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Sections SEARCH Skip to content Economy SUBSCRIBE FOR $1/WEEKLog in Wednesday, March 29, 2023 Today’s Paper SUBSCRIBE FOR $1/WEEK Economy|Defending Starbucks, Schultz Spars With Party That Once Embraced Him https://www.nytimes.com/2023/03/29/business/economy/howard-schultz-starbucks-union-senate.html * Give this article * * Advertisement Continue reading the main story Supported by Continue reading the main story DEFENDING STARBUCKS, SCHULTZ SPARS WITH PARTY THAT ONCE EMBRACED HIM Howard Schultz faced rancor from Senate Democrats at a hearing where he chafed at “propaganda that is floating around” about company labor practices. * Send any friend a story As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share. Give this article * * * Read in app Howard Schultz met with Democratic hostility and Republican sympathy at a Senate hearing on labor practices at Starbucks.Credit...Kenny Holston/The New York Times By Noam Scheiber March 29, 2023Updated 7:45 p.m. ET Howard Schultz was the star witness, but the hearing revealed almost as much about the party in power as it did about the longtime Starbucks chief executive. When Mr. Schultz appeared Wednesday before the Senate Committee on Health, Education, Labor and Pensions, at a session titled “No Company Is Above the Law: The Need to End Illegal Union Busting at Starbucks,” he encountered a Democratic Party much changed since some of his earlier trips to Washington. In 1994, President Bill Clinton invited Mr. Schultz to the White House for a private briefing on the company’s health care benefits. Two years later, the president praised Starbucks when introducing Mr. Schultz at a conference on corporate responsibility. At the time, Bernie Sanders was a backbencher in the House of Representatives. On Wednesday, Mr. Sanders, now chairman of the Senate committee, appeared to regard Mr. Schultz with something bordering on disdain. Advertisement Continue reading the main story Before a question, Mr. Sanders, a Vermont independent who caucuses with the Democrats, felt the need to remind Mr. Schultz that federal law prohibits a witness from “knowingly and willfully making” a false statement relevant to an inquiry. The chairman then asked him if he had participated in decisions to fire or discipline workers involved in a union campaign. (Mr. Schultz said he had not.) Mr. Sanders noted that an administrative law judge had found “egregious and widespread misconduct” by Starbucks in its response to the campaign, in which nearly 300 of the roughly 9,300 corporate-owned stores in the United States have voted to unionize. And he chided Mr. Schultz for what he said was the company’s “calculated and intentional efforts to stall, to stall and to stall” rather than bargain with the union in good faith. Image Senator Bernie Sanders accused Starbucks of “calculated and intentional efforts to stall, to stall and to stall” in contract talks.Credit...Kenny Holston/The New York Times The hearing was held on the same day Starbucks reported that its shareholders had backed a proposal asking the company to commission an independent assessment of its practices as they relate to worker rights, including the right to bargain collectively and to form a union without interference. Though the proposal is nonbinding, the 52 percent vote in its favor suggests unease among investors over Starbucks’s response to the union campaign. Advertisement Continue reading the main story Mr. Schultz, who recently ended his third tour as the company’s chief executive and remains a board member and major shareholder, seemed as mystified as anyone by his personal change of fortune in the capital. He chafed at what he described as “the propaganda that is floating around” the hearing and told Senator Bob Casey, Democrat of Pennsylvania, that “I take offense with you categorizing me or Starbucks as a union-buster.” LABOR ORGANIZING AND UNION DRIVES * U.A.W. Election: An insurgent candidate won the presidency of the United Auto Workers union, potentially setting the organization on a more confrontational path as it heads into contract talks this year with the three Detroit automakers. * L.A. Schools Strike: Local 99 of the Service Employees International Union, which represents 30,000 education workers including bus drivers and cafeteria workers, reached a tentative deal with the Los Angeles Unified School District, after a three-day strike. * Amazon: Federal labor regulators have concluded that the company’s policy of restricting the warehouse access of off-duty employees is illegal, backing a contention of the union that has represented workers at a Staten Island warehouse since winning an election there last year. When another Democrat, Senator Patty Murray of Washington — the home state of Starbucks — said she had heard from constituents about “widespread anti-union efforts,” Mr. Schultz reminded her that they had known each other for years and that she had “many times actually talked about Starbucks as a model employer.” He responded to Mr. Sanders’s accusation that Starbucks was not bargaining in good faith by noting that the company had met with the union over 85 times. (The union points out that most of these sessions ended within 15 minutes; Starbucks says this is because union members sought to take part remotely.) And he denied that Starbucks had broken the law; it has appealed the rulings against it. Aside from the accusations of labor law violations, the question at the heart of the hearing was: Can chief executives be trusted to treat their workers fairly? Mr. Schultz’s answer was an emphatic yes, at least in his case. He highlighted the company’s wide-ranging benefits — not just health care, including for part-time employees, but stock grants, paid sick leave, paid parental leave and free tuition at Arizona State University. He said that the average wage for hourly workers at Starbucks was $17.50, and that total compensation, including benefits, approached $27 an hour. “My vision for Starbucks Coffee Company has always been steeped in humanity, respect and shared success,” he said near the outset of the hearing. Image Some attending the hearing wore T-shirts signaling their support for the Starbucks union.Credit...Kenny Holston/The New York Times Republicans on the committee were quick to agree. Senator Rand Paul of Kentucky called Starbucks an “extraordinary tale of a company that started out of nothing and employs tens of thousands of people all making great wages.” Advertisement Continue reading the main story Senator Mitt Romney of Utah, a former chief executive, said it was “somewhat rich that you’re being grilled by people who have never had the opportunity to create a single job.” He suggested that while a union might be necessary at companies “that are not good employers,” that was not the case at Starbucks. Democrats’ response came at two levels of elevation. First, they said the company was excluding unionized stores from the benefits that Starbucks had introduced since the union campaign began, such as faster accrual of sick leave and a credit-card tipping option for customers, showing that its commitment to such benefits was tenuous. The National Labor Relations Board has issued complaints calling the denial of benefits to union stores an attempt to discourage workers from organizing. Mr. Schultz said at the hearing that the company couldn’t offer the new benefits at union stores because the law said it must bargain over them first; legal experts have cast doubt on that interpretation. More broadly, Democrats argued that unions acted as a corrective to a basic power imbalance between workers and management. A company might treat workers generously under one chief executive, then harshly under another. Only a union can ensure that the favorable treatment persists, said Senator Edward J. Markey of Massachusetts. Yet in illustrating how far the politics of labor have changed in Washington in recent decades, there was perhaps no better bellwether than Senator John Hickenlooper of Colorado, a former business owner and self-described “extreme moderate.” Mr. Hickenlooper conducted himself more respectfully and deferentially than most of his Democratic colleagues, applauding Mr. Schultz for “creating one of the most successful brands in American history” and declaring that “you know more about economics than I will ever know.” But in his questioning he aligned himself squarely with his party, pointing out that the rise of inequality in recent decades had coincided with the weakening of unions. “I certainly respect the desire to be directly connected with all your employees,” he told Mr. Schultz. “But in many ways that right to organize, and that opportunity for people to be part of a union, is a crucial building block for the middle class and, I think, gave this country stability.” Advertisement Continue reading the main story SITE INDEX SITE INFORMATION NAVIGATION * © 2023 The New York Times Company * NYTCo * Contact Us * Accessibility * Work with us * Advertise * T Brand Studio * Your Ad Choices * Privacy Policy * Terms of Service * Terms of Sale * Site Map * Canada * International * Help * Subscriptions Support independent journalism. 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