Good morning. Today, we're covering a favorable development for U.S. labor unions — as well as protests in Kenya, primary elections and "White Chicks" at 20.
Coffee and a contract
Labor unions have won some big victories in the past few years, including in the auto industry and Hollywood. But if organized labor is going to have a true resurgence in the United States, it can't simply win raises for workers it already represents. It will need to organize new workers and reverse the decades-long decline in union membership. That's why recent events at Starbucks have been so significant. The company and the union — which represents more than 400 of Starbucks's 10,000 U.S. stores — appear on track to reach a contract that will cover wages, benefits and disciplinary policies. This would be a major milestone. Even after workers win a union election, companies often drag their feet when bargaining a contract. If years pass with little or no progress, union supporters may get demoralized and leave, causing the union to unravel. By contrast, a contract could encourage workers to unionize across Starbucks and other food and beverage chains, which are part of an industry that is overwhelmingly nonunion. What's remarkable about the Starbucks development is that it comes after the company spent years resisting the union campaign, which began in Buffalo in 2021. Starbucks's former chief executive, Howard Schultz, portrayed organizers as outside agitators. He warned employees not to be "distracted" by them. But in February the two sides announced that they would soon begin hashing out a framework for a contract. What explains the turnaround? In today's newsletter, I'll explain four key factors.
1. A winning streak. While unions are broadly popular with Americans, they tend to be especially popular among the young and politically progressive, which describes much of Starbucks's work force. This made it difficult for Starbucks to contain the union's growth. The campaign slowed down in mid-2022, when Schultz introduced benefits that did not apply to union stores. But organizers regained momentum as union supporters framed their campaign as a fight for liberal values like L.G.B.T.Q. rights. The union won roughly 100 elections in 2023, which kept the campaign in the news and made it tough for Starbucks to wait it out. 2. A new boss. Schultz, who spent decades at Starbucks before retiring in 2018, returned to the top job in 2022. He focused on fixing operational issues — like outdated equipment and store layouts, which he appeared to believe had fueled the union campaign — and promised to find a successor quickly. That turned out to be Laxman Narasimhan, the C.E.O. of Reckitt, a consumer products company based in England. Though little was known about Narasimhan's feelings on unions at the time, Starbucks corporate officials who worked with him later told me that he took a pragmatic view — believing it could be less costly to engage the union than to fight it. His stance differed from that of Schultz, who viewed the union as a personal affront. It appeared to threaten his self-image as a generous boss. 3. External pressure. Socially minded investors pressed Starbucks to commission a report on its labor practices. It found that the company had fallen short of its commitments on labor rights. A coalition of unions spent heavily to back three labor-friendly candidates for seats on Starbucks's board. And the company became a target of protests and boycotts tied to the war in Gaza, which escalated after Starbucks sued the union over social media posts supportive of Palestinians.
It's hard to know how much these developments weighed on the company, but Starbucks appeared to take them seriously. It announced a new board committee to oversee employee relations shortly before it released the labor report. The company began talks with the union on how to bargain a contract a few weeks before the scheduled vote on the labor-friendly board candidates. And Narasimhan suggested on an earnings call that the protests and boycotts were having "a negative impact" on business even though they were "driven by misperceptions." 4. Government help. U.S. labor law is relatively weak: If a company fires an employee for union organizing, the National Labor Relations Board can seek back pay. But it can't fine the employer. And the process often takes years. Still, the N.L.R.B. tends to be more active and creative under Democratic administrations. It has been especially active and creative and under President Biden. The board issued more than 100 complaints against Starbucks and went to court to reinstate workers it deemed to have been wrongly fired (though the Supreme Court just reined in this practice). The board even said it would begin ordering unions into existence if an employer's labor-law violations affected the outcome of a union election. Though Starbucks consistently denied wrongdoing and appealed findings against it, the board's actions were another source of pressure that raised the cost of fighting the union. A programming note: David Leonhardt is off until next week, and other Times journalists will continue writing the newsletter until then.
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