News : Why Starbucks got roasted on Capitol Hill

Wednesday, March 29, 2023

Why Starbucks got roasted on Capitol Hill

Mar 29, 2023

With additional reporting from Ari Hawkins

Former Starbucks CEO Howard Schultz testifies before the Senate Health, Education, Labor and Pensions Committee today.

Former Starbucks CEO Howard Schultz testifies before the Senate Health, Education, Labor and Pensions Committee today. | Anna Moneymaker/Getty Images

GRANDE INQUISITION — On Capitol Hill today, longtime Starbucks leader Howard Schultz faced a litany of accusations of union busting as Starbucks employees around the country vote to unionize. The sharpest critic of all? Sen. Bernie Sanders (I-Vt.), the progressive champion and two-time presidential candidate.

“Over the past 18 months, Starbucks has waged the most aggressive and illegal union busting campaign in the history of our country,” said Sanders, the chair of the Senate Health, Education, Labor and Pensions Committee.

Schultz denied wrongdoing, arguing that “those are allegations and Starbucks has not broken the law.”

With over 80 legal complaints from the National Labor Relations Board against the company, though, Democrats on the Hill weren’t buying it. It made for a rough day for the Starbucks CEO.

“It is akin to someone ticketed for speeding 100 times saying ‘I’ve never violated the law because every single time the cop got it wrong,’” said Sen. Chris Murphy (D-Conn.).

As much as anything else, the hearing laid bare the state of labor relations in the United States today. Popular approval of unions is higher than it’s been in over a half-century. The left is making increasingly more noise about what they argue are unfair labor practices. But for now, management at large corporations need only withstand some tough criticism and the occasional financial penalty as the cost of doing business.

“[Congress is] naming and shaming,” Nelson Lichtenstein, the director of the Center for the Study of Work, Labor, and Democracy at UC Santa Barbara, said. “Starbucks, though, has made the decision [to] take a PR hit… but basically plow through and ignore it.”

Hearings like the one today have negligible material consequences, at least for now. There is little legal incentive for management to negotiate with union leadership. While it’s illegal to refuse to negotiate with a union in good faith, NLRB violations carry only small financial penalties. And after a union is certified by the NLRB, if they can’t agree with management on a contract within a year, employees can vote to decertify their union after 30 percent of employees sign a decertification petition. At companies like Starbucks or Amazon, workforce turnover is large enough that a sizable chunk of the workers who voted to certify a union in the first place are gone within a year.

In 2021, House Democrats along with five Republicans passed the PRO Act, which would give workers more legal protections and power to organize, but Republicans in the Senate stalled the bill, arguing that it would inhibit economic growth and innovation.

With Congress in a stand-off, Sanders — the most avowedly pro-union-without-restrictions member of the Senate — has thus pivoted. He’s wielding his committee gavel as a sledgehammer in an attempt to highlight what he sees as vast abuses of power, and inflict pain on the CEOs he holds responsible.

The “naming and shaming” strategy employed by Sanders and his allies is in part an attempt to leverage the politics of the moment: 71 percent of Americans said they approve of labor unions in 2022, representing a huge increase since 2009, when support bottomed out at 48 percent.

Yet organized labor still has a long way to go. Only 10.1 percent of Americans are members of a union, the lowest since the U.S. Bureau of Labor Statistics began tracking comparable data in 1983, when the number was 20.1 percent.

“The way that the law is going to change is you’re going to have… enough of an upsurge, that it’s preferable for employers to change the law than to deal with the constant disruption of workers demanding their rights,” said Barry Eidlin, a professor of sociology at McGill University whose research focuses on working class power in the U.S. and Canada.

For now, though, Schultz was able to take his PR hit on the chin without making any wholesale changes to how Starbucks deals with the unionization of some of its workforce.

“Management does not feel that being anti-union is an egg on its face,” said Lichtenstein, who has written 18 books on organized labor, including ‘State of the Union: A Century of American Labor.’ “No corporation advertises, ‘oh, we have a union, that means we’re a better corporation.’”

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Nightly Road to 2024

HAMLET IN A QUARTER-ZIP — In an age of snarling politics, Virginia Gov. Glenn Youngkin is trying to decide if the 2024 field has room for a different style, write POLITICO’s Daniel Lippman and John F. Harris. While he draws a contrast with Trump, Youngkin shot to national prominence in GOP circles largely on the strength of his deft handling of Trump in his 2021 victory. Pushing him forward are the appeals of people who want what they perceive as a winning alternative to Trump and Florida Gov. Ron DeSantis — as well as the historical examples of Trump and former President Barack Obama, who showed that this is an era that rewards people who seize their moment rather than devote years to checking traditional boxes.

