Former Starbucks CEO Howard Schultz Testifies in Senate Committee Hearing

I do that union workers have better health care benefits, better paid family and medical leave policies, are much more likely to have a pension, and are less likely to be victims of health and safety violations compared to non-union workers. At a time when 71 percent of the American people now approve of unions, the highest level since 1965, there has been a major revitalization of the trade union movement in this country. Between 2021 and 2022, the number of union elections taking place in America has gone up by 53 percent. And since 2020, workers have voted to form a union in over 70 percent of union elections, rather extraordinary. And now that is the good news for those of us who understand that strong unions are a vital part of rebuilding the declining middle class in this country. That's the good news. The bad news is that in order to combat this increase in union organizing, corporations have engaged in an unprecedented level of illegal union busting activities, which takes us to the focus of today's hearings. Over the past 18 months, Starbucks has waged the most aggressive and illegal union busting campaign in the modern history of our country. That union busting campaign has been led by Howard Schultz, the multi-billionaire founder and director of Starbucks, who is with us this morning only under the threat of subpoena. Let us be clear about the nature of Starbucks' vicious anti-union efforts. The National Labor Relations Board has filed over 80 complaints against Starbucks for violating federal labor law. There have been over 500 unfair labor practice charges lodged against the company, and judges have found that Starbucks broke the law 130 times across six states since workers began organizing in the fall of 2021. These violations include the illegal firing of more than a dozen Starbucks workers for the crime of exercising their right to form a union and to elect collectively bargain for better wages, benefits, and working conditions. Since the first Starbucks union was certified more than 450 days ago in Buffalo, workers at more than 360 stores across 40 states have held union elections. 83 percent of these elections have resulted in a union victory, and today nearly 300 Starbucks coffee shops employing more than 7,000 workers have a union, despite Starbucks' aggressive anti-union efforts. But with nearly 300 shops voting to form a union, Starbucks has refused to sign a single first contract with the union, not a single one. Think about that. Think about a multi-billion dollar company with unlimited resources, with all kinds of lawyers, advisors, consultants, and yet they have not yet signed one contract with any of their nearly 300 unionized shops. Just a few weeks ago on March 1st, an administrative law judge found Starbucks guilty of, quote, egregious and widespread misconduct, end quote, which showed, quote, a general disregard for the employees' fundamental rights, end quote. In a 220-page ruling, this judge found that Starbucks illegally retaliated against employees for unionizing, promised improved pay and benefits if workers rejected the union, conducted illegal surveillance of pro-union workers, refused to hire prospective employees who supported the union, relocated union organizers to new stores, and overstaffed stores ahead of union votes, all clear violations of federal labor law. The judge also found that Starbucks' quote, widespread coercive behavior over six months had permeated every store in the Buffalo market, end quote. The judge ordered Starbucks to reinstate seven workers who were wrongfully terminated, reopened a pro-union store in Buffalo that was illegally shut down, and pay, quote, reasonable consequential damages, end quote, to more than two dozen Starbucks workers whose rights were violated by the company. And let us be clear, Starbucks' egregious union busting campaign is not limited to Buffalo, it is happening all over America. Federal courts in Tennessee and Michigan have issued emergency injunctions requiring Starbucks to reinstate workers who were illegally fired and to prohibit the coffee chain from firing workers for supporting unionization efforts in the future. In Scottsdale and Phoenix, Arizona, the NLRB has charged Starbucks with committing eight violations of labor law when it disciplined, fired, and forced out workers because they cooperated with federal investigations. On November 30th of last year, the NLRB found that Starbucks unlawfully refused to recognize and bargain with the union at its Reserve Roastery store in Seattle. NLRB judges have found that Starbucks illegally threatened to withhold benefits, including health insurance, from pro-union workers in Denver, Overland Park, Kansas, Seattle, Washington, and Ann Arbor, Michigan. The pattern in all of these stores is clear. On one hand, we have workers making $13, $14, $15 an hour with minimal benefits, working 20 hours a week, 30 hours a week, maybe 40 hours a week, depending on a totally unpredictable schedule dictated by their managers. And these workers are out there struggling today to achieve dignity and justice on the job. That's what they are trying to do, and I applaud their efforts. And on the other hand, we have a corporation worth some $113 billion dollars, largely controlled by an individual worth some $4 billion dollars, who are using their unlimited resources to do everything possible, legal and illegal, to deny these workers their constitutional right to form a union. The fundamental issue we are confronting today is whether we have a system of justice that applies to all, or whether billionaires and large corporations can break the law with impunity. I have read Mr. Schultz's comments to the media in which he expresses his strong anti-union views. As an American, Mr. Schultz is entitled to those views and any other views he holds. But even if he is a multi-billionaire and the head of a giant corporation, he is not entitled to break the law. So today I will be asking Mr. Schultz whether he will do what an administrative law judge has ordered him to do, and that is to record and distribute a 14-page notice which states that Starbucks has violated federal labor law, to inform Starbucks employees all across this country about their rights under the National Labor Relations Act, how Starbucks has violated those rights, and to assure that Starbucks will not infringe upon those rights in the future. In other words, I will be asking Mr. Schultz whether or not he intends to obey the law. Further, I will be asking Mr. Schultz another question, and that is whether or not he is prepared to promise this committee that within 14 days of this hearing, Starbucks will exchange proposals with the union, something that it has refused to do for more than 450 days, so that meaningful progress can be made to bargain a first contract in good faith. And let me conclude by saying that what is outrageous to me is not only Starbucks' anti-union activities and their willingness to break the law, it is their calculated and intentional efforts to stall, to stall, and to stall. They understand that the turnover rate at Starbucks and many other similar type companies is high. They understand that if workers do not seek success in gaining a contract, they are going to get discouraged and give up the fight. At a time when we want, in this difficult time in our country, for people to stand up and fight for their rights, to try to destroy the spirit of thousands and thousands of people who are fighting for justice, to my mind is unforgivable. Senator Cassidy.

