Starbucks’s case at the Supreme Court is a venti lose-lose for the company and the burgeoning unionization movement

Aron Solomon
Spencer Platt - Getty Images

On Apr. 23, the Supreme Court heard Starbucks' challenge to a court ruling that mandated the coffee company to rehire seven employees at its Memphis, Tennessee café after a federal agency found that these employees were terminated for supporting unionization.

In Starbucks Corp. v. McKinney, the Court will weigh, over the next few months whether the company unlawfully discouraged other employees from exercising their rights under U.S. labor law by firing the Memphis workers in 2022. This case is the first to reach the Supreme Court involving an ongoing nationwide campaign to unionize Starbucks stores.

After Starbucks dismissed the employees for a safety violation, the National Labor Relations Board (NLRB) determined that the company had unjustly fired them for backing unionization. Following this, the NLRB requested an injunction to force Starbucks to rehire the employees, a request granted by a U.S. District Judge in Memphis.

Why it matters

The legal issue in the case is the standard courts should use when deciding whether to issue an injunction. Starbucks argues that the lower courts used a relaxed standard, while other federal courts have used a tougher standard.

This case is at the epicenter of the ongoing battle between Starbucks and their employees–and the potential implications of the Supreme Court's decision are significant. It’s not an overstatement to say that how the Supreme Court decides this case could be a game-changer in unionization efforts not only at Starbucks but at other major companies as well.

If the Supreme Court supports Starbucks’ position here, it might establish a precedent that makes it harder for the National Labor Relations Board (NLRB) to obtain court orders requiring businesses to address violations of labor laws.

Yet as attorney Sean Domnick points out, “The Supreme Court has the power here to put significant weight behind the rights of employees to unionize, especially when challenging a company as powerful as Starbucks.”

By upholding the decision of the lower courts, the Supreme Court would be sending the message that when companies such as Starbucks actively work to subvert unionization, it merits close judicial scrutiny.

How it’s going to play out

From what was asked and answered in Tuesday’s oral argument, it seems pretty clear to me that it’s going to be somewhere around 6-3 in favor of Starbucks. The justices seemed nonplussed with the looming reality that this decision would make it more difficult for union organizers to get their jobs back. Such a decision would have a chilling effect on the unionization movement at Starbucks which would be a step backwards in both the history of the company and the ability of workers to form a union where it’s the best option.

Because Starbucks so badly mishandled these unionization efforts, the company has only breathed new life into them. What started small at a Starbucks in Buffalo truly became a movement.

Since 2021, more than 360 Starbucks locations in the U.S. have voted to unionize, representing about 4% of the company's total U.S. company-owned footprint. The unionization movement has been characterized by a push among Starbucks workers across the United States to address concerns such as low wages, set hours, and other workplace issues.

Part of what the Supreme Court will discuss in their deliberations is Starbucks’ tactics. The company denies wrongdoing and says it respects the right of workers to choose whether to unionize. However, because the Starbucks business model was never envisioned to work with unionized employees, tactics such as reducing the weekly hours of workers at stores where unionization votes were successful and closing 23 stores to deter unionization efforts were designed to bust the union movement at Starbucks but instead propelled it to have the Supreme Court review foundational questions that will chart the future path of the company.

In itself, that is a massive achievement for Starbucks workers. The more Starbucks turned up the pressure, the more the burgeoning union at the heart of the dispute, Starbucks Workers United, continued to advocate for the rights of the workers.

So while the Supreme Court's decision to hear a challenge by Starbucks to a judicial decision requiring it to rehire seven union activists in Tennessee reflects the importance of the case in the context of the ongoing national debate about labor rights, for Starbucks, the future is all about picking up the pieces of the company’s cultural implosion it catalyzed.

In March, the company and the union announced a breakthrough agreement on a framework for negotiations. Right now, for a company given so many opportunities to reverse its course and work with the internal unionization movement, that the Supreme Court of the United States needed to get involved is a massive lose-lose: Starbucks obviously loses if the Court sides with the unionization movement, but they also lose if the Court rubber stamps how Starbucks destroyed its own culture.

Aron Solomon, JD, is the chief strategy officer for Amplify. He has taught entrepreneurship at McGill University and the University of Pennsylvania.

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