Starbucks, Amazon Fight DOL Over Details of Anti-Union Spending

Two of the nation’s largest corporations, Amazon.com Inc. and Starbucks Corp., are fighting what they say are efforts by the US Labor Department and unions to illegally expand businesses’ requirements to report cash they spend to oppose organizing.

Both companies say subpoenas issued in recent months by the DOL’s Office of Labor Management Standards seeking information about travel and other costs related to anti-union activity go beyond disclosures that are required by law.

Now, attorneys for Amazon are daring the agency to take enforcement action against them if they want the information, saying the agency should defend the legality of its request before a judge.

“Given the clarity of Amazon’s position, the proper method for resolving this dispute is for the Department to institute an enforcement proceeding,” Amazon argued in its Jan. 31 filing opposing a subpoena from the OLMS. “And the court would decide who is correct, on the merits.”

Amazon’s subpoena fight before a Seattle-based federal judge could resolve what the companies and Republicans have alleged is an effort by the Biden administration to circumvent the federal rulemaking process to add requirements to the disclosures companies must submit regarding their spending on anti-union activity.

“If they actually have to go into court and try and argue that their interpretation of the law is the correct one, I think they are highly likely to lose,” said Glenn Spencer, senior vice president of the employment policy division at the US Chamber of Commerce. “And that sort of puts an end to the little end run they’ve been trying to do here on the law.”

The legal fight also comes as the Biden DOL is facing pressure from the Service Employees International Union to further investigate whether Starbucks violated its annual disclosure requirements and if it should be required to report its spending on work performed by Littler Mendelson PC attorneys representing the coffee chain—a move that the company opposes.

“They’re a bunch of cry babies,” said Bob Funk, the founder of LaborLab, a nonprofit organization that tracks corporate spending on anti-union activity, referencing Amazon and Starbucks’ opposition to the subpoena. He said his research indicates companies frequently fail to fully comply with annual reporting requirements under the Labor-Management Reporting and Disclosure Act.

“What they’re basically saying is that the Department of Labor does not have the right to investigate corporations and their union busting consultants, which is absolutely ridiculous,” Funk said.

Reporting Requirements

Under the LMRDA, businesses are required to file an LM-10 form with the OLMS disclosing expenditures aimed at persuading employees about whether to join a union, or seeking information from employees about their union activity.

That includes “any expenditure” made to “obtain information concerning the activities of employees or a labor organization in connection with a labor dispute,” or to “interfere with, restrain, or coerce employees” in the exercise of collective bargaining rights, according to the law.

In both cases involving Amazon and Starbucks, OLMS sought information on payments made to reimburse employees for travel to worksites to discuss unionization with other workers.

But the companies contend that the agency has never required reporting on such transactions before.

“Amazon is not obligated to disclose the details of these payments to OLMS in response to a subpoena, any more than it is obligated to disclose them on an LM-10,” the company argued in its filing opposing the subpoena.

Starbucks similarly argued in its subpoena response that the legal motion “effects a previously unannounced and unjustified change in OLMS policy,” and said the new policy violates the Administrative Procedure Act, the First Amendment, and the LMRDA.

The legal questions over what information the DOL can require on annual labor management reports come as unions and the Biden administration have tried to bring greater transparency to businesses’ anti-union spending.

Last month, the SEIU, on behalf of the their affiliate Starbucks Workers United, requested that the OLMS investigate whether Starbucks should be required to report its payments to management-side law firm Littler Mendelson.

The union argued that the firm “intimidated” and “attempted to collect sensitive information on their organizing efforts” through overly broad subpoenas issued on behalf of Starbucks, “exactly the conduct” regulated by the LMRDA.

Rachel Wall, Starbucks’ director of corporate communications, said the request from SEIU is “baseless” and a bid “to rewrite the rules Congress and courts have established for federal litigation.”

When asked for comment about the SEIU request, the OLMS said in a statement it “does not comment on specific complaints, nor does it confirm or deny the existence of investigations.”

However, during this administration, the agency has “focused on exercising the full scope of its authority” under the LMRDA, the agency spokesperson added.

The enforcement stance has helped “ensure that employers and labor consultants are reporting expenditures related to surveillance or persuader activities, as required by law,” they said.

The spokesperson pointed to OLMS data showing that the number of labor relations consultant reports—known as LM-20 forms—filed with the agency had more than doubled during the administration.

From fiscal year 2021 to 2023 the number of such reports submitted to the agency rose from 314 to 761, according to OLMS data.

Rebecca Rainey

Legal Fight

So far, the courts have sided with the DOL in its efforts to obtain the information.

A federal court in October determined that Starbucks was required to hand over the information, but didn’t address the underlying question of whether the DOL can collect travel expenditure data on its annual report.

Instead, the judge found that the agency had the right to request the information to investigate whether Starbucks broke the law by failing to report the activity in the first place, and thus was owed the material to determine whether there was a violation.

“For the purposes of enforcing a subpoena any argument that OLMS changed its reporting requirements is irrelevant,” US District Judge Marsha Pechman said in her October ruling. Starbucks hasn’t appealed.

Amazon contends that legal decision was flawed. The e-commerce giant argued its case is distinct from Starbucks because it’s made reasonable efforts to hand over the information, and that OLMS should have “sufficient” information to decide if Amazon violated the LMRDA.

The Chamber’s Spencer said the Starbucks decision is “in some ways correct” because the agency does have the authority to investigate potential violations of the LMRDA. He noted, however, that the disclosures sought by the DOL likely fall under an exemption for managers under the law.

Spencer added that he suspects the DOL “never intends for any of these cases to get into court where they would have to defend their novel interpretation of the statute.”

In the other corner, Funk said that businesses are conflating “the two issues of subpoena and persuader activity” and that the subpoena is being used by the agency to research whether or not they’re violating the law.

“The reason you’re seeing such a violent, aggressive response to these subpoenas is because Littler Mendelson, Starbucks, and Amazon are all used to operating above the law,” Funk said.