Although union formation is still considered rare in this day and age, it’s made a comeback recently. Workers across the country are becoming bolder and more unified as they take a harder look at their paychecks, safety standards and overall comfort at work and, in turn, are challenging employers to make changes. One company that exemplifies this trend is Starbucks, which experienced an isolated issue among a tiny group of workers that has steadily become a much bigger situation.
Since 2021, Starbucks workers throughout the U.S. have been pushing to form unions. Employees in favor of unionizing are increasingly voicing concerns regarding their workplace conditions, low wages and set hours, among many other problems. Meanwhile, the leaders at the coffee chain’s headquarters are attempting to deal not only with the repercussions of poor employee satisfaction but also the public consequences of negatively handling the movement toward unionization.
Business owners everywhere, even those who don’t own big corporations, can learn lessons from the players on both sides of this issue.
The Starbucks unionization movement is a steadily evolving push among baristas across the United States to spark change and hold their corporate superiors accountable. Though Starbucks Corp. calls its frontline workers its “partners,” the feeling is not mutual among the company’s minimum-wage staff. Employees, feeling underappreciated and badly treated, have rallied to petition for higher compensation, more time on the clock, and appropriate safety precautions in the wake of the COVID-19 pandemic.
By October 2022, NPR found that workers at roughly 245 Starbucks stores had voted to unionize since the first location did so in 2017 in Buffalo, New York. The Starbucks Workers United union, in conjunction, has filed dozens of unjust-labor actions against Starbucks Corp. Last year, the results from one store, in particular — one of two Starbucks Reserve Roasteries in Manhattan — proved to be tremendously significant. After a seven-week strike, employees at this location won substantial concessions from the company, like better commitments to equipment cleaning, and secured an agreement to hold a bargaining session for a union-negotiated contract.
In an industry with high turnover, unionization at beverage shops such as Starbucks was rather uncommon in decades past. With Starbucks at the forefront, however, the tide is turning. Consider this data from NPR and the National Labor Relations Board (NLRB): A decade ago, less than 4 percent of petitions to unionize came from the food and drink sector, but by May 2022, this sector made up nearly 28 percent of new petitions to unionize. Needless to say, businesses and consumers alike are watching all across the nation and the world to see both the positive and negative ripple effects of the Starbucks movement.
While many business owners might think this movement doesn’t apply to them, there are some key lessons they can learn from what’s happening at Starbucks. Plus, even companies with smaller staffs might find their employees banding together for better pay and working conditions. In fact, it takes only two people to form a union, so you’ll want to keep these things in mind before and after workers start banding together.
To prevent discontentment and frustration among employees, business owners should offer competitive compensation options, including reasonable pay, flexible work hours, comprehensive benefits and cost-of-living adjustments. One initially positive effect at the first unionized Starbucks store in Buffalo was a pay raise to $17 an hour. However, workers were quick to point out that although their wages had increased, their hours had been cut. This interfered with staff members’ eligibility to participate in Starbucks’ health insurance due to a policy that employees had to work a minimum of 20 hours a week to qualify. As a business owner, you need to make your benefits fair and accessible to all workers without limiting conditions. Otherwise, you’ll just be trading one grievance for another.
During the pandemic, some Starbucks workers felt their safety was compromised and asserted that the company pulled back on COVID-19 restrictions too early and too aggressively. The push toward unionizing helped address such safety concerns and working standards.
Regardless of the industry, business owners should ensure acceptable standards for workplace conditions to keep workers safe and encourage them to work effectively and efficiently. To improve conditions, businesses may need to pay for renovations or new tools and equipment or invest in appropriate employee training programs. In addition to benefiting workers, these best practices can help you reap a greater return on investment in the long term.
Amid ongoing unionization efforts, Starbucks’ company-wide and store-level communication with employees hasn’t been consistent or all that empathetic, thereby exacerbating issues between the corporation and its staff. No matter the current level of employee satisfaction, business owners must have open communication with their workers to ensure transparency and accountability. If you have employees seeking to unionize, you should be willing to discuss the issues at hand and consider various compromises or solutions to their concerns. Careful communication can go a long way, and this critical step has the potential to improve turnover rates.
Business owners should never attempt to break apart unionizing efforts that are already underway. Not only will this frustrate workers more, but it is also considered illegal, according to the NLRB’s policies for the protection of employee rights. This is the mistake Starbucks leaders made when an appeal was filed under Starbucks Workers United.
The corporation allegedly pushed management at various stores to coax employees into dropping their union petitions. In response to this and other alleged union-busting actions, like firing workers who engaged in protests and spoke about Starbucks publicly, the NLRB has filed complaints against store owners in several states, according to NLRB records. Business owners who follow in Starbucks’ footsteps in this regard could also find themselves on the receiving end of discriminatory employment claims or wrongful termination lawsuits.
The Starbucks union has presented the company’s top business executives with various proposals, one of which calls for employees to collect credit card tips. As a side effect of the pandemic, the use of online payment applications rose in popularity, and while baristas employed at the time were working harder than ever and facing health risks, they weren’t getting to enjoy any gratuity if customers paid by credit card.
While this situation may, on the surface, seem unique to Starbucks, the reality is that consumers’ preferred payment methods are changing with the advent of digital wallets, online payment apps and other technology. As such, business owners need to keep up with technological trends both to keep customers happy and to ensure employees are being compensated accordingly.
While unionization efforts may be distracting, business owners can’t let personnel issues force everything else to take a back seat. Even as unionization spreads from store to store, Starbucks is still focused on growth and expansion. Last September, Starbucks announced plans to open 2,000 new stores in the U.S. by 2025 and spend $450 million to upgrade existing locations.
Starbucks clearly hasn’t lost sight of its larger business plans and is taking steps to ensure its long-term future. Similarly, you should set the foundation for your business’s longevity now. That may involve obtaining adequate financing for your company and paying off any accrued personal debts to increase credit scores and make it easier to obtain loans. This way, even if your attention is increasingly taken up by snowballing employee issues, at least you’ll be financially prepared to make the changes your business needs. [See our picks for the best small business loans and financing options.]
In addition to committing to brick-and-mortar growth, Starbucks has continued its marketing and reputation management efforts. The company has taken a hit in the local and national press as media outlets cover the continuing unionization efforts, but the company remains determined to generate positive publicity. Last summer, Starbucks publicly shared a message CEO Howard Schultz wrote to employees about new principles that aim to improve employer-employee relations, and it earned significant media attention.
While most small businesses can’t achieve the kind of PR a corporation like Starbucks gets, they can employ the online reputation management services and use their websites to highlight company values. Spelling out plans to improve work culture and current conditions and what you’re doing to benefit employees and customers can help influence internal and external sentiment about your business. However, it’s crucial to actually follow through on what you promise. Announcing changes and then not implementing them will only further encourage employees to unionize and, in turn, hurt your reputation.