Starbucks Winning Battle Against Labor

Even if one posits that Starbucks Workers United is largely correct about its claims about how Starbucks Corp. (NASDAQ: SBUX | SBUX Price Prediction) treats workers, it has barely made a dent in the company’s operations. That puts the union in a weak position as it tries to increase membership.

The back-and-forth efforts of some Starbucks employees to negotiate better terms have slowed to a halt as only 665 Starbucks stores have unionized, according to a recent analysis. The company has over 10,000 stores in the United States. Efforts to unionize Starbucks store workers began as early as 2021. That now seems like a long time ago, given the modest progress since then. After several small strikes, the most recent included 2,500 workers in 120 stores in 85 cities. This did not affect Starbucks operations, and the desired effect on customers never materialized. Starbucks Workers United lost whatever leverage it might have had. The strike was supposed to be its signature move to show worker progress.

Should this four-year-old set of actions affect shareholders? In short, investor concerns about workers affecting revenue or the bottom line are minor compared to Starbucks’ terrible financial performance. The stock is down 6% this year, while the S&P 500 is up 17%. Same-store sales have been troubling.

The Union’s Progress

The relationship between management and union leaders has been bitter. According to the Guardian, “Starbucks Workers United has filed hundreds of unfair labor practice (ULP) charges with the National Labor Relations Board.” The union has been successful with a number of these. However, according to Legal Drive, a recent Supreme Court decision was a major setback.

Indeed, the claims between Starbucks and the union have been almost endless and highly public. The most visible was probably the testimony of Starbucks “founder” and former CEO Howard Schultz in March 2023. He and Senator Bernie Sanders discussed whether Schultz was a “union buster.” Sanders said, “Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country.” Even the public forum, which should have drummed up more support for the union’s actions, yielded little in its favor.

The union needs to demonstrate that it can substantially disrupt Starbucks’ business to bring its management to the table. The argument that employees have been poorly treated, which may be true, has not had that effect at all. CNN recently ran an article titled, “Starbucks workers are still without a labor deal four years after their first union win. Here’s why.” Among its conclusions: “Its workers continue to win representation elections. But talks between the union and management have dragged on for so long that many workers who voted in early elections have already left the company.” And the movement of the “wins” has not been consequential.

Starbucks Workers United has hired PR firm BerlinRosen to represent it with the press. There is scant evidence this has worked.

Starbucks CEO Brian Niccol faces problems that range from a poor stock price to poor financial results. Whether or not Starbucks Workers United’s claims are correct, its efforts are nowhere near the top of his list. For the time being, they don’t have to be.

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