Former Starbucks CEO Howard Schultz on Wednesday faced harsh criticism from lawmakers for the chain’s alleged efforts to discourage employees from unionizing, but he avoided committing to deeper negotiations with the union and repeatedly denied that the coffee chain had broken the law.
In a hearing before the U.S. Senate Committee on Health, Education, Labor and Pensions, U.S. Sen. Bernie Sanders, a Vermont independent and the committee’s chair, said that efforts by Starbucks SBUX, +1.92% to stifle unionization were unprecedented.
“Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country,” Sanders said.
Those remarks followed accusations that Starbucks had fired employees in retaliation for their interest in unionizing, intimidated employees trying to unionize and committed hundreds of unfair labor practices or labor-law violations since the first Starbucks store voted to unionize in 2021. Employees who have voted to form unions — an effort to seek better pay and protections after working through the pandemic — have said that Starbucks has repeatedly delayed the bargaining process, at times for months. Starbucks has said it was prepared to negotiate only in face-to-face meetings.
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During the hearing, Schultz, who joined Starbucks a decade after its founding in 1971 and directed its worldwide expansion, defended the company’s record, saying the chain paid baristas an average of $17.50 an hour and pointing to the company’s benefits, including college tuition and health insurance.
He said that most store managers start out as baristas and that Starbucks had a higher level of retention than its industry peers. He also said that the employees who have voted to unionize — at nearly 300 coffee shops — represented a small portion of the company’s overall stores and staff. Schultz also touted the company’s employee stock-ownership program.
“That’s why Starbucks doesn’t need a union,” he said.
The union representing the Starbucks workers, Starbucks Workers United, has said Starbucks would not have taken steps to increase pay and strengthen benefits if the stores had not unionized. While Starbucks has racked up allegations of labor-law violations, the company has accused the National Labor Relations Board of unfairly working in the union’s favor during elections.
In-depth: Unions’ push at Amazon, Apple and Starbucks could be ‘most significant moment in the American labor movement’ in decades
Sanders began the hearing with a series of pointed questions related to Schultz’s awareness of — or possible involvement in — the company’s efforts to dissuade employees from unionizing.
When Sanders asked if Schultz had ever been informed of or involved with a decision to fire a worker who was part of an organization drive, Schultz said, “I was not.” When asked whether he had been informed of or involved with any decision to discipline a worker who was part of a unionization effort, Schultz again responded: “I was not.”
However, when Sanders asked Schultz whether he had ever “threatened, coerced or intimidated a worker” for supporting a union, the executive said that was a matter of interpretation.
“It’s up to the person who received the information that I spoke to them about,” he said.
See also: Starbucks CEO Howard Schultz targeted in latest complaint to regulators about antiunion activity
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Regarding improved employee benefits the company began providing at nonunion stores last year, shortly after he returned as chief executive, Schultz said: “My understanding was under the law, we did not have the unilateral right to provide those benefits to employees who were interested in joining a union.”
That view of the law has been disputed. Sanders asked if Schultz would commit to exchanging proposals with the union within the next 14 days. Schultz, without saying yes or no, claimed that union arrangements called for negotiating about one store at a time. He insisted on face-to-face meetings.
“We believe that face-to-face negotiations are the way to proceed,” Schultz said. “And the reason I want to make that point is that there have been safety issues in which Starbucks managers have been outed on social media. There are privacy issues. We don’t want to do it on Zoom ZM, +3.01%. ”
Schultz stepped down as CEO of Starbucks earlier this month, about two weeks earlier than previously planned and just before a shareholders’ meeting that included a vote on Starbucks’ response to union activity. He was replaced by Laxman Narasimhan but remains on the board of directors.
However, some Wall Street analysts said the high-profile hearing was unlikely to lead to bigger wins for the union.
“So far, it’s been almost 18 months since the unionization effort began in upstate New York, with no agreed upon contract,” BTIG analyst Peter Saleh said in a note on Wednesday. “We believe the more than 2 hour hearing accomplished little, and didn’t make unionization at Starbucks any more likely than it was yesterday.”
The efforts by Starbucks employees to unionize follow high-profile efforts a handful of warehouses at Amazon.com Inc. AMZN, +3.10% and Apple retail stores, among others. However, the share of U.S. workers in labor union fell to a record low last year —albeit due to a rise in wage and salary employment overall — and some experts say that labor laws generally favor employers.
Later on during the hearing on Wednesday, Jaysin Saxton, a Starbucks worker in Augusta, Ga., who said he was fired after organizing, said that after his store began organizing, the company sent more senior managers to the store. Employees received write-ups for minor infractions, like showing up two minutes late, and were subject to meetings with higher-ups, where partners were threatened with losing their benefits if they joined a union.
He said the company’s anti-union tactics intensified after employees at the store voted to unionize.
“We were constantly being watched, and managers listened in on our conversations through our headsets,” he said. “Store hours were constantly changing and hours kept getting cut. People were fired right on the shop floor.”
Schultz, earlier in the day, said that he wasn’t aware of any of “anyone surveilling anyone” and that he didn’t support such activity.
A Starbucks barista, Maggie Carter, in Knoxville, Tenn., reported a similar response from the company after her store opted to hold a union election. She added that low worker pay at the coffee chain often forced them to chose between necessities.
She said that health benefits were too expensive for workers to actually be able to use, and tied to hours worked. The eligibility requirements amount to 20 hours a week on average, potentially putting coverage in jeopardy if a supervisor cuts an employee’s work schedule. She said she recently lost her benefits due to those hour requirements.
“One of the main things I hear from my partners is ‘I can’t pay my light bill and put gas in my car at the same time,’ or ‘I can’t put gas in my car at the same time and get groceries,’” she said.
Shares of Starbucks were up 1.3% in Wednesday afternoon trading. The stock has gained 9.4% in the past year, while the S&P 500 SPX, +1.42% has declined 14.3%.
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This article was originally published by Marketwatch.com. Read the original article here.