Thank you, Chairman Sanders. Workers have a right to organize. Now, some may disagree as to whether the protections for workers who choose to organize should also apply to workers who choose not to organize. That's my position, but examining this nuance is not an issue here. The title of today's hearing is 'No Company Is Above the Law: The Need to End Illegal Union Busting at Starbucks.' Now, that clearly presumes that Mr. Schultz and his former employee are guilty before the allegations are fully investigated. The title suggests that this hearing is not a good faith effort to get at the facts, it's a smear campaign against an individual and a company based upon allegations that everyone knows are still under litigation. I am not here to defend Starbucks. I have my own questions about the alleged misconduct, and the law should be followed and upheld. I agree with the chair, no one is above the law. But let's not kid ourselves, this is not a fair and impartial hearing. It's not surprising that Mr. Schultz was reluctant to testify when the majority is using the title of the hearing to slander the witness we're asking to testify. It sends a signal. The majority points to claims of Starbucks misconduct filed at the National Labor Relations Board to justify today's hearing. These allegations should be addressed and they should be investigated, period. But it would be malpractice for this committee to not also acknowledge that the NLRB is currently facing its own credibility crisis. The NLRB confirmed there are four separate allegations of NLRB employee interference, three of which the employer was Starbucks, pending before the board. It begs the question, are NLRB employees weaponizing the agency against American employers to benefit politically connected labor unions? The National Labor Relations Act was passed to provide an unbiased framework to review disputes between employers and employees. The NLRB carries out the law and is required to protect the rights of all parties in a labor dispute, not put their thumb on the scale in favor of unions. But that is not what we appear to be seeing in practice. An NLRB hearing officer recently substantiated reports of voting irregularities in a union election at a Starbucks in Kansas that could potentially elevate to the level of misconduct by NLRB employees. This includes NLRB staff providing duplicate ballots, supplying union organizers with confidential voter information, providing voter accommodations to employees selected by the union without offering them to all employees. Regardless of the outcome, these actions are in direct violation of federal law and NLRB written guidelines. Now today we'll hear from former Congressman Bradley Byrne. He is representing the brave whistleblower who brought this misconduct and weaponization of the agency to light. He'll be able to provide more insight into how the NLRB is operating in violation of its own practices and procedure in a way which favors labor unions. Let's be clear one more time: workers have a legal right to unionize, companies cannot break the law to prevent unionization. Similarly, unions should not be allowed to intimidate workers into unionizing through coercion or by banning secret ballot elections, which the Supreme Court has stated is, quote, indeed the preferred, end quote, method to gauge worker support of unionization. This is a conversation this committee can have and will continue to have. But the bottom line is that a federal agency has no right to break the law to advance a political agenda, and this should be something that our committee investigates on a bipartisan basis. To properly investigate concerns over labor relations at Starbucks, we should also investigate alleged misconduct of the agency that sought to influence the union representation process. Now, last week's hearing I said we should thoughtfully examine legitimate policy issues, not hold show trials for public shaming. Today looks like more of what we saw last week. There are important bipartisan things the committee needs to accomplish. We need to work together on real solutions to issues facing American families, like the high cost of prescription drugs, getting Americans back to work, driving down inflation that is choking economic growth. Instead, we put CEOs on the dock. But instead of a cage in which the prisoner was formally cut, it's a desk in front of the committee where a judgment has already been made. Thank you, and I look forward to today's testimony.

Thank you, Senator Cassidy. We will now turn to our witness. Mr. Howard Schultz is the former long-time Chief Executive Officer of Starbucks and a member of the Starbucks board of directors. Mr. Schultz, you may proceed with your testimony.

Mr. Schultz, thank you very much. My time is limited, as is the time of all of our members here. So I'm going to be asking you to respond to each question as briefly as you can, hopefully with a yes or no. Do you understand that in America, workers have a fundamental right to join a union and collectively bargain to improve wages, benefits, and working conditions? Do you understand that?

Are you aware that NLRB judges have ruled that Starbucks violated federal labor law over 100 times during the past 18 months, far more than any other corporation in America?

Are you aware that on March 1st, 2023, an administrative law judge found Starbucks guilty of, quote, egregious and widespread misconduct, end quote, widespread coercive behavior, and showed, quote, a general disregard for the employees' fundamental rights, end quote, in a union organizing campaign that started in Buffalo, New York in 2021? Are you aware of that?

All right, Mr. Schultz, before answering the following questions, let me remind you that federal law at 18 U.S. Code Section 1001 prohibits knowingly and willfully making any fraudulent statement.

Were you ever informed of or involved in a decision to fire a worker who was part of a union organizing drive?

Were you ever informed of or involved in a decision to discipline a worker in any way who was part of a union organizing drive?

Have you ever threatened, coerced, or intimidated a worker for supporting a union?

Were you informed of or involved in the decision to withhold benefits from Starbucks workers in unionized stores, including higher pay and faster sick time accrual?

Am I hearing you say that you were involved in the decision to hold benefits from Starbucks workers in unionized stores? Is that what I'm hearing?

Mr. Schultz, have you ever asked a Starbucks worker, quote, 'If you hate Starbucks so much, why don't you go work somewhere else?'

I have some other questions, I'm sorry. A lot of people... I think it's important to hear the facts. All right, you'll have your chance. Will you commit to testifying in any trial where you personally are accused of breaking federal labor law, something that you have been accused of doing nearly a hundred times since 2021?

Was Mr. Schultz were you informed of or involved in the decision to close all Buffalo area stores in November 2021, just days before area union elections, in order for Starbucks employees to listen to you give a speech on why they should vote against forming a union, a meeting the NLRB has determined was a violation of the law?

