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Bernie Sanders confronts former Starbucks CEO Howard Schultz on company’s labor practices

<i>Saul Loeb/AFP/Getty Images</i><br/>Former Starbucks CEO Howard Schultz arrives to testify about the company's labor and union practices during a Senate Committee on Health
AFP via Getty Images
Saul Loeb/AFP/Getty Images
Former Starbucks CEO Howard Schultz arrives to testify about the company's labor and union practices during a Senate Committee on Health

By Danielle Wiener-Bronner, CNN

Senator Bernie Sanders, who has roundly criticized former Starbucks CEO Howard Schultz over the company’s blatant attempts to shut down its own workers’ unionization efforts, finally got to question Schultz during a hearing before the Senate Health, Education, Labor, and Pensions Committee on Wednesday.

Over the course of roughly two hours on Wednesday morning senators questioned Schultz, currently Starbucks’ chairman emeritus, about the company. Those on the left pressed Schultz on the coffee company’s labor practices, and wondered how the former CEO can claim that the company acted lawfully, despite National Labor Relations Board findings that it did not.

Those on the right painted Schultz as a successful CEO who has created hundreds of thousands of jobs, some taking the opportunity to defend business leaders in general and skipping questioning entirely.

Later, one former and one current employee described seeing pro-union colleagues penalized and being punished themselves.

“All over this country, workers are struggling. They want to join unions. They want better wages, better working conditions. They want that at Starbucks,” Sanders said to reporters during a break in the proceedings.

“I hope what today has done is to tell Mr. Schultz that the time right now is to do what is legal, to do what is appropriate, to sit down and negotiate a first contract with their workers.”

Schultz and Sanders face off

Sanders, who has accused Schultz of “illegal anti-union activities” in the past, reiterated on Wednesday that “the fundamental issue we are confronting today is whether we have a system of justice that applies to all, or whether billionaires and large corporations can break the law with impunity.”

Sanders mentioned that Starbucks and the union have yet to sign a contract.

“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,” he said. “What Starbucks is doing is not only trying to break unions, but even worse. They are trying to break the spirit of workers who are struggling to improve their lives. And that is unforgivable.”

Senators aren’t the only ones who want more answers from Starbucks. During the company’s annual shareholder meeting last week, investors voted to approve a proposal that would have the board of directors “commission and oversee an independent, third-party assessment of Starbucks’ adherence to its stated commitment to workers’ freedom of association and collective bargaining.”

Companies are not required to adhere to proposals that are approved -— but if they ignore them, they risk angering investors. The results of the vote were shared in an SEC filing Wednesday afternoon, after the hearing had wrapped.

Starbucks said in its filing that it has a previously announced third-party human rights impact assessment already underway, which includes a “review of the principles of freedom of association and the right to collective bargaining.”

Since December 2021, nearly 300 Starbucks stores have voted to unionize and been certified by the NLRB. It’s a relatively small number compared to the roughly 9,300 company-operated Starbucks stores in the United States. But union organizers are fighting an uphill battle against the company.

NLRB administrative law judge Michael Rosas recently said that Starbucks had displayed “egregious and widespread misconduct” in its dealings with employees involved in efforts to unionize Buffalo, New York, stores, including the first location to unionize. Starbucks repeatedly sent high-level executives into Buffalo-area stores in a “relentless” effort, the judge wrote, which “likely left a lasting impact as to the importance of voting against representation.” As a result, the company must reinstate and make whole a number of workers who were let go from locations in or around Buffalo, Rosas said. The judge also said that Schultz, then interim CEO, and another company leader must read the notice to employees, or be present at a meeting where the rights are read.

When Sanders asked whether Schultz would read the notice, Schultz said no. “I am not, because Starbucks coffee company did not break the law,” he said.

