By Nick Niedswiadek; Politico
Former CEO Howard Schultz pushed back against allegations that the company illegally interfered in unionization efforts, but Bernie Sanders was having none of it.
After months of steadily amping up pressure on Starbucks and its longtime leader, Howard Schultz, Sen. Bernie Sanders finally got his chance Wednesday to grill the coffee executive over the company’s hardball response to union organizing at its stores.
“Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country,” said Sanders (I-Vt.), who heads the Senate committee that handles labor issues, at a hearing where Schultz was the main attraction. “What is outrageous to me is not only Starbucks’ anti-union activities and their willingness to break the law, it is their calculated and intentional efforts to stall, stall and stall.”
Schultz, who stepped down earlier this month as interim CEO, spent hours defending the company he has steered — off and on — since the 1980s. He repeatedly denied allegations of union busting, trading barbs with Sanders and Democrats in the process, and tried to depict a company worth emulating rather than denigrating.
Here are five takeaways from Wednesday’s hearing:
Starbucks isn’t budging
Schultz may no longer be holding the reins, but he made clear he does not believe the company has done anything illegal in its effort to quell a unionization drive that gained steam in 2021 and rippled across hundreds of Starbucks stores in 2022.
“Starbucks Coffee Company unequivocally — and let me set the zone for this very early on — has not broken the law,” Schultz said at the outset of Wednesday’s hearing before repeating variations of that declaration numerous times throughout the proceedings.
The National Labor Relations Board is prosecuting more than 80 complaints, covering 278 unfair labor practice charges, against the company. NLRB judges have handed down a smattering of rulings that Starbucks did break federal law, though the company appears intent on appealing such decisions for as long as it takes.
“We’re confident those allegations will be proven false,” Schultz said. “Starbucks has not broken the law.”
Republicans (reluctantly) came to Starbucks’ defense
GOP members of the Senate Health, Education, Labor and Pensions Committee members were willing to go to bat for Starbucks, even though the company has allied itself with progressive causes over the years.
“There’s some irony to a non-coffee-drinking Mormon conservative defending a Democrat candidate for president and perhaps one of the most liberal companies in America,” Sen. Mitt Romney (R-Utah) said. “That being said, I also think it’s somewhat rich that you’re being grilled by people who have never had the opportunity to create a single job.”
(Schultz never ran for president, though he did flirt with the idea in both the 2016 and 2020 cycles. And in 2019 he said he had disaffiliated with the Democratic Party for ideological reasons.)
Romney was one of several Republicans who said they disagreed with some of Starbucks’ political stances but nonetheless felt it was being villainized by Democrats and union supporters.
Schultz: Blunt rhetoric, but no laws were broken
During the hearing, senators of both parties got Schultz to confirm a number of facts about Starbucks and its response to the unionization drive — much of which will eventually make its way into legal filings.
The former CEO confirmed that workers at unionized stores were not extended certain compensation benefits granted to non-union stores, that it has opposed having collective bargaining negotiations done over Zoom and that Schultz told one worker “if you hate the company, you could work somewhere else.”
Schultz said that Starbucks believes labor law prohibits it from unilaterally changing employee compensation at unionized stores and that the company has pushed for in-person talks out of safety concerns for managers involved — though the NLRB has argued otherwise. He also said that his comments to that worker, which were at a company event, may have been “misinterpreted” and were not intended as anti-union intimidation.
He also said that there was nothing wrong with Starbucks telling workers that it believes they would be better off without unionizing.
“We have consistently laid out our preference without breaking any law,” he said.
Unions rile up Mullins
For the second time in a month, first-year Sen. Markwayne Mullin (R-Okla.) got into a spirited back-and-forth during a hearing related to unionization — this time with Sanders.
Mullin accused Sanders of being hypocritical in lambasting the wealth of Schultz and other business leaders when he himself has profited from the American system.
“If you can be a millionaire, why can’t Mr. Schultz and other CEOs be millionaires and be honest, too?”
Sanders took issue with Mullin’s estimate of his net worth and said that he had “made more misstatements in a shorter period of time than I have ever heard.”
A few weeks earlier Mullin had a testy exchange with Teamsters union President Sean O’Brien, and the senator said during that hearing that his disdain for unions was born out of personal experience with how they treated him when they attempted to organize the plumbing business he ran.
Expect to hear a lot more about the NLRB’s fairness
Starbucks has accused staffers at the labor agency of being biased against it and colluding with the union in several elections. An agency official, Rebecca Dormon, went to the coffee company with concerns last year and the information she provided has helped it challenge the results of at least one union vote.
“The NLRB is facing its own credibility crisis,” said Sen. Bill Cassidy (R-La.), the top Republican on the HELP Committee. “Are NLRB employees weaponizing the agency against American employers to benefit politically connected labor unions?”
The NLRB has denied Starbucks’ allegations, though House Education and the Workforce Chair Virginia Foxx (R-N.C.) issued a subpoena last week to Dormon for information on the matter.
In the midst of Wednesday’s hearing, House Democrats revealed that the NLRB inspector general has opened an inquiry into issues surrounding the subpoena. Republicans assailed the probe as an attempt to intimidate Dormon for coming forward, and the development will likely ratchet up tensions between the NLRB and conservative lawmakers.
