*The views expressed in this article do not represent the views of Santa Clara University.
“Starbucks Coffee in O7, Mannheim (Baden-Württemberg, Deutschland)” by 4028mdk09
While the clash between Starbucks Corporation and its non-unionized employees is not the first—nor the last—altercation between employees and employers, it is one of the latest. Without labor unionization, Starbucks dictates the substance of its employment contracts, leading to wage disparity across the board when some of its employees require more than one job to reside in the city they work in. However, what does the internal discord of a global conglomerate mean to consumers? What might happen to Starbucks' products if it loses control of its employees? Will Starbucks increase the price of its coffee? Will individual stores close?
The closing of l6 stores has already begun. Citing safety concerns, Starbucks CEO Howard Schultz stated that the company would shut down 16 stores. While there is no overt connection between the formation of unions and these store closures, the union representing Starbucks ("Union") has indicated an underlying association between these events. Additionally, Starbucks faces a multitude of employee strikes and walk-outs.
While there is no primary precedent that outlines Starbucks' actual market share, it is undeniable that it has perceived to own a fantastically large cornerstone in the coffee industry. Starbucks boasts of having more than 32,000 stores operating in about 80 countries. In short, Starbucks is a coffee powerhouse. Thus, it appears Starbucks is here to stay and profit off cheap labor and high product margins.
The Federal Government is protecting labor unions by restricting unfair labor practices and punishing ‘union busting’ under the National Labor Relations Act.
Unions in the United States have had a complicated and adversarial relationship with employers and the government since the founding of the National Labor Union in 1866. Labor unions have power that credibly interferes and challenges the contractual relationships between employer and employee that would otherwise go unchecked. Unions, such as the Laborers' International Union of North America and the National Education Association, have the collective ability to bargain for the wants and needs of their members. In addition, Congress's enactment of the National Labor Relations Act (NLRA) and its enforcing body, the National Labor Relations Board (NLRB), indicated that the government would protect and promote an employee's ability to engage in workplace democracy without the fear of social, legal, or workplace retaliation.*1 The Supreme Court held in the landmark case, N.L.R.B. v. Jones & Laughlin Steel Corp., that those NLRB determinations are to be treated as conclusive and its powers investigatory.*2 Interference with NLRB investigations results in subsequent fines and imprisonment.*3
The Federal Government should not be involved in intrastate activities; as was argued in Consolidated Edison Co. of New York v. N.L.R.B.*4 Yet, the court was not overtly sympathetic to this argument.*5 The Federal Government is allowed to intervene in intrastate business to protect national policy. While an individual state controls intrastate activities, intrastate conflict can arise where businesses influence states nationally.*6 With the rise in cosmopolitanism and vast chain-retail company presences, such as Starbucks, the distended corporate influences across the United States, coupled with the expansion of unionization, will make it especially difficult for Starbucks to survive the growing pressure of unionizing.
Additionally, the plain language of the National Labor Relations Act illustrates precisely what the American population has begun to refer to these acts as 'union busting,' such as: refusing to collectively bargain or discouraging membership by discriminating regarding the tenure of employment.*7
The most compelling argument against implementing unionization is that their umbrella employee protection invites the Federal Government to make impactful decisions typically reserved for the states. The Government and American Society’s shift toward supporting its laborers at the cost of satisfying company shareholders indicate Starbucks's reluctance towards unionization.
In 1937, the National Labors Relations Act threatened to disrupt the separation of powers, the intermingling of authority between our three branches of the federal government.*8 The most prominent critics of the Act were conservatives and Republicans, who believed that the National Labors Relations Act failed to regulate interstate and foreign commerce and was a vehicle in which the Federal government could uphold its policies and interests over industrial labor relations.*9 The Supreme Court in Jones & Laughlin Steel Corp. did not seemingly address this question, justifying its holding by applying the canon of constitutional avoidance.*10
The Supreme Court has affirmed that the NLRB has constitutional authority regardless of sentiments.*11 That is what makes the conflict between Starbucks and its employees so incredibly layered: there is Constitutional authority allowing the penalization of Starbucks for interfering with its employees’ decisions to unionize, and yet multiple articles
have produced first-hand accounts of behavior eerily similar to what the National
Labors Relations Act does not allow. Furthermore, there is a direct indication that consumers are being affected by this conflict, but no indication that Starbucks’ bottom line is hemorrhaging.
As stated above, Starbucks is a cornerstone of American culture. Thus, if Starbucks’ ability to bring in steady revenue is seemingly unquestionable, we circle back to the same question: why is it so afraid of unions? According to the U.S Bureau of Labor Statistics (BLS), only 1.2% of wage and salary workers in the Food Services and Drinking places aged 16 and older were members of unions in 2021.
Henry S. Farber published an article in the Quarterly Journal of Economics that indicated the existence and popularity of unions correlates to the income gap between the richest and poorest Americans. In the years when unionization decreased, poverty levels declined more so than when unions were popular. The fact that a business culture in the United States places emphasis on maximizing payments to its shareholders and CEOs is not immaterial to Starbucks’ lack of union implementation and related labor law policies. For example, individuals who own company stock argue that unionization places restraints on their pay.
Could it be that Starbucks' fear of Unions has little to do with its actual employees and more to do with a shift in culture that emphasizes employees and not shareholders? The American landscape that frames this narrative echoes an anti-capitalist sentiment, unsympathetic to the shareholders or company CEOs.
Thus, the conflict between Unions and Starbucks may be a symptom of a grander change in American society and its economy and a spark to the beginning of a labor movement impacting conglomerates globally. The NLRB opened approximately 423 cases against Starbucks for Unfair Labor Practices in 2022. The Starbucks and labor union clash marks the beginning of potentially widespread unionization and the preservation of workers' rights. Companies like Amazon, Apple, and Google may be next in the clash between justice-seeking labor movements.
Footnote Citations:
See N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937).
See id. at 24.
Id.
See Consol. Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 220 (1938).
Id.
Id.
29 U.S.C.A. §§ 158 (3)(5). It is also worth noting that the National Labors Relations Act also illustrates unfair labor practices by a labor organization, not just an employer. 29 U.S.C. § 158 (b).
See Jones & Laughlin Steel Corp., 301 U.S. 1 at 29.
Id.
Id.
See id. at 30.