Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

Starbucks Store Unionizing Surge Tests Cash-Strapped Labor Board

April 27, 2022, 5:49 PM

The recent deluge of union elections at Starbucks Corp. stores is pushing the federal labor board to its limit, reflecting a broader influx in labor action as the pandemic winds down.

Flat funding and a restless labor force have created a near perfect storm for the National Labor Relations Board, charged with overseeing every private-sector union election. Election petitions have already swelled by 57% in the first half of the 2021 fiscal year as unfair labor practice charges rose by 14%. At the same time, ballooning inflation and long-term staff declines have made the agency less equipped to fulfill its statutory mission of overseeing union elections, current and former officials say.

“The board certainly has been in a funding crisis for awhile,” said Sharon Block, who served on it during the Obama administration and more recently as the administrator of the Office of Information and Regulatory Affairs under President Joe Biden.

On Wednesday, nearly 150 lawmakers asked the House Appropriations Committee to give the NLRB at least a 34% increase to bring the agency’s budget to $368 million for fiscal year 2023.

“The NLRB is now responsible for far more workers than a decade ago yet has been denied the funding to meet these statutory requirements,” the lawmakers wrote in a letter.

Nowhere is this more evident than with Starbucks, where workers at more than 200 stores have filed for an election since the first store’s workers prevailed in December, a number that’s creating an unprecedented amount of work for the NLRB. The pace continues to increase, with 54 petitions filed so far in April.

Starbucks has been hit with more than 100 unfair labor practice charges from workers and unions.

“I can’t think of anything that has generated this many cases,” said William Gould, former NLRB chair during the Clinton administration.

Staffing Shortages

NLRB General Counsel Jennifer Abruzzo has been sounding the alarm in recent weeks, seeking to pressure Congress into bumping the agency’s funding for the first time since 2014. She has said that field staff in NLRB regional offices—which handle the vast majority of the work—have been cut in half since 2002. At the same time, election petitions are at a 10-year high.

“They do all the investigations, they do all the litigation, they do all of the settlements, they do all of the compliance work, they conduct all of the elections, they do most of the outreach,” Abruzzo said in an interview with Bloomberg Law earlier this month. “They are the public face of the agency, and yet that’s where we are hurting the most.”

Congress didn’t give the NLRB more cash in a $1.5 trillion spending package passed in March, even as the U.S. Department of Labor got a $1.9 billion bump.

Biden’s budget proposal seeks to make up for that, calling for a 16% boost to the agency. But board advocates note that wouldn’t make up for inflation, which has risen by 23% since the last increase in 2014.

The board’s staffing levels are at the lowest point since 1958—about 1,200 workers, Abruzzo said in the interview—while the private-sector workforce has tripled over the same period.

‘All Hands on Deck’

As for Starbucks, Abruzzo’s office has created a special team based in the Denver regional office to handle the surge of petitions, headed by regional director Paula Sawyer. The team is also getting help from NLRB headquarters in Washington.

Starbucks continues to fight organizing efforts by insisting that unions should be made up of multiple stores in a region rather than a single cafe—a legal argument that’s been shot down 30 times by NLRB officials but continues to create more work for the agency.

Beyond litigation over the single-store issue and the investigation of unfair labor practice allegations, the Starbucks unionizing effort has already brought the NLRB to federal court. The agency’s Phoenix regional director last week sued the company, seeking a court order to reinstate a group of workers allegedly fired over their union activities and participation in the NLRB’s investigations.

“It’s all hands on deck and everyone’s stepping up,” Abruzzo said. “They’re all pitching in and doing everything they can, because the last thing that we want is to not be able to effectuate our mission.”

To contact the reporters on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Genevieve Douglas at gdouglas@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com