Saturday, May 21, 2022

Howard Schultz returns to Starbucks as CEO amid labor uprising

Former Starbucks CEO Howard Schultz makes a temporary return to the role he vacated 13 years ago as the company faces unionization challenges.

Schultz spent three decades with the Seattle-based company, helping grow it from 11 stores to a global brand with over 28,000 locations. The company stressed that the position is voluntary, and Schultz will receive $1 in compensation.

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He replaces president and CEO Kevin Johnson, who has left as the company faces a growing demand for unionization among its employees.

More than 160 Starbucks locations have filed petitions with the National Labor Relations Board to hold union elections after two Buffalo, NY stores completed the unionization process in Dec. 2021. The company reported a record-high for its stock last summer, spurring the demand for better wages and benefits.

Schultz never faced a unionization effort, and the company faces of intimidation and retaliation against those campaigning and trying to organize the votes.

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His return prompted a warning from Sen. Bernie Sanders, I-VT, to not stand in the way of unionization.

“If Starbucks can afford to spend $20 billion on stock buybacks and dividends and provide a $20 million compensation package to its [outgoing] CEO, it can afford a unionized workforce that can collectively bargain for better wages, better benefits, safer working conditions and reliable schedules,” Sanders wrote to Schultz.

Ticker Security Last Change Change %
SBUX STARBUCKS CORP. 91.49 +0.52 +0.57%
AMZN AMAZON.COM INC. 3,271.20 +11.25 +0.35%
K KELLOGG CO. 65.61 +1.12 +1.74%

“This is a pivotal moment for Starbucks,” he added. “As you return to the company, it is time to do the right thing: End the union busting and obey the law.”

But Schultz insists he is a friend to employees, citing his family’s difficulties following his father’s workplace injury.

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In a November letter to employees, posted just before the first unionization votes about his own efforts to provide strong benefits for healthcare, college tuition, parental leave and stock benefits.

“No partner has ever needed to have a representative seek to obtain things we all have as partners at Starbucks. And I am saddened and concerned to hear anyone thinks that is needed now,” Schultz wrote.

But some union organizers complain that the company instead provides inconsistent hours, poor training, understaffing and low wages. Others point to the company’s early days and claim Schultz took a strong anti-union stance after he ascended to his post as CEO of the then-fledgling company.

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Harvard Business School Historian Nancy Koehn told NPR she expects Schultz will set up “listening sessions” with employees to help shape the company’s priorities upon his return.

“Howard has an uncanny and I think unusually strong ability to understand the zeitgeist of a particular moment — socially, politically, psychically, economically,” she said.

The Associated Press contributed to this report.

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