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Starbucks Announces Wage Raises — But Only for Stores That Aren’t Unionizing

The union has filed charges with the labor board over the move, which is potentially illegal.

Starbucks Executive Chairman Howard Schultz speaks at the Starbucks Annual Meeting of Shareholders at McCaw Hall in Seattle, Washington, on March 21, 2018.

Starbucks announced on Tuesday that it is raising wages for its employees and offering a number of new benefits only to workers in stores that aren’t unionized or in a union drive – a move that is potentially illegal.

The company will raise its wages to a base of $15 an hour, or a 3 percent raise, whichever is higher, for its nonunion employees. These changes were previously announced when the union drive was in its nascent stages last year.

Currently, about 63 percent of Starbucks employees make under $15 an hour, according to data from the Economic Policy Institute. It’s unclear how that percentage will change with union members and unionizing workers excluded from the pay raise.

CEO Howard Schultz said in an investor call that the exclusionary pay increases are “investments” that “will enable us to handle the increased demand — and deliver increased profitability — while also delivering an elevated experience to our customers and reducing strain on our partners,” or employees.

The company claims that it can’t make changes to unionizing workers’ pay during the union drive, but Starbucks Workers United says that it’s actually illegal for the company to exclude unionizing workers from new benefits.

“We have filed charges against Howard Schultz’s threats that union stores won’t receive these benefits. That’s not how labor law works and Starbucks knows it,” the union wrote on Twitter.

A union campaign is supposed to be conducted in “laboratory conditions,” meaning that a union drive needs to be conducted in “conditions as nearly ideal as possible” in order to “determine the uninhibited desires of the employees,” according to the National Labor Relations Board (NLRB). Raising wages only for employees not in a union drive could compel workers to drop their organizing campaign or convince them to vote against the union when an election is conducted.

“If Starbucks said, ‘Drop the union campaign and you’ll get this wage increase and better benefits,’ that’d clearly be illegal,” Matthew Bodie, a former NLRB lawyer and law professor at Saint Louis University, told the New York Times. “Hard to see how this is that much different in practice.” Bodie added that these pay increases could also be in violation of the mandate for employers to bargain with unionizing workers in good faith.

If the NLRB validates the union’s charges that the selective raises are illegal, it wouldn’t be the first time that the labor board has found illegal conduct in Starbucks’s anti-union campaign. Last month, for instance, the labor board found that the company had illegally fired seven pro-union workers in Memphis, Tennessee; the company is also facing other charges from the NLRB that may result in the company facing legal consequences for its union-busting moves.

The union says that these benefits are only being offered because of the union drive. “Congratulations to all the hard work of partners organizing at Starbucks – our campaign has pressured Howard Schultz and Starbucks to announce many of the benefits that we’ve been pushing for since day one and we’ve proposed at the bargaining table in Buffalo,” the union said.

Indeed, the union drive has been remarkably successful. As of Tuesday, Starbucks Workers United has successfully unionized over 50 stores. The union has only lost about five of its union votes so far, with the results of three others still in contention.

This is a success rate of about 85 percent, with new victories coming in nearly every day. The union recently surpassed 250 union petition filings, spanning across 36 states.

The workers are a major part of the currently surging labor movement, and Starbucks and Amazon workers involved in unionizing will head to the White House on Thursday to meet with Vice President Kamala Harris and Labor Secretary Marty Walsh to discuss the labor movement and how workers can keep spreading union efforts to other companies and sectors.

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