Ex-Starbucks CEO denies breaking union laws before Congress

  • Starbucks ex-CEO Howard Schultz addressed the company's labor record
  • Schultz agreed to testify before Congress under threat of subpoena
  • Schultz stepped down as CEO but remains on the company's board

Former Starbucks CEO Howard Schultz drinks from a Starbucks mug as he testifies before the Senate Health, Education, Labor and Pensions committee, Wednesday, March 29, 2023, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

(NewsNation) — Former Starbucks CEO Howard Schultz on Wednesday denied that the company broke labor laws, and defended its stance on unions, during what was an often testy appearance before the Senate Health, Education, Labor and Pensions Committee.

U.S. Sen. Bernie Sanders, I-Vt., who has been supportive of Starbucks labor organizers, has been trying to get Schultz to testify for months. Schultz agreed to do so under the threat of a subpoena.

Sanders says Schultz, who remains on Starbucks’ board, was instrumental in setting the company’s policies, though the former CEO argues otherwise.

Senate Health, Education, Labor and Pensions Committee Chair Sen. Bernie Sanders, I-Vt., questions former Starbucks CEO Howard Schultz, before the committee, Wednesday, March 29, 2023, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

“Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of this country,” Sanders said.

Sanders, the committee’s chair, asked Schultz about judges on the National Labor Relations Board finding Starbucks guilty of breaking federal labor laws more than 100 times in the past 18 months.

This is one of the findings from a report by Democratic staff on the Health Education Labor and Pensions Committee. In total, NLRB judges found Starbucks broke the law 130 times across six states since workers started organizing in fall 2021. This includes firing, or forcing out, 12 pro-union workers and firing two others because they cooperated with the NLRB’s investigations. Also part of the report was an administrative law judge who found Starbucks guilty of “egregious and widespread misconduct” during a union organizing campaign that started in Buffalo, New York, in 2021.

“Starbucks Coffee Company unequivocally — and let me set the tone for this very early on — has not broken the law,” Schultz insisted during his testimony.

At least 293 of Starbucks’ 9,000 company-owned U.S. stores have voted to unionize since late 2021, according to the NLRB. However, a contract agreement with Starbucks has not been reached at any of those stores.

Workers want higher pay, more consistent schedules and better benefits — things Starbucks claims it already provides.

Minnesota Democratic Sen. Tina Smith pointed out that the company has refused to offer certain benefits, such as credit card tipping or pay increases, to unionized stores. Schultz said those are subject to bargaining. 

What labor organizers want is to address the power imbalances in the company, Smith said. 

“You’re a billionaire and they are your employees. The imbalance is extreme,” Smith said — a statement Schultz took issue with. He said calling him a billionaire is unfair. 

“I grew up in federally subsidized housing. My parents never owned a home. Yes, I have billions of dollars. I earned it. No one gave it to me,” he said.

While Schultz said Starbucks respects the legal rights of its employees to join a union, he said repeatedly at the hearing that the company’s preference is to have a “direct” relationship with what it calls its “partners.” Another point he made to senators was that Starbucks already provides its workers with wages and benefits that are better than others in the industry. 

“Today, baristas in our stores earn on average $17.50,” Schultz said. “Respectfully, that’s more than the minimum wage of every senator that’s represented a state on this committee.”

Vermont, which Sanders represents, has a minimum wage of $13.18, Schultz pointed out. 

However, Sen. Mike Braun, R-Ind., challenged this, saying $17 per hour is not a living wage.

“Any large corporation shouldn’t necessarily be bragging about $15 to $20 wages,” Braun said.

As some grilled Schultz over allegations of unfair labor practices at Starbucks, there were Republicans on the committee who defended him.

Sen. Rand Paul, R-Ky., called Starbucks an “American success story,” and added that he doesn’t want to be part of a “witch hunt.”

“The hearing today is convened to attack a private company for its success,” Paul said.

Senate committee members also heard testimony Wednesday from Jaysin Saxton, a former Starbucks employee from Augusta, Georgia, who said he was fired for union organizing.

He and Tennessee barista Maggie Carter, who also testified, said they and others faced retaliation for trying to start a union, including being disciplined over “minor” occurrences.

“Starbucks and big corporations have a lot of power and money, and they are willing to pull out all the stops to deny workers a voice and a seat at the table in a union,” Saxton said. “That’s why I’m thrilled to be here today to have witnessed firsthand Howard Schultz being held to account for his company’s illegal behavior.”

The Associated Press contributed to this report.


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