Schultz said during his testimony Wednesday that “unequivocally,” Starbucks “has not broken the law.” He referred to Rosas’ findings as “allegations,” adding that “we’re confident that those allegations will be proven false.” Starbucks said in a statement at the time of Rosas’ order that it is “considering all options to obtain further legal review,” adding that “we believe the decision and the remedies ordered are inappropriate given the record in this matter.”

When Sanders asked Schultz to commit to exchanging proposals with the union within two weeks of the hearing, he declined to do so, saying instead that “we will continue to negotiate in good faith.” Starbucks argues that it is the union that has dragged its feet to the bargaining table.

Like getting 100 speeding tickets and claiming innocence

Later in the morning, Senator Christopher Murphy questioned Schultz on his assertion that Starbucks has been acting legally, saying he was attempting to square Starbucks and Schultz’s claim that it had done nothing wrong with repeated official findings otherwise.

“It is akin to someone who has been ticketed for speeding 100 times saying I’ve never violated the law, because every single time — every single time — the cop got it wrong,” Murphy said.

Some senators defended Schultz as a stand-in for business leaders in general. “Mr. Schultz, I applaud you for your success. And I applaud all the CEOs out there for their success,” said Senator Markwayne Mullin, who a few weeks ago got into a heated exchange with general president of the International Brotherhood of Teamsters Sean O’Brien during another HELP hearing.

Senator Mitt Romney threw barbs at his fellow committee members. “It’s somewhat rich that you’re being grilled by people who have never had the opportunity to create a single job,” Senator Mitt Romney said. “And yet they believe that they know better how to do so.”

In prepared remarks available on a Starbucks’ website, Schultz reiterated his position that while he recognizes that Starbucks workers have a right to decide whether to join a union, he doesn’t think they should.

“Starbucks respects the right of all partners to make their own decisions about union representation,” Schultz said.

Regional NLRB offices have issued dozens of complaints against the company, covering over 200 unfair labor charges.

In prepared remarks for the hearing, Schultz said, “Starbucks has complied with the National Labor Relations Act,” by recognizing unions after they are certified by the NLRB.

Schultz has served three stints as Starbucks’ chief executive, most recently as interim CEO from April 2022 until earlier this month, when he handed over to current CEO Laxman Narasimhan ahead of schedule. In his prepared remarks, Schultz also spoke about the company’s history, and its character as he sees it.

“Starbucks follows its guiding principles, lives its mission and values, celebrates diversity and inclusion, and welcomes all on the belief that our differences make us better and stronger,” he said. “We are a different kind of public company that balances profitability with social conscience. Aspiring to achieve that vision has been my life’s work.”

‘You cannot be pro partner and anti union’

Schultz on Wednesday praised the generous perks and benefits Starbucks offers. He acknowledged in his prepared remarks that when he returned last year it was because the company had “lost its way,” but said that it is now back on track.

That rosy image of the company, however, has been tainted by the high-profile efforts by Starbucks against the union, which unfolded under Schultz’s leadership in 2022 and into this year.

“You cannot be pro partner and anti union,” said Maggie Carter, a barista and union organizer at a Starbucks in Knoxville, Tennessee, during the hearing. Starbucks uses the word “partner” for its employees. “It’s well past time for the company to bargain in good faith,” she said, adding, “Howard Schultz does not feel like a partner to me.”

Carter, who worked at Starbucks through the pandemic, said that when she raised concerns about store conditions to managers during that time they were unresponsive. “That was a huge catalyst to why we wanted to organize,” she said.

Jaysin Saxton, a former employee who said he was fired wrongfully, described what he saw as retaliatory behavior from Starbucks after he started organizing.

“We were disciplined for minor things that happened in the store, like being written up for being two minutes late, which had never happened before,” he said. Saxton said he has filed an unfair labor practice charge with the NLRB and hopes to be reinstated at Starbucks.

“We are coming came together to demand better pay, affordable health coverage and stronger safety procedures,” he said. “I’m proud to be a leader of this new labor movement.”

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