From the website ethicalcorp.org: Employee relations – Prove your case, Starbucks
Submitted on Tue, 11/13/2007 - 3:02pm
Disclaimer - The opinions of the author do not necessarily match those of the IWW. The image pictured to the right did not appear in the original article, we have added it here to provide a visual perspective. This article is reposted in accordance to Fair Use guidelines.
Claims of “union busting” are a drag on down Starbucks’s good name Starbucks finds itself in an unenviable position: being compared to Wal-Mart in its treatment of workers. How does a perennial leader on corporate social responsibility respond? Starbucks seems to be at a loss for an effective answer to accusations it is a “union buster”.
The coffee house giant is having either an unfortunate or telling run of labour rights confrontations with worker unions, particularly Industrial Workers of the World. Starbucks recently reached a non-monetary settlement agreement with the National Labor Relations Board over unionising efforts at a store in Grand Rapids, Michigan, at which the IWW says management “coercively interrogated” employees about union activities.
Starbucks has settled claims of “union busting” twice before in the past two years. At the time of writing, it is defending itself against 32 counts of unlawfully stifling organising activity at hearings being conducted by an administrative law judge in New York.
IWW says the coffee giant not only squelches union activity, but also misrepresents the generosity of the benefits it offers to workers. The union says only 42% of Starbucks’ workers are covered by its health insurance, putting the company in worse straits than even Wal-Mart, which insures 47% of its workforce.
Starbucks, one of the first companies in the US to offer comprehensive health benefits to part-time employees, says the charges by the IWW are baseless and it has, in all cases, denied wrongdoing. While it confirms that only 42% of its employees participate in its health insurance plan, it says many opt out because they have coverage through another employer or family member.
The Seattle-based company has been viewed widely as a model employer. But its current labour troubles and approach to addressing them may spell trouble for that responsible image.
Name games
Although the sums have been small – totalling about $165,000 – with its history of settling labour charges to “avoid unnecessary costs”, Starbucks may, in fact, be validating the unions’ claims against it and selling out its hard-won reputation.
As Zac Bissonnette of bloggingstocks.com points out, with “the demographic Starbucks appeals to … the legal costs to the company may not be material, [but] the intangible damage could be very material”. And he warns that Starbucks’ shareholders “will want to monitor these stories closely”. Investors have, for a number of reasons, seen the company’s share price drop 23% in the past year.
While Starbucks tells Ethical Corporation that it has settled in the past to avoid “protracted litigation over relatively minor charges” and the “unnecessary allocation of resources on both sides”, it says it will move forward with litigation in New York and not settle.
In trying to protect shareholders from legal costs, Starbucks may be putting a dent in its greatest corporate asset – its good name. If it truly is not “union busting”, the time has come to bite the short-term financial bullet and prove it legally and in the court of public opinion.
Useful links:
www.starbucks.com
www.iww.org
www.nlrb.gov