Starbucks Loses Union Battle At Flagship Store Amid Ongoing ...

25 Apr 2024

Forbes

Topline

Starbucks lost a labor appeal on Wednesday, requiring the coffee giant to recognize a union at its flagship store in Seattle—the same day the company reportedly restarted union negotiations, and one day after taking a different union dispute with workers in Tennessee to the Supreme Court.

A circuit court sided with unionized Starbucks workers in Seattle, one day after the Supreme Court ... [+] heard oral arguments about a separate union dispute at a cafe in Tennessee.

Corbis via Getty Images Key Facts

The Ninth Circuit Court upheld a decision by the National Labor Relations Board, which validated the union election at the Seattle Roastery—one of the chain’s premier “Starbucks Reserve” locations situated blocks away from the original Starbucks cafe.

The Roastery employs 104 workers, and employees voted 38-27 to approve the union in March 2022.

However, Starbucks disputed the results of the election after the NLRB allowed organizers to conduct a mail-in vote—which they said was necessary due to rising COVID-19 cases at the time.

The circuit court agreed with the NLRB that the mail-in ballot was appropriate given the COVID data at the time, noting that cases only began decreasing in Seattle in the days after the election was called.

Wednesday’s decision will force Starbucks to recognize the Seattle Roastery’s union, becoming one of the more than 400 unionized stores in the U.S.

News Peg

Meanwhile, Starbucks restarted negotiations with Starbucks Workers United on Wednesday at an undisclosed location in Atlanta, the New York Times reported. Starbucks Workers United represents over 10,000 employees at the coffee chain, but the company has refused to meet with union representatives since May 2023. Since the last round of negotiations, the union staged multiple strikes and launched a campaign to win seats on Starbucks’ board of directors, which they ended in March. Starbucks also sued the union in October for trademark infringement after they used the company’s logo on a pro-Palestine social media post. In a statement sent to Forbes, Starbucks spokesperson Jay Go Guasch said the company would be training managers to “ensure respect of our partners’ right to organize,” and will focus on “progressing negotiations towards ratified store contracts this year.”

Key Background

On Tuesday, the Supreme Court heard oral arguments from lawyers for Starbucks and the Justice Department, who defended the NLRB’s decision to force the company to rehire workers who were trying to unionize in Memphis, Tennessee in February 2022. The NLRB ordered Starbucks to rehire the seven employees using a preliminary injunction outlined in the National Labor Relations Act. However, both liberal and conservative justices questioned the board’s decision-making process, seeming to agree with Starbucks’ attorneys that the board should use a stricter test to determine if an injunction is appropriate—the same test used in non-labor disputes. Austin Raynor, a lawyer for the Justice Department, disputed the claim that the NLRB’s review process was not strict enough, noting that over 20,000 charges of unfair labor practices were filed in 2023, but the board only granted injunctions for seven of those charges.

What To Watch For

It is unclear if Starbucks plans to appeal the Ninth Circuit Court’s decision to the Supreme Court. Guasch, Starbucks’ spokesperson, said the company was still “reviewing” the circuit court’s decision.