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Unionization Efforts Compel Starbucks to Raise Wages, Labor Leaders Demand for Extended Benefits

Photo Credit: Jason Redmond/AFP via Getty Images

Recent attempts by Starbucks workers to unionize have compelled the company to raise their wages. However, as the pay rises – which will take effect from Monday this week – union leaders are demanding extended benefits. These benefits should have no bargain, said the leaders.

Following its employees’ unionization efforts, Starbucks announced in May that it would raise its wages. The company has also stated that, in addition to the wage increase, there will be additional benefits such as credit card tipping. However, a Starbucks franchise in Seattle has stated that it will not extend the benefits because it must first go through a bargaining process.

In a letter to Starbucks CEO Howard Schultz, labor union leaders stated that benefits could be provided to employees in unionized stores without the need for bargaining. Other benefits mentioned in the letter include faster sick time accrual and reimbursement for medical travel, particularly for those seeking abortion and gender care.

The letter read, “Workers United refuses to stand by while Starbucks cynically promises new benefits only to non-unionized workers and withholds them from our members.” It was signed by Lynne Fox, the president of Workers United.

Two hundred of Starbucks’ 9,000 shops have already joined a union. According to data from the National Labor Relations Board, the 40 chains are still undergoing deliberations.

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“The law is clear: once a store unionizes, no changes to benefits are allowed without good faith collective bargaining,” Starbucks states in a website fact sheet in response to the union’s demands.

According to the website, employees are still entitled to the perks that were in place at the time they submitted their petition, but they are only free to bargain for future changes to working conditions, benefits, and pay.

Legal advisers say the case may be referred to an administrative law judge at the National Labor Relations Board.

Stephen Holroyd, a lawyer at Jennings Sigmond known for his expertise in dealing with labor unions and has worked for the NLRB, said, “Once a union has been certified, an employer is obligated to bargain with that union before making any changes to terms and conditions of employment.”

Holroyd added that the union’s action might indicate that Starbucks is acting the way it is purely as a result of the efforts to unionize.

Benefits for employees, possible?

Daniel Sobol, an attorney with Stevens & Lee, said federal courts and the NLRB have different views on the issue.

“If [ benefit enhancements are] done solely to chill unionizing, that could be an issue,” Sobol said. Additionally, he said that because of inflation, Starbucks might not be required to provide unionized workers an increase.

A lawyer for Starbucks Workers United said they had filed another two cases against the company. He also said Starbucks’ current benefits are a clear response to its employees’ unionization efforts.

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“If the union says they have no objection, then the employer can absolutely give them that benefit,” said Catherine Creighton, director of the Industrial and Labor Relations school at Cornell University in Buffalo, New York. She added that under the provisions of the law, companies need to send a notice to the union and offer a bargaining opportunity.

In the latter half of its fiscal year 2022, Starbucks says it will invest over $1 billion in staff pay increases, training, and retail upgrades. The CEO of Starbucks canceled the company’s repurchase program so that it could devote its resources to enhancing its retail spaces and raising employee perks.

This week, the new wage will take effect. Paycheck increases by 5% will be given to workers with at least two years of experience. A 7 percent or a 10% boost above the market rate will be given to those with more than 7 years of experience.

Source: CNBC

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