Starbucks and union agree to restart contract talks as new CEO Laxman Narasimhan pivots away from tough stance of founder Howard Schultz

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Starbucks and union agree to restart contract talks as new CEO Laxman Narasimhan pivots away from tough stance of founder Howard Schultz

Starbucks said it also agreed to provide workers represented by the Starbucks Workers United union with benefits, such as credit-card tipping, that it was previously providing only to nonunion cafes. The company had maintained that labor law prevented it from extending those perks to unionized shops that lacked collective bargaining agreements, sparking one of many legal disputes that the two sides said they’re now working to resolve.

During mediation discussions last week, “it became clear that there was a constructive path forward on the broader issue of the future of organizing and collective bargaining at Starbucks,” the company said in a statement Tuesday. The union, Starbucks Workers United, issued a similar statement on X, formerly known as Twitter.

The announcement marks one of the first concrete steps toward resolving a public, bitter fight between the company and the union. Around 400 of Starbucks’ more than 9,700 corporate-run US locations have voted to join the union since its first landmark win in December 2021. Yet none of the locations has come close to securing a union contract with the company, and the pace of the union’s growth has slowed.

Howard Schultz, the founder of the modern Starbucks chain and three-time holder of the CEO title, handed the reins to Laxman Narasimhan in March. In December, Starbucks said it reached out to Workers United to attempt to end an impasse over contract talks. The company was looking to restart talks in January with the goal of completing “bargaining and the ratification of contracts in 2024.” 

Sara Kelly, the company’s chief partner officer, called Tuesday’s announcement an “important, positive step” in a statement.

“It is a clear demonstration of our intent to build a constructive relationship with Workers United in the interests of our partners,” Kelly said. “I want to acknowledge and appreciate the union’s willingness to do the same.”

Brand Lawsuits

On Tuesday, the two parties said they’re also looking to resolve lawsuits concerning the use of its brand. The coffee chain had sued the union in October after the outbreak of the Israel-Hamas war, saying the group used the company’s intellectual property in social media posts suggesting the chain supported violence against civilians. 

Workers United responded with its own lawsuit for defamation, accusing Starbucks of seeking to “exploit the ongoing tragedy in the Middle East to harm the union’s reputation.”

Regional directors of the US National Labor Relations Board have issued more than 100 complaints against the company, alleging illegal antiunion tactics including closing stores, firing activists, and refusing to fairly negotiate at unionized cafes. 

The agency’s general counsel, Jennifer Abruzzo, said this month that she considers Starbucks “a bad actor nationally.” Starbucks has denied wrongdoing, and has said the union has been the one refusing to negotiate in good faith.

An NLRB judge ruled in September that Starbucks had violated federal law across the country by providing improvements such as credit card tipping as well as higher pay to nonunion stores while refusing to do the same at unionized locations. The agency judge concluded that Starbucks’ argument that it legally couldn’t extend those improvements was incorrect and not made in good faith.

The pivot on credit-card tipping, as well as the signals of potential coming headway on bargaining, could spur more growth for the union campaign, which has struggled at times to maintain momentum. Unionized baristas have been excluded from new perks their nonunion counterparts were receiving, while seeing little sign of progress with the company at the bargaining table.

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