Are you aware, Mr. Schultz, that an administrative law judge ordered you to record and distribute a video of yourself reading a notice to Starbucks employees about their rights under the National Labor Relations Act, how Starbucks violated those rights, and to assure that Starbucks will not infringe upon those rights in the future, and that this notice must be posted in all Starbucks stores and shared digitally to all of Starbucks employees? Are you prepared to read that notice?

Under your leadership, Starbucks has repeatedly refused to bargain with any of the 7,000 workers in nearly 300 stores where workers have voted to represent themselves through a union. The first group of workers to win their election have been waiting more than 460 days to reach a first contract. Mr. Schultz, will you commit right now that within 14 days of this hearing, Starbucks will exchange proposals with the union, something it has refused to do for more than 450 days, so that meaningful progress can be made to bargain a first contract in good faith? Will you make that commitment?

Will you make a promise to this committee that you will exchange proposals with the union so that we can begin to make meaningful progress?

Three minutes. Senator Cassidy, I'd refer to Senator Paul.

Ayn Rand's Howard Roark points out the ingratitude that man has for the entrepreneur, the creator. Thousands of years ago, the first man discovered how to make fire. He was probably burnt at the stake. He taught the others to light, but he left them a gift that had not been conceived, and he lifted darkness from the face of the earth. Now, Starbucks didn't exactly discover fire, but Starbucks did somehow, somewhere, discover the depths of man's soul that he would pay as much for a double mocha latte as he once did for a week's worth of coffee. My wife Kelly and I tried to get my grandparents some fancy coffee once, and my grandfather, a survivor of the Depression, informed us in no uncertain terms that he drank Maxwell House, 399 for a week's worth of coffee. The Pauls, although German, often missed the zeitgeist of the times. And so while we continue to purchase Maxwell House, others, our contemporaries, bought Starbucks stock and did much better than we did. Who knew people would pay six bucks for a cup of coffee? But I digress. Convincing the public to buy very expensive coffee is not the discovery of fire, but still it deserves respect. Instead, Congress convenes today not to praise Starbucks, but to bury them. The hearing today is convened to attack a private company for its success, when its success has benefited both customers and its employees alike. We've heard of the average wages over $17. We've heard of the 401K plans. We've heard of the parental leave, even for part-time employees. Starbucks giving away tens of millions of dollars each year. They have 100% tuition and fee for bachelor's degree. Maybe it doesn't sound like too bad a place to work. Starbucks is among the most charitable companies in the country. Since 2016, they've had a program to give away unused food to feed over 5 million hungry families. Starbucks didn't do all this under orders from a government bureau. They did it because capitalism works. We have more charity when we have more money, when we have more success, when we have more profit. Nobody buys six dollar coffee in impoverished nations. We're an extraordinarily rich nation. Mark Marion, Tupian, Gail Pooley wrote a book called Superabundance. They say we live in an era of superabundance. Starbucks can only exist in an era of superabundance. The average calorie count since when I was born was about 2,800, has gone up to 3,700. Many would argue you have too much food. You can buy seven times as much food for the same amount of work or hours if you measure stuff in time prices. How many hours of the average worker it takes to buy something? It's extraordinary how wealthy we are, even in inflation-adjusted terms. From 1960 to today, 1950 to today, the average income inflation-adjusted is up four-fold. These are all extraordinary tales. This is also an extraordinary tale of a company that started out of nothing and employs tens of thousands of people, all making great wages, and we're here to say as if this is like Charles Dickens. I mean, we think it's 1812. It's an amazing success story. We live in the era of superabundance. In 1820, 96% of people lived on less than two dollars a day adjusted for inflation. And how much of the world? 10% trade, capitalism, profit. People all the time are talking about we want sustainable this and sustainable that. You know what's sustainable? Capitalism and profit and employment. You want to put all those Starbucks workers in the government dole? You want to have a government coffee company? You know what are we talking about here? If you don't want their coffee, be like my family and buy Maxwell House. But for goodness sakes, don't deride one of the great American success stories. This is not who we are. We are better than this. If the goal is to destroy the goose that laid the golden egg, then by all means this hearing is a good beginning. For me, I see the fabulous success of Starbucks and I understand that luxury, the luxury to spend an extraordinary amount of money for a cup of coffee, is a testament to capitalism. It's a testament to the fact that we have enough money that we can do that. When I walk in Starbucks, I don't see billionaires buying coffee. I see everyone from top to bottom, and they're paying for the coffee because they've decided the quality is worth it. But I don't want to be part of any witch hunt that vilifies any American business. So count me out. Count me as one who is ecstatic that Starbucks is an American success story, and I'll have no part in trashing their success.

Thank you. Senator Hickenlooper, you have to preside soon, so you ask the first questions.

Great, thank you very much, Mr. Chair, Ranking Member. And Mr. Schultz, I appreciate you coming before us. I realize that you've spent your life creating one of the most successful brands in American history. You mentioned the long-held aspiration to make Starbucks a company that balances profitability with social conscience. I think that brand is exceedingly attractive, especially to young people, and I think it's part of your success. I think in many ways, the ability of Starbucks to attract young workers and have them believe in the brand and the vision is a big part of that success. Which I think is part of what this group believes, is that the partnership between the company and the workers is a key to success for any successful company. Many folks who work at Starbucks came because they wanted a chance to work for a company that prioritizes earnings and benefits and wellness. And your testimony described in some detail that you're near the top of that ladder. But we also heard over the last few weeks from other workers, some from Colorado, who told us they came to work for the partner-centric model but were disappointed because they wanted that opportunity to be part of a union and told us that that disillusionment has been very hard for them. So I guess the question I would ask first is that the appearance that so many of the employees have that their organizing efforts are being interfered with seems at odds with the commitment to the partner model and the worker welfare. So how do you respond to those workers who appreciate the Starbucks model but would like to be able to organize with less confrontation?

