Starbucks bargains in good faith, ex-CEO Schultz to tell lawmakers

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FILE PHOTO: Starbucks Chairman and CEO Howard Schultz delivers remarks at the Starbucks 2016 Investor Day in Manhattan, New York

By David Shepardson and Hilary Russ

WASHINGTON/NEW YORK (Reuters) -Former Starbucks Chief Executive Howard Schultz will defend the company’s labor talks before a U.S Senate committee on Wednesday, according to written testimony seen by Reuters.

“Starbucks has engaged in good faith bargaining,” Schultz’s testimony says, arguing “union representatives have improperly demanded multi-store negotiations, delayed or refused to attend meetings, and insisted on unlawful preconditions.”

Schultz will appear before the Senate Health, Education, Labor and Pensions Committee chaired by Senator Bernie Sanders, who will likely question Schultz on what critics say are Starbucks’ illegal anti-union practices.

Democratic lawmakers and the National Labor Relations Board (NLRB) accuse Starbucks of illegally firing pro-union employees and shuttering freshly unionized stores, charges the company denies.

Since late 2021, workers at 294 of Starbucks’ roughly 9,000 U.S. corporate-owned locations have voted to unionize. Unionized baristas say the company has failed to negotiate in good faith by refusing to allow some members to participate via video calls.

Schultz, credited with transforming Starbucks into a global coffee juggernaut, stepped down as CEO for the third time on March 20, handing the reins to Laxman Narasimhan, who has so far not said how he intends to handle the labor unrest.

Under Schultz, the company boosted benefits in an effort to show it cares about its workers, who it calls “partners.”

Schultz plans to tout the coffee chain’s employee stock purchase program, health insurance, sick leave, parental leave, pay and other benefits, according to his testimony.

Many Wall Street analysts also see Starbucks as offering the most generous pay and benefits of its peers in the industry.

However, some of the new benefits did not apply to unionized stores, which the NLRB has said violates labor laws – a point which could be raised during Wednesday’s hearing.

Democrats, who control the committee, dispute Starbucks’ assertions that its wages and benefits are more generous than other retailers.

In a report Monday, the committee said Starbucks raised its starting wage to $15 an hour years after Costco, Target and Best Buy.

The report also found that Chipotle Mexican Grill provides “far more generous and flexible” coverage for college tuition programs.

(Reporting by David Shepardson and Hilary Russ; editing by Chizu Nomiyama and Bernadette Baum)

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