IDENTITY CRISIS POLITICS — Vivek Ramaswamy’s presidential campaign dropped a new political spot in Iowa and New Hampshire today, blanketing broadcast, cable, and radio airwaves as part of a two-week ad buy, reports RealClearPolitics. His campaign has already spent more than $830,000 to prepare their opening salvo and they plan to spend multiple millions more in the days ahead. Dubbed an “intellectual godfather of the anti-woke movement,” the Republican’s message is that the U.S. is in the midst of a national identity crisis.

GONE PAPERLESS — Florida Gov. Ron DeSantis, at least in his official capacity, doesn’t text or email. In place of digital communication, DeSantis communicates exclusively with face-to-face meetings or calls. The governor’s office told Semafor that he prefers in-person conversations because the topics discussed are often nuanced and detailed. But Florida’s unusually broad laws allowing the public access to a whole host of information are another possible reason why DeSantis avoids electronic communication. The combined laws grant access to records and detailed information on government proceedings and meetings.

AROUND THE WORLD

Pope Francis attends a funeral at St. Peter's Basilica on Jan. 14.

Pope Francis attends a funeral at St. Peter's Basilica on Jan. 14. | Franco Origlia/Getty Images

POPE HOSPITALIZED — Pope Francis was hospitalized with a lung infection this afternoon after experiencing difficulty breathing in recent days and will remain in the hospital for several days of treatment, the Vatican said.

The 86-year-old pope, who had part of one lung removed as a young man, doesn’t have COVID-19, spokesman Matteo Bruni said in a statement.

The announcement immediately raised questions about the pontiff’s overall health, and his ability to celebrate the busy Holy Week events that are due to begin this weekend with Palm Sunday.

Bruni said Francis had had trouble breathing in recent days and went to the Gemelli hospital today for tests.

“The tests showed a respiratory infection (COVID-19 infection excluded) that will require some days of medical treatment in the hospital,” Bruni said in a statement.

GHANA ANTI-GAY MEASURE — Ghanaian President Nana Akufo-Addo said “substantial elements” of a sweeping anti-LGBTQ draft bill being considered in parliament have changed, Ari Hawkins reports for Nightly.

“This is not an official legislation of the government,” said Akufo-Addo during a joint press conference with Vice President Kamala Harris on Monday, responding to a reporter who asked if he supports the draconian provisions of the law. He pointed out that opposition lawmakers announced the legislation, and said major portions of it have “already been modified.”

But the president’s claim was quickly refuted by Samuel Nartey George, a member of the National Democratic Congress who is among the lawmakers who introduced the bill.

“The bill remains as tough and as rigid as it was,” George told regional media. “Ghana is not going to entertain any expressions of homosexuality.”

Same sex “conduct” is already illegal in Ghana, but more sweeping measures were introduced by hardliners in August 2021. The legislation would punish anyone who owns or produces material considered to be promoting LGBTQ identity with up to 10 years in prison, raises penalties for same-sex activity and restricts medical procedures affecting the transgender community.

While parliament is expected to make amendments, and the bill may not pass in its current form, the president has not indicated whether he will support the measure without major revisions. “The parliament is dealing with it,” Akufo-Addo said. “At the end of the process, I will come in.”

The row comes amid a crackdown against LGBTQ communities across sub-Saharan Africa. Last week, the East African nation of Uganda passed a measure which prescribes jail terms of up to 10 years for identifying as LGBTQ, and makes certain same-sex activity punishable by death.

“This is an issue that we consider to be a human rights issue, and that will not change,” said Harris, reaffirming the Biden administration’s pledge to expand LGBTQ protections abroad.

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Nightly Number

$700 million

The amount Credit Suisse concealed in accounts from the IRS, flouting a 2014 plea deal the bank made with the Justice Department for wide-ranging criminal tax evasion, the Senate Finance Committee said in a report released this morning. The troubled Swiss bank, which is being acquired by rival UBS, broke the terms of the deal when it failed to tell the Justice Department about transferring nearly $100 million belonging to a U.S.-Latin American family from large undisclosed accounts to other banks for almost a decade.

RADAR SWEEP

DIRTY SMEAR — During the summer of 2017, a 34-year-old American residing in Italy named Hazim Nada received an automated text message from his cell-phone carrier. A few weeks later, he was notified by the bank Credit Suisse that an imposter was asking for banking details, using a nasally, almost child-like voice. Little did Nada know that the puzzling interactions would set the stage for a years-long smear campaign that would falsely link him to the Muslim Brotherhood and cause irreparable damage to his professional career. Desperate for answers and with the help of “vigilant hackers,” he slowly learned that the campaign was likely at the behest of the United Arab Emirates government. David D. Kirkpatrick investigates the UAE’s crackdown on political opponents for The New Yorker.

Parting Image

On this day in 1951: Ethel and Julius Rosenberg (in glasses) climb into a prison van after being convicted of espionage for passing secret information about the atomic bomb to the Soviet Union in 1945. The two were executed in June 1953.