With wage increases set to take effect at Starbucks cafes in the United States on Monday, union organizers are asking the coffee giant to also extend benefits to unionized stores without going through the bargaining process.
The request comes after the Starbucks announcement in May that he would raise the wages of workers and add other perks such as credit card tips by the end of this year. But the Seattle-based coffee chain said it won’t offer the enhanced benefits to unionized store workers because it has to go through negotiations to make such changes.
In a letter to the CEO of Starbucks Howard Schultz obtained by CNBC, Workers United said the company can legally offer benefits to unionized store employees without negotiation, as long as the union agrees. The letter notes other company-wide benefits announced in recent months, including faster accrual of sick leave and medical travel reimbursement for employees seeking abortions or gender reaffirmation care.
“Workers United refuses to sit idly by while Starbucks cynically promises new benefits only to non-union workers and denies them to our members,” says the letter from Lynne Fox, president of Workers United, to Schultz last month.
The letter says the union is not waiving any other Starbucks bargaining obligations 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 states, “The law is clear: Once a store unionizes, no changes to benefits permitted without good faith collective bargaining.
The company site says workers have access to Starbucks benefits that were in place when the union’s petition was filed, but any subsequent changes to wages, benefits and working conditions must be negotiated.
Labor lawyers say the case could end up before an administrative judge from the National Labor Relations Board.
“Once a union has been certified, an employer is required to negotiate with that union before making changes to the terms and conditions of employment,” said Stephen Holroyd, a lawyer at Jennings Sigmond, who has represented unions and worked for the NLRB.
But he said the union greenlighting the no-bargain benefits changes the situation and he could argue that Starbucks is withholding the benefits because of its organizing drive.
Daniel Sobol, a lawyer at Stevens & Lee who has represented companies in labor cases, said the NLRB and the federal courts disagreed on the issue.
“Whether [ benefit enhancements are] done only to chill unionization, it could be a problem,” he said. But with employers adjusting wages in an inflationary environment, he said Starbucks may not be forced to give raises to unionized employees.
Gabe Frumkin, an attorney for Starbucks Workers United, said it was clear the benefits were being offered in response to the union campaign. He said Workers United had filed two charges related to Starbucks wage and benefits announcements for non-union stores and were considering other options.
Catherine Creighton, director of the School of Industrial and Labor Relations at Cornell University in Buffalo, New York, said companies are required by law to notify the union of a new benefit and the opportunity to bargain over it. But she said ‘if the union says they don’t mind, then the employer can absolutely give them that benefit’.
Wage increases taking effect this week include a raise of at least 5%, or a move to 5% above market rate, whichever is greater, for employees with at least two years of experience. Employees with more than five years of experience get a raise of at least 7% or move up to 10% above market rate, whichever is greater. The increases come on top of a hike previously announced this month that brings wages to a nationwide low of $15 per hour. This increase is available to stores that did not start organizing before its announcement.
Starbucks said it plans to spend $1 billion on pay raises, improved training and store innovation in its 2022 fiscal year. When Schultz returned to his role as CEO for the third time, he suspended the company’s buyout program invest in workers and stores.