Thank you. There's been considerable questions about the shrinking middle class. This is... I'm not asking you to be an economist, although you clearly know more about economics than I will ever know. But when you look at the charts, and we've got a chart behind me that demonstrates that as the middle class has shrunk and income inequality has increased dramatically, it has directly coincided with the decline in unions. And I certainly respect the desire to be directly connected with all your employees. But in many ways, that right to organize and that opportunity for people to be part of a union is a crucial building block for the middle class. And I think it gave this country stability that we don't see in the same way that we used to. At its core, I think union organizing is about having a greater say in their workplace. And I think everybody always wants that. Some of the studies show that entrepreneurs start new businesses not necessarily to make money, but not to have someone bossing them around. So what do you say to the workers who want to join together with their peers to unionize their workplaces, despite however great Starbucks has been for them?

Mr. Chairman, I will respectfully notice that you took seven minutes on yours, so Mr. Schultz should have been allowed to finish his statement. He will have as much time as he needs to respond to the questions of 15 people.

Senator Cassidy, I deferred to Senator Romney.

Thank you, Mr. Chairman and Ranking Member Cassidy. I recognize at the outset there's some irony to a non-coffee drinking Mormon conservative defending a Democrat candidate for president in perhaps one of the most liberal companies in America. That being said, I also think it's somewhat rich that you're being grilled by people who have never had the opportunity to create a single job, and yet they believe that they know better how to do so and what's best for the American worker and what's best for the American economy, what's best for growth. I also think it's rich to not recognize the extraordinary conflict of interest we have, which is our Democratic colleagues overwhelmingly get their campaign funds from unions and therefore would like to find every possible way to extend unions, even if an enterprise feels that it's in their best interest to pursue a different course. Now I know that there are a number of reasons why you might wish not to have a union organization in your various enterprises. At the same time, I agree with Senator Cassidy and with your own comments, Mr. Schultz, which is that people have a legal right to form a union. There are some employers that are not good employers, and the union is necessary to protect the rights of those individuals. And that if any enterprise, including yours, has broken the law, that it should be held accountable for having done so. At the same time, the legitimate reasons why an enterprise might choose not to become unionized... I first would note that within your company, there are probably some stores that are union, some that are non-union. Do the non-union store employees get paid less than the union store employees?

Let me ask another question. We'll just make another point. And that is, I would understand why you would not want to have an adversarial relationship between the store manager and the employees that work there. I'd also understand that sometimes in some union enterprises, there are work rules that prevent someone from going from a barista to becoming a manager. And you've indicated that career opportunities for people are enhanced when they're able to move from position to position and become a manager. Is that a concern of yours?

Got me.

Thank you, I appreciate that perspective. And would just turn to one other point, which is we talk about corporate greed all the time as if it's something brand new. Of course, profit incentive and greed has been there from the beginning of humankind. But there's also union greed. Greed exists throughout our society through various enterprises. But let me ask, your company's highly profitable. It was profitable, I presume, very early on, became profitable as time went on. Where does all that profit go? Does it go to pay you and the senior executives? Where's the profit go of an enterprise? Did it all go out in dividends or stock buybacks? Where has your profit gone over the history of your company?

I listened carefully throughout your testimony, and you've made it very clear that Starbucks prefers its workers not to be unionized. But I think you know that decision is up to workers under federal law. I just have been disappointed, I have to tell you, from a number of my constituents I've been hearing from about some of the widespread anti-union efforts at Starbucks, including in Washington state, where the NLRB has certified 19 elections at Starbucks stores, they have issued 71 complaints covering 31 unfair labor practice charges, and NLRB judges have issued two decisions now finding that Starbucks violated federal law. So let me just ask you a simple question. Do you agree that it is workers who get to decide whether they want a union?

I heard you answer Senator Hickenlooper with treating your employees with dignity and respect, which I appreciate. But I am hearing from a number of folks really troubling reports about Starbucks refusing to allow credit card tipping, cutting employee hours, holding the loss of critical benefits like health care insurance and gender affirming care over the heads of employees who are trying to exercise their rights. And I've even heard reports about uncertainty for union employees about whether or not they would receive abortion travel benefits, which all your workers receive. I'm concerned when I hear from my constituents about unfair threats of any kind or denying benefits unfairly, even when the union agrees to waive its right to bargain. I would assume you would agree that that doesn't constitute treating someone with dignity or respect if they are being threatened.

Well, thank you for the answer. I'm giving you the question, so you have a right to respond, that's why I'm asking. But you should know that those are some of the things that I hear, and I wanted to hear your response. And I've also heard allegations that Starbucks has interfered with employees' ability to testify, including in Seattle, where an administrative law judge found that Starbucks did that. Can you respond to that?

I'd refer to Senator Tuberville.

Thank you, Chairman. Thank you, Mr. Cassidy. Mr. Schultz, thank you for being here. I know this is pretty tough at times, but it's good to hear your side of the story. I came from the coaching profession, you know. For years, I talked to young kids every year at the beginning of the year about they all wanted and needed something. I always told them one thing: the only thing you get from me and from this country is an opportunity. And you took that opportunity and ran with it. And you've got a lot of people that work for you over the years and work for your company and made something of themselves. So thank you for that. You've been a huge idol for this country in terms of what you've done. You know, we've heard a lot about what you give to your employees, health care and all that. I fully support unions if people want to join a union, that's fine. I mean, I think that's what this country is about. Sounds like Starbucks employees as a whole, what we've heard so far, have had a great working environment. I understand collective bargaining processes are ongoing with almost 300 individual stores, and you have to negotiate with each one of these individuals in each store. And I know that there have been difficulties in trying to navigate these individual negotiations. I'm sure obstacles have come up that are unique to each store. Is that correct?

