Starbucks’ Howard Schultz faces grilling from Bernie Sanders in Senate

Starbucks founder and billionaire Howard Schultz on Wednesday defended the coffee company’s approach to unionising workers in a congressional face-off with liberal firebrand senator Bernie Sanders .

Sanders, who chairs the Senate committee that oversees US labour laws, has accused Starbucks of union-busting since company workers first voted to unionise at a store in Buffalo, New York, in December 2021.

In his opening remarks, Sanders accused Schultz of leading “the most aggressive and illegal union-busting campaign in the modern history of our country”.

Schultz said in his prepared statement that Starbucks is negotiating with workers but union representatives have “insisted on unlawful preconditions such as ‘virtual’ bargaining and participation by outside observers”.

After some workers unionised, Starbucks has started the bargaining process in more than 200 stores, he said. “Our business also depends on having trust, connection and shared commitment among Starbucks, its partners and its customers,” he told members of the panel.

The exchanges between Sanders and Schultz were often testy. At one point, Sanders asked Schultz: “Have you ever asked a Starbucks employee worker ‘if you hate Starbucks so much why don’t you go work somewhere else?’”

Schultz said it was inaccurate. “That is not exactly what I said. Can I tell the story?” Schultz replied.

“I have some other questions right now, I’m sorry.” Sanders responded.

Schultz also defended attacks on his net worth, which stands at $3.7bn, according to Forbes. “Yes, I have billions of dollars — I earned it,” he told senators. “No one gave it to me. And I’ve shared it constantly with the people of Starbucks.”

The hearing is a tense showdown between two former US presidential aspirants — Sanders ran in the Democratic primary in 2016 and 2020, and Schultz considered running in 2020 as an independent.

It also marks a test for the US labour movement, which has stalled since scoring high-profile victories at certain Starbucks and Amazon locations in the past two years. Unionised workers hit a record low of 10.1 per cent of the US workforce in 2022, according to the Department of Labor.

Sanders, a vocal proponent for labour rights, had threatened to subpoena Schultz to compel him to testify at the hearing after Starbucks initially offered a different company official. Schultz stepped down as Starbucks interim chief executive earlier this month but remains on the board.

After Sanders’ insistence that Schultz personally appear at the hearing, “it’s hard not to read a personal animus into this hearing”, said Milan Dalal, a former Senate staffer who founded the lobbying firm Tiger Hill Partners.

Starbucks was once widely considered to be one of the most progressive employers in the US, providing staff with college tuition, fertility treatments, and healthcare benefits. But that distinction has faded as Schultz has battled unionisation.

Labour experts say it is unusual for executives to get personally involved in efforts to halt a union campaign. Even though Schultz was between stints as Starbucks chief executive when workers in Buffalo held the company’s first union election, he flew in to meet workers personally in an effort to convince them not to unionise. Workers have since filed nearly 100 unfair labour practice complaints against Schultz himself, saying that he promised in closed-door sessions to improve working conditions if baristas stopped unionising.

“Starbucks is doing what most employers do, but on steroids,” said Rebecca Givan, a labour relations professor at Rutgers University. “I think he miscalculated. I think he thought that the brand and his reputation would be sufficient to keep workers from organising, but if anything, that backfired.”

Last week, Starbucks faced a shareholder petition at its annual meeting asking the company to disclose more information about how it establishes collective bargaining policies. The company must disclose the results of the shareholder vote by the end of Wednesday.