September 5 Tip of the Week

“How to Respond to Union Activity:  A Lesson from Starbucks”

The Biden Administration has repeatedly confirmed its support of increased unionization to provide better wages and working conditions for employees.  In signaling its support for unions, the administration established a task force to examine union organizing activities and union membership and to identify ways to eliminate some of the barriers unions encounter in their efforts to organize workers.  The task force met and develop approximately 70 recommendations that were adopted by the Biden Administration in an effort to strengthen unions and to increase their success in union elections and other organizing activity. 

            In our recent presentation on various labor and employment law compliance issues, myHRcounsel provided some guidance on how employers should respond to union activity among its employees.  As noted in the presentation, the general rule for employers facing a union organizing campaign is “TIPS” – this refers to how an employer can or cannot respond to the union’s efforts to convince their employees of the need for union representation. 

  • “T” stands for Threats – an employer cannot threaten employees regarding their union activities or their support for a union.
  • “I” stands for Interrogation – an employer cannot interrogate its employees about their union activity or whether they support the union
  • “P” stands for Promise – an employer cannot make promises to their employees about what they will do for the employee if they reject the union
  • “S” stands for Surveillance – employers cannot spy on their employees to determine whether they are engaging in union activity

The National Labor Relations Board is the agency that is charged with enforcing the National Labor Relations Act.  The National Labor Relations Act is the law that was passed to allow employees to bargain collectively with their employers regarding their terms and conditions of employment.  Under the Act, both unions and employers are subject to specific rules regarding how they engage with employees.  How the law is enforced often varies, depending on who is on the Board and Board appointments are political in nature.  This often makes it difficult to clearly understand where the line is drawn on certain types of activity during union organizing campaigns. 

The current organizing activity surrounding Starbucks is instructive in terms of what constitutes a violation of the “TIPS” rules and shows the current approach to union organizing efforts.  Howard Schultz, Starbucks’ CEO, mounted a response to the union organizing campaign that NLRB prosecutors have alleged to be in violation of the National Labor Relations Act.  Schultz responded to the union campaign by taking the position that any new wage increases or benefit improvements could only be made for individuals who worked at stores that were nonunion, claiming that those changes had to be negotiated for employees in stores that elected to be represented by a union.  Schultz communicated this position through a written document and a video that was disseminated to Starbucks employees. In response to this posturing by Schultz, the union seeking to represent the workers waived the right to negotiate any wage or benefit increases, thus clearing the way for their “members” to participate in those changes in the terms and conditions of employment.  In addition, as part of Starbucks’ response to the unionization efforts, it was alleged that individuals who engaged in union organizing activities were treated differently than other neutral employees and were subject to discipline and other negative treatment as a result of their union activity. 

The National Labor Relations Board attorneys filed a complaint regarding Starbucks activities on August 24, 2022/ alleging violations of the NLRA based on the behavior noted above and additional prohibited conduct.  As a remedy, the complaint seeks an order that Starbucks be required to:  (1) provide a notice to all its employees that it has violated the National Relations Act; (2) that such notice be disseminated electronically and in person, with Howard Schultz reading the notice or being present when the notice is read; (3) provide training to their managers and supervisors regarding their obligations under the Act; (4) that all negatively impacted employees be made whole; and (5) that the Board attorneys be given access to all of Starbucks payroll and employment records to ensure that the terms of the order are carried out. 

It is important to note that, in addition to their aggressive response to union organizing activity in its stores, Starbucks has also mounted its own challenge to the validity of the efforts of NLRB employees.  In mid-August, Starbucks sent a letter to the NLRB General Counsel and Chairman of the Board, alleging improper conduct by NLRB staffers and attorneys.  Starbucks claimed that NLRB employees engaged in conduct during elections that unfairly benefited the union seeking to represent its employees.  In response to that letter, the Board stated that if Starbucks believes that there were improprieties in how the union elections were conducted at any of their stores, they should follow the processes set forth in the law to have those objections heard. 

The NLRB prosecutors’ case regarding Starbucks’ alleged illegal conduct is scheduled for a hearing on October 25, 2022.  The outcome of this case will provide employers with a better understanding of how the “TIPS” rules will be enforced in this new labor-friendly environment.  It is unclear at this time whether there will be any additional activity regarding Starbucks claims of improper conduct by Board employees.  In light of this current union activity and the questions surrounding the “TIPS” rules, it is more important than ever to ensure that you understand your obligations under the law.  If you have any questions regarding union activity among your employees, myHRcounsel can assist you in developing an effective response that complies with the National Labor Relations Act.