'Starbucks has a problem': Labor experts evaluate increasingly messy union fight

Asked about Starbucks (SBUX) accusing the National Labor Relations Board (NLRB) of unfairly rigging union elections and seeking a pause in votes, a legal expert stressed that the coffee giant is still dealing with a larger issue at hand: The rapid unionization itself.

"Starbucks has a problem," Rachel Demarest Gold, an employer-side attorney at Abrams Fensterman, LLP, told Yahoo Finance in a phone interview. "By the time a workforce gets to the point where it's in an election for union representation, the company already has a problem and probably has had a problem for a long time with its employees because satisfied workers don't turn to unions."

The union drive at Starbucks stores nationwide began in December 2021 at a store in Buffalo, New York, and more than 310 stores in 36 states have filed for election petitions. Starbucks Workers United, a subsidiary of the Workers United labor union, is leading organization efforts.

According to records from the NLRB, an independent federal labor agency with leaders appointed by President Biden, more than 220 stores have voted in favor of unionization so far.

Starbucks has strongly opposed unionization, with CEO Howard Schultz denouncing the "threat of unionization" and rolling out pay increases for store employees that exclude those at unionized stores.

NLRB regional offices have issued nearly 20 unfair labor practice complaints against Starbucks. The agency has also asked a court to halt the company's alleged union-busting campaign.

The coffee giant is now accusing the NLRB of impropriety: On Monday, Starbucks sent a 16-page letter to NLRB officials accusing the agency of managing union elections in a way that unfairly helped workers unionize.

"It's tit for tat," Gold said. "It's an adversarial process. So if I find that you have done something wrong and it helps my case, I'm gonna bring it up."

Starbucks's letter to the NLRB

In the letter, Starbucks alleged that the agency's regional staff repeatedly crossed the line of neutrality during an election in the Kansas City area by secretly coordinating "in-person" voting at the NLRB offices during a "mail-ballot" election, giving union representatives confidential election information, disenfranchising voters that did not cast in-person votes, and mishandling ballots.

“The purpose of this misconduct was to tip-the-scale in order to deliver the outcome sought by the Union," Starbucks general counsel stated in the letter. "The result of the misconduct was to ignore — and bypass — the actual sentiments that Starbucks partners may have expressed in properly conducted elections.”

NLRB press secretary Kayla Blado told Yahoo Finance in a statement that while the NLRB "does not comment on open cases," the agency has "well-established processes to raise challenges regarding the handling of both election matters and unfair labor practice cases."

Starbucks Workers United called the letter "absurd" and the allegations an attempt "to distract attention away from their unprecedented anti-union campaign."

The letter from Starbucks counsel requested that the NLRB immediately suspend all Starbucks mail-ballot elections nationwide and asked the board to stay a judgment that ordered Starbucks to reinstate seven workers in Memphis, Tennessee, who were fired earlier this year during an attempt to unionize a store.

The Starbucks letter is not without precedent: After an historic union election victory at a Staten Island warehouse, Amazon (AMZN) by accused the NLRB of inappropriately leading the union to victory by coercing and misleading voters.

According to Matthew Bodie, a former lawyer for the labor board who teaches law at St. Louis University, Starbucks's public letter against the NLRB stands out for the intensity of its rhetoric.

The company is "politicizing this by calling for a nationwide moratorium on these elections," Bodie told Yahoo Finance in a phone interview. "I think what they're angling for is to get some Republican lawmakers on board with questioning the integrity of the NLRB."

Bodie added that the ideal scenario for Starbucks "would be if the Republicans would take it either the House and or the Senate, then there'll be hearings about NLRB election integrity and the Republicans will try and make the NLRB seem like a biased organization that can't be trusted."

Hearings based on the accusations are ongoing, with both sides presenting evidence. At some point, Bodie explained, the Hearing Officer "will make her recommendation to the Regional Director of Region 29-Brooklyn, who is handling the case, on whether there should be a new election. The Regional Director will then make a decision on whether there will be a new election or if the results of the election will be certified."

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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