlawful. The NLRB’s decision upheld this ruling, though noted that the judge referred to Schultz as a ‘legendary leader.’
The board said this level of status would “exacerbate the coercive nature of Schultz’s statement” to Hall.
A spokesperson for Starbucks said the company disagrees with the decision by the labor board but said that it will continue to work closely with the union representing its staff.
“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,” they added.
Schultz stepped down in March 2023 as CEO but continued serving on the board of directors until September 2023.
Meanwhile, the NLRB ordered Starbucks Wednesday to post a notice of employee rights, including to organize, at its stores in Long Beach. The order also mandated Starbucks to cease and desist with threats to fire employees who unionize.
Ongoing union disputes at Starbucks
This month has also marked a landmark victory for Workers United, the union representing Starbucks staff across the US.
On October 1, the union’s X account posted: “BREAKING: Starbucks workers just organized and WON the 500th UNION STARBUCKS STORE in the United States!”
The first Starbucks location to unionize was in Buffalo, New York, in 2021.
Since that date, there have been hundreds of complaints filed by workers with the NLRB over reported union-busting activity. Starbucks has consistently denied the charges but has retained a union avoidance law firm, Littler Mendelson.
An NLRB judge has previously said Starbucks’ treatment of employees at the Buffalo store attempting to unionize in 2021 included “egregious and widespread conduct.”
Speaking to CNN on Wednesday, Workers United committee co-chair Michelle Eisen praised the NLRB’s decision.
“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,” she said.
In February 2024, the coffee chain announced an agreement with Workers United, with the two groups releasing a collective statement that promised a “shared commitment to establishing a positive relationship in the interest of Starbucks partners.”
But negotiations stalled, and only resumed later in May as unionized stores battled for improvements to wages, worker-friendly staffing and scheduling, and health and safety provisions.
“Starbucks and Workers United remain committed to building a positive, productive relationship,” a statement from Starbucks said in May. “We respect our partners’ rights to organize and on progressing negotiations towards ratified store contracts this year.”