You want to be respectful, as we all do, of requests of any employee, and you want to make sure that every person or group that you deal with feels that their rights are being respected and their voices heard. This could even include employees with specific rights and protections in the workplace. Is that correct?

I know this has been a long process that requires considerable effort on your side to do all this. So can you speak to me about the difficulties that you've been having in the bargaining processes, specifically the unique issues that your average person might not understand?

Thank you. I'd like to hear your story about the employee you had the discussion with this morning, if you'd tell... you've got about a minute and a half.

Thank you, Mr. Chairman.

Mr. Chairman, thanks very much. And thanks for calling this hearing. Mr. Schultz, welcome. And I want to welcome the workers in this room who have had to do so much, expend so much effort over many years to have the right to organize and bargain collectively. So we stand with you in that effort. I think that's a right that every single worker in the United States of America should have, the right to bargain collectively, to organize for wages and benefits. And too often in our country, workers don't have that right. I represent a state where workers over generations marched and mobilized and literally bled and died for the right to organize. It wasn't conferred upon them by some CEO or some boss. They had to fight for it. And that resulted, of course, in the National Labor Relations Act, which is still in effect, still the law of the land, despite repeated corporate attempts to undermine it. So we have a lot to talk about, not just with regard to Starbucks, but for workers generally. I wanted to start, Mr. Schultz, with a discussion about one of the firms that Starbucks hired. I'm told that during your tenure as CEO, you hired Littler Mendelson, one of the largest and most notorious union busting firms in the country, that reportedly charges upwards of $600 an hour for their services. It's been reported that in 2021, Starbucks shut down all stores in the Buffalo area, rented out the Hyatt Regency Hotel, flew you and Starbucks senior executives into town, and forced workers to hear you give anti-union talking points, while Starbucks refuses to say how much they've spent on anti-union efforts. It's clear the company is willing to spend a significant amount of money on union busting tactics. And guess what? Under current law, federal law, Internal Revenue Service law, Starbucks is able to write off those costs as a run-of-the-mill business expense.

Expense meaning taxpayers. Taxpayers are subsidizing union busting in the United States of America, including that of Starbucks. So Mr. Schultz, I'd ask you as a private citizen in your personal capacity, do you believe that corporations should have the right to get a tax break, a taxpayer-provided subsidization, a tax break for union busting activities?

I didn't ask you about Starbucks. I asked you about your personal view. Do you think that that provision should stay as the law or should be changed?

Do you support that? You support the provision that allows a company to hire union busting firms and conduct other activity that interferes with the rights of workers to organize? I understand it's the law, but you're saying you support it, you would not support a change, is that correct?

Well, look, you go to just March of this year. An administrative law judge issued a 218-page decision finding, quote, egregious and widespread misconduct demonstrating a general disregard for the employees' fundamental rights, unquote, in Buffalo, New York. So I think there's plenty of evidence on the record in terms of what the National Labor Relations Board has set forth in their opinions and their work. Let me ask you another question before my time has expired. There have been complaints, and I want you to answer this if you know anything about it, that Starbucks is spying on its workers as they try to organize. Again, another National Labor Relations Board administrative law judge recently wrote that Starbucks used headsets to, quote, closely supervise, monitor, and create the impression that employees' union activities are under surveillance. So we've heard about this with regard to other companies. Do you believe, and again this is in your personal capacity and you realize where you are now, do you believe that workers should have the basic dignity at work not to be surveilled by their employers?

I understand you're not aware of anyone surveilling anyone. You're not aware of that?

Do you support that?

Thank you.

I'm going to have to cut you off. That was a good story. We'll come back to that because it sounds like something to do. I hope you do. I'll defer to Senator Markwayne Mullin.

Well, thank you. And considering the chairman doesn't want to hear any of that information because I believe he's pretty biased in his opinion already. Mr. Schultz, I'll give you an opportunity to finish up. You'll do it quickly.

No, and I mean, if you're anti-union as a CEO, you're anti-union busting or you're for union busting. I'm not saying you're anti-union. I'm just saying that it seems like to me, as a former CEO, not nearly at the success that you were at, sir, and I'm not trying to defend your company because quite frankly politically we're on totally different ends of the spectrum. And so the irony of this hearing is actually kind of funny. And I do want to point out some hypocrisy about this hearing with the chairman, and it's not trying to get personal. All this information is going to be very public. But the fact that you can't defend your company because you want to have a good relationship with your employees and you believe in employee value, which we all do. Any CEO knows the success of our companies are based on our employees. We get that. But it seems like unions today all they want to do is fight with their employer, the same employer that is hiring those team members. And that friction causes a very volatile and tough workplace. And if the company and employees aren't in the same boat, rowing in the same direction, then neither one can be successful. And unions themselves, if you're part of a union, you can never be an executive, you can never be a manager, and never be a CEO. And if you can't be an executive or a manager or the CEO, then how are you actually going to implement the changes that the unions want in those positions to begin with? And it seems like they actually hold back their team members. But I take offense to the chairman pointing out that all CEOs are corrupt because they're millionaires. You know, if you make a lot of money, you're corrupt. If yet, it's bothering to me because Mr. Chairman, you yourself have been very successful, rightfully so. Glad you have. You've been in office for 28 years, and your wife has amassed a wealth of over eight million dollars. And in fact, your quote on being wealthy and being a millionaire was, well, if you write a bestseller, you can be a millionaire too. If you can be a millionaire, why can't Mr. Schultz and other CEOs be millionaires and be honest too? If that's the case, then why is it that Mr. Schultz, who actually creates jobs and a bestseller of a book, isn't creating any jobs? Why is it that he's corrupt and you're not? Why is it that all CEOs are corrupt because they're wealthy, and yet our chairman, who is wealthy, and I'm glad you are, you're not? Guys, the government's role is to create an environment for entrepreneurs, for go-getters, for job creators, for world changers to be successful in life. The U.S. government is designed for people that want to succeed, can go out and achieve anything that we choose to. But when you lean towards socialism, what you think is government is the answer and unions are the choice, and if you're against us then you're dead wrong and you must be corrupt. That's not the world we're living in. That's not the America that we believe in. And I'm not against unions. If you want to choose to be in a union, be in a union. But if you choose not to, then you choose not to. And that's why I'm good with right-to-work states. That's honestly why unions actually thrive in Oklahoma, and we're a right-to-work state, because it creates a happy environment and a good environment because employees get to choose what they want to be part of, and the employer can have a say in it. What is wrong with choice? What is wrong with employees having a choice? What is wrong with the CEO defending his company and openly saying that he is providing good benefits and paying higher than everybody else, but yet if you're not part of a union, you're also paying starvation wages? What hypocrisy? What bias? Chairman, you're our chair of the Health, Education, Labor, and Pensions Committee. We shouldn't have a bias approach. We should have what's best for America and all those that want to thrive and work in it. And so, while we politically disagree, Mr. Schultz, I applaud you for your success, and I applaud all the CEOs out there for their success, and all the employees that work hard that are in the same boat that's making their companies great.

