Starbucks’ Union Settlement Hints At Pickier Litigation Approach

Starbucks Corp. has agreed to give back pay to baristas unlawfully denied shifts at a University of Washington cafe, in a settlement that signals the coffee giant may get more selective about which of its many legal battles with unionizing workers are worth fighting.

The 10 Seattle-area employees were told they couldn’t take “premium pay” shifts during games at Husky Stadium on the university’s campus. Managers denied the more lucrative shifts only to workers represented by Starbucks Workers United, according to the complaint filed by the National Labor Relations Board in August 2022.

The settlement, posted to the NLRB’s website Wednesday, requires the coffee giant to put up notices of workers’ rights at more than 90 Seattle-area stores and send the same notice via text to thousands of workers who were employed in the area since late last summer.

The agreement marks the first time Starbucks has settled a complaint with the NLRB. It’s also the first settlement with the union that doesn’t include a clause saying Starbucks will not admit guilt.

Allegations of union-busting by the company have prompted pushback from shareholders and inquiries from Congress and the United Nations. The NLRB is litigating over 100 complaints against Starbucks, and administrative law judges have found the company in violation of federal labor law hundreds of times across the 17 cases brought before them so far. NLRB officials have also gone to federal court eight times to seek injunctive relief against Starbucks.

Thomas Lenz, who represents employers as a partner at Atkinson Andelson Loya Ruud & Romo, said the settlement could be a response to the mounting litigation pressures Starbucks faces.

“In cases where there’s union activity coast-to-coast, most companies will want to pick their battles and decide which issues are really worth fighting over,” he said. “Even if an employer perceives a need to fight on principle, there’s a cost associated with that—hiring lawyers, going to hearings—so I think sometimes lines are drawn to focus on main issues or to cut costs.”

Starbucks spokesperson Rachel Wall said in an emailed statement that the company agreed to settle to save time and the cost of extended litigation.

“In instances where local managers have failed to comply with our policies or inadvertently erred in their understanding of proper procedure, we have worked with the union, our partners and the NLRB to reach an appropriate settlement just as we have done in several other matters across the country,” she said. “We continue to defend our retail leaders where we believe the allegations are unfounded.”

Starbucks also faces a grassroots campaign from UW student activists to end the university’s relationship with Starbucks due to ULP charges. More than 300 students, staff, and faculty signed a letter asking UW leadership to allow its contract with Starbucks to expire at the end of the month.

Worth a Fight?

In an emailed statement, the union accused Starbucks of a “scorched-earth” campaign to interfere with workers’ rights to organize.

“We fight every day against these clear violations of the law and I’m relieved Starbucks is finally willing to take accountability for something,” Mari Cosgrove, one of the baristas named in the settlement, said in the statement. “The honesty is refreshing and indicative of a potentially more positive working relationship between hourly partners and the company.”

According to NLRB spokesperson Kayla Blado, the agency’s regional offices have facilitated four private settlements between the company and the union covering eight charges in New York, Virginia, Montana, and Wisconsin.

Private settlements only need to go through the NLRB regional director, while this week’s agreement was approved by an administrative law judge. The three parties signed off on the deal June 13.

Lenz said it was likely that Starbucks saw the costs of back pay as negligible compared to what it would cost to litigate the case.

“We’re talking about six or seven games at the stadium per year, and that may be so isolated that Starbucks thought it wasn’t worth fighting compared to a case around a store in downtown Seattle that’s open every day, ” he said.

Sharon Block, a former NLRB member who leads Harvard Law School’s Center for Labor and a Just Economy, said it’s too early to tell whether this settlement would have a ripple effect on other cases. But it could come into play because the charges in the UW case are similar to many other charges that the company illegally withheld benefits from unionizing workers, she said.

“In the past, Starbucks has seemed totally unrealizing that withholding benefits from union employees was unlawful. And now, what’s apparent in this settlement is the recognition that you can’t do that,” she said. “So what happens to all of the other cases?”

The case is Starbucks Corp., N.L.R.B. A.L.J., No. 19-CA-301873, 6/15/23.