NLRB judge: Starbucks violated labor law in offering pay raises, benefits to nonunion workers

A federal labor judge ruled Thursday that Starbucks broke the law by providing raises and additional benefits for non-union workers last year without offering those same increases to unionized staff.

The ruling, first reported by Bloomberg, is a decision on the latest in a trend of allegations that Starbucks went through with a vast union-busting campaign in 2021 and 2022 as its shops increasingly considered joining an upstart barista union. 

Specifically, the judge ruled that the company violated the National Labor Relations Act last August by giving non-union workers a raise to at least $15 an hour, but did not extend the raises to unionized staff.

“Respondent used its top executive to launch a corporate-wide effort to manipulate its employees’ free choice by conditioning their pay and benefits on their willingness to forgo organizing—a direct attack on the Act’s central goals,” Administrative Law Judge Mara-Louise Anzalone wrote.

The ruling is the first to go against the company for a national policy. Previous rulings against Starbucks said it violated labor law on an individual, store-by-store basis.

Anzalone made a set of recommendations including forcing Starbucks to provide back pay for the union workers who were not given raises, as well as ordered CEO Laxman Narasimhan to record and distribute a video of him describing his employees’ labor rights.

Decisions made by administrative law judges are then reviewed by the National Labor Relations Board (NLRB) and enforced by federal judges, a process that can take years amid appeals.

The Starbucks union-busting allegations reached a crescendo in March, when then-CEO Howard Schultz faced the Senate Health, Education, Labor and Pensions Committee, chaired by Sen. Bernie Sanders (I-Vt.). 

Sanders grilled Schultz on his company’s union-busting practices and urged workers to continue pursuing unions.

Earlier that month, another labor judge ruled that the company committed ‘egregious and widespread’ labor violations against New York workers attempting to unionize.

In Thursday’s ruling, Anzalone said that the company’s announcement of the raise in early 2022 was a strategic choice to discourage workers from joining the union and cited the company’s communication strategy as a pressure campaign against unionization.

“Respondent continued to barrage partners with ‘updates’ which chiefly served to hammer home the idea that nonunion employees had ‘collaborated’ their way into raises and improved benefits,” the judge wrote.

“The evidence establishes that Respondent’s conduct in withholding wage and benefit increases from union and unionizing employees was calculated to discourage union activity and support within the meaning of the Act,” she continued.

The ruling specifically cites anti-union “news” pieces posted on the company’s website for employees, “listening sessions” where Schultz spoke to workers at stores across the country to discourage unionization and misleading statements about the benefits of organizing.

Starbucks denounced the ruling and committed to appealing it if Anzalone’s recommendations are upheld.

“We continue to contend that Starbucks adhered to established organizing and collective bargaining rules and we plan to file exceptions to the Administrative Law Judge’s recommendations,” the company said in a statement to The Hill.

“The ALJ’s recommendation that Starbucks should or could have disregarded these long-held rules creates an untenable situation — which has already been rejected by federal courts — where employers violate the law if they unilaterally include organizing or unionized employees when making changes in wages and benefits and violate the law if they do not do so,” the coffee retail giant added.

Starbucks Workers United celebrated the decision, calling it a “massive victory” for employees.

“With this ruling, Starbucks has finally been held accountable for their despicable carrot-and-stick union-busting strategy,” they said in a statement to The Hill.

“This is the most expansive ruling yet against the coffee giant, and it shows that Starbucks’ anti-union campaign started from the top, was coordinated, and has deprived thousands of workers who live paycheck-to-paycheck income that could be put toward food, bills, sick benefits, and more,” the union added.