Thank you, thank you, thank you. Well, let me respond. Mr. Senator did mention my name, I think. And I think you got an all-time record here. You made more misstatements in a shorter period of time than I have ever heard. Please correct. Well, if I'm worth eight million, excuse me, no, public excuse me. Yeah, go ahead. All right. Excuse me. Yes, sir. If I'm worth eight million dollars, that's good news to me. I'm not aware of it. That's a lie. All right. Number two, public records. That's probably looking at some phony right-wing internet stuff. It ain't true. No. All right. You should read beyond that. It is not true. All right. Public records. No, it is not public record. Okay. It is not a million on your public records. I've got the mic down. Number two, I've got it. Did you make a statement? You had your time. Okay. All right. You're not telling the truth. Second of all, you got no evidence that I have ever said that all CEOs are corrupt. I have never ever said that. Furthermore, what this hearing is about is whether or not you talk about being pro-union. Really, what this hearing is about is whether workers have the constitutional right to form a union. The evidence is overwhelming, not from me but from the National Labor Relations Board, that time after time after time, despite what Mr. Schultz is saying, Starbucks has broken the law and has prevented workers from joining unions to collectively bargain for decent wages and benefits. Senator Baldwin.

Thank you, Mr. Chairman. By acknowledging the leadership role your company has played in providing benefits to workers, you talked about it in your testimony with great pride. Comprehensive health benefits to full and part-time employees starting in 1988, and stock awards to all employees since 1991. You noted, I think, that these benefits allow you to attract and retain a workforce that you call the secret sauce of the Starbucks success. Given this history, though, it is all the more puzzling to me that you're fighting this union drive so fiercely. You've said that a union will sever the direct relationship you have with employees, which you call crucial to anticipating their needs. Instead of leaving it up to your anticipation, a union can ensure that you receive clear feedback about what your workers actually need, free from fear of retaliation. While you call them partners, your workers are limited in their ability to engage with you directly because there's a power differential. And you have power over them and the benefits that they cherish, a power you have shown your willingness to wield involving employees attempting to organize. I find it particularly ironic, especially given your own powerful story, that you don't see this power dynamic. I further, I think this number is right for your U.S. employee base, but you employ over 235,000 people in over 3,000 stores, in my home state of Wisconsin alone. You can't possibly have a direct relationship with all of them. Some intermediary is necessary. If you truly want a direct relationship with your workforce, I would suggest to you that a union can provide that. I also want to note in your written testimony that you returned to Starbucks in April of last year and noted that the company had gone astray, had fallen, lost its way on many levels. You talked about short-termism, an issue on which I agree profoundly. And who were these partners to turn to with this direct relationship during this time that the company had gone astray? In Wisconsin, when I met with Starbucks union organizers, it was immediately clear to me that they take significant pride in their work. You talked a little back and forth about the quote of hating Starbucks so much, why don't you quit or get a job somewhere else. These workers don't want to quit. They want to work. In fact, they seem to share so many of the same goals for the company that you've laid out so eloquently in your testimony. All of these workers are asking is that you respect their right to organize, which would require you to treat them not just as partners but as equals in the more dynamic that I was talking about. So on that note, Mr. Schultz, it has been almost one year since the first Wisconsin store voted to unionize. I want to ask you on the record, when will Starbucks begin bargaining in earnest with those workers, and when can I expect that I'll hear that the first contract has been signed?

You have about 50 seconds.

There are time limits here. Senator Cassidy.

I defer to Senator Brown.

Thank you, Mr. Chair, ranking member. I think this is an interesting discussion because I recently come from the world of building a business over 37 years, and I've been clear when it comes to unions, they are so important in today's world vis-a-vis large public companies, multinationals. How would you have any countervailing clout unless you didn't have an effective union? I think this is interesting because the restaurant business, I think currently has maybe three to four percent of it unionized. And one of the reasons, since I had a small business for 17 years, 15 employees before it grew, and the best avoidance of a union is to treat your employees like family, pay good wages, have good benefits. You do that, you're probably never going to have a union knocking at your door. But we're talking about an industry here that through COVID went through one of the most traumatic events any small enterprise or business has gone through. This is not a small enterprise or business, but it's in a business that has a high fatality rate due to the nature of it. I don't know currently what you're paying your average employee on the line. That's going to be the first question. And then what the average pay of senior middle management, senior management would be. I always thought it was good as long as you're earning equity in whatever you're doing, that you probably be reasonable there. I don't pull in with a Maserati and all of that. I'd love to know where you're at on that wage stratification first.

