NLRB: Starbucks illegally withheld wages, benefits from union workers

The National Labor Relations Board (NLRB) filed a complaint on Wednesday alleging Starbucks illegally withheld wages and benefits from employees at unionized stores and those in the process of unionizing.

The 30-page complaint also alleges interim CEO Howard Schultz made a number of illegal statements under federal labor laws, including video calls where he told employees it would be futile for them to unionize and made implied promises of increased benefits to those who did not organize.

“Any new benefit that we create for the company, we are not permitted by law, to offer that benefit to stores that voted for the union while they are in collective bargaining,” Schultz stated on a companywide call on April 11, according to the complaint.

A Starbucks store in Buffalo, N.Y., became the first U.S. location to unionize in December, and more than 200 stores have since successfully held votes to join the union. Starbucks has battled many of those unionization efforts in court.

The pay increases, which became effective on Aug. 1, increased hourly rates for nonunion employees hired before May 2 to either $15 per hour or by 3 percent, whichever was higher. Employees with two or more years at the company received further increases.

The international president of the union sent a letter to Schultz the same day waiving the union’s bargaining rights and asking the company to extend the changes to unionized employees, calling Schultz’s belief that such a move was illegal “misleading at best.”

The NLRB’s complaint asks an administrative judge to require Starbucks to retroactively provide unionized employees with the increased wages and benefits and issue a letter of apology. 

The NLRB also asked the judge to mandate a nationwide electronic notice posting for Starbucks employees, a video of Schultz reading the posting and a nationwide training session for managers and supervisors about federal labor laws.

“Howard Schultz made the decision to deprive us of a raise in a time where the cost of living is skyrocketing,” Maggie Carter, a barista from Knoxville, Tenn., said in a statement distributed by the union. 

“He claims to run a ‘different kind of company’, yet in reality, Howard Schultz is simply a billionaire bully who is doing everything he can to crush workers’ rights,” she continued. 

An NLRB administrative judge will hold a hearing on Oct. 25 to consider the complaint.

A Starbucks spokesperson did not return a request for comment.