Starbucks Released A Big Announcement Regarding Union Negotiations

Starbucks has released the findings of a third-party evaluation of the company's actions in light of union activity in its stores. The report highlights numerous areas of improvement, as the company has stated in a press release it will reaffirm "its commitment to the principles of freedom of association and the right to collective bargaining." Further, the company says it plans to "prioritize workstreams... to ensure we fulfill our promise to offer a bridge to a better future for our partners."

In a letter to shareholders, Starbucks board chair Mellody Hobson and Jørgen Vig Knudstorp, chair of the board's nominating and corporate governance committee, laid out the findings in detail. They include issues surrounding how the company handled unionizing stores in light of the COVID-19 pandemic as well as consistency in communications, discipline, and discharge.

"The assessment was direct and clear that while Starbucks has had no intention to deviate from the principles of freedom of association and the right to collective bargaining, there are things the Company can, and should, do to improve its stated commitments and its adherence to these important principles," writes Hobson.

Moving forward in the new year

Starbucks engaged Thomas M. Mackall, an expert in labor relations, to conduct the assessment and deliver the report on his findings to the board. Mackall was given the full cooperation of both the company and the board and was directed to be objective, independent, and critical in his work.

He found no evidence that Starbucks has made use of a "playbook" of anti-union tactics and that the company's progress in dealing with unionization has been consistent. That includes "a stronger governance process, more on-the-ground support, a dedicated labor relations team and more bespoke management training." Mackall also found that Starbucks has actively encouraged team members to vote with participation increasing from 60 to 80 percent in single-stores.

Starbucks shared with Tasting Table a public letter written by CEO Laxman Narasimhan acknowledging past failures, the rights of workers, and outlining the steps the company plans to take in reaffirming its commitment to fair union negotiations. Chief Partner Officer Sara Kelly, he writes, reached out to Workers United — the main union representing Starbucks employees — to emphasize the company's commitment and hope that fair deals can be negotiated in 2024.

"As evident during COVID-19 and its aftermath, we do not always get it right," Narasimhan explains. "Despite having the highest employee engagement scores and the lowest attrition rates in the restaurant industry, and industry-leading benefits, we know some of our partners have been dissatisfied. They've chosen to express it in the way they see fit — and they have the right to do so."