Very good. And then do you have a stratum of management above that, district manager, regional manager? And I think what we're most proud of is that the majority of people who are managing stores, managing districts, managing regions started out in our stores. We have hundreds, maybe thousands of beautiful stories that our partners have shared with us about what Starbucks has done for them and their families as a result of the benefits that we created. And those benefits were not created because there was a union. Those were created because of the decisions. And I think that's important to note. But I think what you represent here is a watershed case because you're large. You generally get large because you're successful along the way. And we've got to be careful because I'm going to pivot to something the other side of the aisle has proposed, like the PRO Act. And again, I'm probably the most outspoken Republican on the benefit of unions, but you got to be careful where they go if they're going into the gig economy, into the independent contractors, which is the next chapter on some of this, that will stifle entrepreneurialism. When you look at if you are large, you shouldn't necessarily be held to account unless there are things that you're doing to impede the law in terms of unionizing. You've already made that point that you don't think you've been doing it. All I'm saying is this is important because this will have a ripple effect way beyond your business. And the one thing we can't have is to suffocate what's made this country great, and that is that you do not necessarily have to wrestle with a union if you do all the things that are good for your employees to begin with. Can you honestly say that you've done that throughout the history of your company? And I know you have mobility. It sounds like several different ways you can grow. You have no mobility unless you're growing as a company. But if you've honestly done that...

What was your average wage before COVID? Because you said you're at about 17 now starting. Did you have to raise it over the last few weeks? Wages in May, that's correct. And what was it before?

And one final point, even $17 an hour, that's not a living wage in this day and age.

Shouldn't necessarily be bragging about $15 to $20 wages when you look at the typical structure of a large company. That should probably be $20 plus, like many Main Street businesses pay. And I think of companies like yours, and the larger companies don't do it, you're going to be constantly grappling with maybe here. But on the other hand, unions shouldn't be trying to get involved in companies that are doing a good job, especially Main Street and smaller ones. I wish we had more time. We'll leave it at that. Thank you, sir. Senator Smith.

Thank you, Mr. Chair. Good afternoon or good morning, I think it is still. Mr. Schultz, you repeatedly call your employees partners. Do you value your employees or your partners that want to join a union or have joined a union? Do you value them as much as you value those that have not yet joined a union?

So yesterday I had the opportunity to meet with some unionized Starbucks workers from Minnesota, Gracie and Elizabeth, and they tell me that Starbucks is cutting their weekly hours. They estimate that they're losing $4 an hour in wages because the company won't allow them in unionized stores to access credit card tipping when that's available to workers in non-unionized shops. And they tell me that they are simultaneously understaffed in their stores and unable to get enough hours to pay their bills. If these folks are your partners, why are you treating them differently than the non-unionized workers?

So you have said that several times during this meeting. You've said that you cannot legally provide these benefits without bargaining over them. But you know, I'm sure that the union has specifically stated in this letter, July 15, 2022, that they waived any objection to bargaining on this. It says in the letter, to this end, the union hereby waives any objection that we might have to Starbucks providing union-represented employees with any wage or benefit improvements provided to unrepresented employees. So I don't think this is correct. I think you're wrong.

So I think that the way the law reads is that there is an exception to that requirement to negotiate when the employees make it clear and unmistakable waiver to bargaining. But let me ask you about this. The first Minnesota store union was certified over 320 days ago, and no meaningful bargaining has happened since then, though there have been some meetings. Do you know how long those meetings have been in Minnesota?

So the Minnesota folks tell me that those negotiation sessions have not lasted longer than six minutes. That seems to me, sir, as a failure to negotiate in good faith.

So my observation here is that this feels like a catch-22 because you are not willing to bargain on issues like credit card tipping, while simultaneously you're not coming together to bargain at all. And so I think that is why the employees who are wanting to be in a union feel so frustrated. But I want to touch on one other thing. I've been listening really closely to you today, and I also come from the private sector, had my own company at one time before I moved into the public sector. And I've been really struck by your focus on what an excellent company you are. And honestly, it sounds as if you are personally offended or even insulted that anyone would question you or your company. And it seems as if you feel that only bad companies should be unionized, that there's something nefarious about a company that has done something bad and therefore they need to be unionized, and that Starbucks doesn't need a union because you are a good company. But I think, Mr. Schultz, that is not your decision to make. And I believe that there is an inherent value in coming together to organize that would address this imbalance of power that I think the many, many Starbucks partners sitting behind you and in Minnesota feel. I mean, you're a billionaire and they are your employees. The imbalance of power is extreme, and that is why people want to come together to form a union.

I don't mean to cut you off. We have time limits here, and you have... Wow, I'm not cutting you off. It's your moniker constantly. It's unfair.

You have had more time. I've been generous with the time. Now I'm sorry, but Mr. Chairman, we have a room full of people. We have a panel to go after you. I'm not the only person. Okay. Senator Cassidy.

I defer to Senator Marshall.

Thank you, ranking member. Thank you, chairman. Mr. Schultz, I'm going to change the subject a little bit. Last year, your company decided to close 16 stores across the nation, including the Starbucks down the street here at Union Station, due to rising crime in these cities. Shortly thereafter, you stated that there are going to be many more closures for similar concerns. Your store managers are quoted saying that their employees have not felt safe amid a spike in crime, a surge of assaults, thefts, and drug use. I agree. In fact, I fear for my own staff walking home in this neighborhood. I feared so much that I purchased each one of them one of these noise makers this past Christmas. One of our colleagues' office staff was recently violently assaulted as well. The lawlessness in this country is out of control. When you decided to close those 16 stores because you feared for your employees' safety, did you then and do you still believe that the White House needs to focus on restoring law and order and relaying a message to this country of respect for the brave men and women in law enforcement in this country?

