Starbucks CEO Asks Workers to Stick With Chain, Not Union - The Wall Street Journal

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Starbucks Corp. SBUX 2.57% was dealt a setback Tuesday after a federal labor authority ruled that the tallying of ballots can move ahead in a worker vote on unionizing three of the company’s cafes.

The ruling by the National Labor Relations Board came after Starbucks Chief Executive Kevin Johnson warned that the formation of a union at the Buffalo, N.Y.-area cafes could disrupt the chain’s relationship with its workers. A direct line to workers has made Starbucks more responsive to employees’ needs, Mr. Johnson said, and the company already has pledged better wages and increased staffing as Buffalo baristas have raised concerns.

“It goes against having that direct relationship with our partners that has served us so well for decades and allowed us to build this great company,” Mr. Johnson said in an interview Monday, referring to Starbucks employees, in his first public comments on the labor-organizing efforts.

On Wednesday, Starbucks baristas in New York’s second-largest city are slated to conclude voting on whether to unionize under Workers United Upstate New York, an affiliate of the Service Employees International Union. About 100 workers are eligible to vote across three stores in the 19-location market.

The National Labor Relations Board, which is overseeing the election, on Tuesday struck down an appeal filed by Starbucks as to the vote’s structure. Starbucks had appealed to the NLRB to have all 19 stores in the Buffalo market vote on whether to unionize, not individual locations as has been Workers United’s wish.

A three-member NLRB panel wrote that Starbucks hadn’t raised substantial issues warranting review. A NLRB spokeswoman said the vote tally will take place Thursday.

A Starbucks spokesman declined to comment on the decision. In a letter sent to baristas on Tuesday, Mr. Johnson said he respected the labor-organizing process and vote.

Workers supporting the proposed Starbucks Workers United union say they are looking for better staffing, training and pay, particularly for employees who have been with the company for years. They also want the right to directly negotiate their pay and benefits with the company.

Tens of thousands of American workers are on strike and thousands more are attempting to unionize. WSJ examines the roots of this new labor activity and speaks with a labor economist for more context on U.S. labor’s changing landscape. Photo: Alyssa Keown/AP

“One of the values that Starbucks has as its core mission and value statement is challenging the status quo, and that’s what we’re doing to try to make things better,” said Michelle Eisen, a Buffalo barista who is helping organize the union.

Across the U.S., workers in manufacturing, food processing, e-commerce and other sectors this year have pushed for higher wages and expanded benefits as companies grapple with what executives have called a nationwide labor shortage.

Asked about the broader relationship between companies and workers, Mr. Johnson said the union issue is among many brought to the forefront during the pandemic, along with racial inequality and inflation. “This is a national dialogue and certainly, Starbucks is not immune,” he said.

Starbucks baristas discussing unionization efforts with an adviser in Buffalo, N.Y., at the end of October.

Photo: Carolyn Thompson/Associated Press

In Buffalo, Starbucks executives have spent weeks urging workers to vote against the union, saying the company is listening and responding to their concerns. Executives have written to and met with Buffalo workers, and recorded a video advising workers on the voting process.

“Please vote and vote no to protect what you love about Starbucks,” Starbucks wrote in text messages sent to workers in recent days. A Starbucks spokesman said workers had the option to opt out of the text communications if they didn’t want to receive them.

Howard Schultz, who built Starbucks from a handful of locations to a global coffee giant, last month held an hour-long meeting with Buffalo workers that spanned the chain’s roots to its current employee benefits. Mr. Schultz said in a letter to workers following the visit that he was saddened to think that workers felt they needed a representative to obtain what they needed from the company.

Mr. Johnson hasn’t publicly addressed workers in Buffalo, but said Monday that he had been involved in matters there while also balancing the concerns of the chain’s more than 80 other markets. He said the company’s board was engaged in what was happening in Buffalo.

‘There is more to do as we continue to adapt to a long-term Covid reality.’

— Starbucks CEO Kevin Johnson

In the letter Tuesday, Mr. Johnson said the company is listening to workers’ concerns, particularly as stores have filled with customers again and pandemic-related challenges remain. He said the company was stepping up recruiting across the U.S., installing new equipment and increasing hourly wages and training.

“We have heard you, and we are making progress on the toughest obstacles,” Mr. Johnson wrote in the two-page letter. “There is more to do as we continue to adapt to a long-term Covid reality.”

Despite the company’s efforts, the unionization push has spread. A company-owned store with 28 eligible workers in Mesa, Ariz., last month filed with the NLRB to unionize. The NLRB is expected to begin hearing testimony on the matter on Friday.

Mr. Johnson said Starbucks’s push against unionization in Buffalo hasn’t hurt its image among customers or other workers. He said the company was hiring 5,000 new U.S. baristas a week, a major influx during the company’s busy holiday season.

“There’s no shortage of resumes of people that want to come work at Starbucks,” he said.

Write to Heather Haddon at heather.haddon@wsj.com

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