Thank you for your answer and your honesty. It's a sad day for this nation when the crime is so bad that you feel the need to close profitable shops because you can't keep your employees safe at their place of work. And I have to note for the record that every single location you closed, all 16 of them, were in Democrat-run cities. We have another saying. I want to change the subject here again. We have a saying back home that pigs get fat and hogs get slaughtered. We have 645 unfair labor cases brought against you. Based upon the size of the crowd there, there may be some smoke and fire together there. This is your chance. Tell me your side of the story. Tell me why you have so many complaints. Do you feel that there's been a fair negotiation process? Have you and your company been open to the negotiation process? So this is you, give you a minute here, a minute and a half. Just tell me your side of the story.

So this is your chance. So why are you innocent?

Thank you very much, Mr. Chairman. You know, collective bargaining is a fundamentally conservative idea. I've sort of lost track of that. I mean, it's rooted in free market principles, right? The idea that workers should be able to freely join together to negotiate in a free, open negotiation with their employer. And so it's kind of disappointing and sad and wild to me at how sort of partisan this debate has become. Democrats standing up for unions, Republicans saying they support collective bargaining, but not seeing that there's real genius in the idea in a free market society that workers get to come together. It was funny, previous Republican candidates, you know, they really fought hard to work to win the union vote, to speak at union conventions. This sort of new dichotomy we have is in fact new. Mr. Schultz, what do you mean when you say that you abide by the law? So I guess when I do a search online to take a look at cases that have been brought against Starbucks for illegal firings, as you know, New York, Michigan, Pennsylvania, Tennessee, Kansas, Missouri, Washington, decision out of Buffalo requiring you to reinstate workers, calling your practice egregious and widespread misconduct. You say you follow the law, but then of course this committee sees repeated evidence of NLRB orders forcing you to reverse actions that were on their face a violation of the law. So when you say you don't break the law, you abide by the law, you mean you disagree with all of these decisions from the NLRB? You think they got it wrong in all of those cases?

But these are orders from administrative law judges to reinstate employees based upon violations of conduct. Do you think in all of those cases in which judges have required stores to be reopened or workers to be reinstated that they just all got it wrong?

I'm not looking to litigate each specification. I'm just asking to clarify. When you say that you are abiding by the law, you mean that in every case in which an administrative law judge has ordered you to take steps to remediate actions, in every single case they've gotten it wrong?

But the judge is making a finding that you have engaged in conduct that is not allowed by the underlying law, i.e., illegal behavior. In every case, you believe that the judges got it wrong?

Sure, I'm willing to listen.

I understand. I'm just trying to square your testimony in which you insist that you rigorously follow the law with overwhelming evidence from the organizations that are charged with enforcing American labor law that that is not the case. It is akin to someone who has been ticketed for speeding a hundred times saying, I've never violated the law because every single time the cop got it wrong. That would not be a believable contention if someone was to make that before the committee. And so I find it hard to believe your insistence that notwithstanding this extraordinary set of decisions reinstating workers, forcing stores to be reopened, that you are in fact consistently abiding by the law as your testimony is before this committee.

All right, thank you. Senator Cassidy, let me just make a couple observations relative to what has been said on the other side of the aisle. First, we should have, as I mentioned earlier, an investigation into the NLRB activities. They're being made out as if they're a totally objective player in all this circumstance. But here I have a letter from the NLRB confirming that the OIG is investigating allegations of misconduct by NLRB employees in Region 14. Now, we can say, oh my gosh, NLRB is supposed to be neutral. There's tangible evidence that they're not. Secondly, I'm sorry, Senator Murphy left. Republicans down here have totally supported the right of people to organize. I'll also point out that it was Republicans who were standing up for the trade unions when, in his first week of his presidency, Joe Biden canceled the Keystone XL pipeline. Canceled it when those trade unions needed those jobs to make their pensions. And by the way, if I may point out, subsequently the administration has gone hat in hand to Venezuela and the Middle East asking for more production. If they had not canceled that pipeline, that oil would now be coming down to the state of Louisiana, employ more workers in my state refining that way, and refining that oil in the most environmentally sensitive way. So I kind of stand by our side. Mr. Schultz, let's explore a little bit. There's this impression that the unionization effort has occurred organically. But you mentioned earlier, and I think I have some facts here, that the person in Buffalo was making $69,000 a year when she went to work for the store and began to organize. I think that's called salting. But it wasn't as if there's this organic, let's just all come together and unionize. No, workers of the world unite. It was somebody was paid to go in there and create an environment where four out of six people might do it. I don't know if that was the four out of six union. Any comments upon this person getting paid by the union when she came to your store in an attempt to organize it? Well, if that's not a nefarious act, I don't know what is.

Yeah. You made, or your company made, in a 2023 proxy statement that Starbucks has not been found to have violated the law as part of any enforced order of the NLRB. Now, Senator Murphy suggested that you are guilty because you've been charged, and yet you're pointing out that you've not been found to violate the law. Will you kind of reconcile those two statements?

Now, I just made the point, I forget if I requested this, but I would like to enter into the record the letter from the NLRB confirming that they are being investigated for NLRB employee misconduct in Region 14. With that objective, do you have any comments upon what I feel to be the politicization of the NLRB from your perspective? Is that a real thing?

Okay. Now, there's been a lot made that contracts have not yet been achieved, so-called first contracts. I have something here from a Bloomberg report that it took, on average, 465 days for first contracts in a variety of industries to be achieved. More than half took more than a full year to sign. Is it being argued that you're not negotiating in good faith because you have not yet achieved the contract, and yet that seems to be consistent with the pattern of how these first contracts come about? Is there any statement you'd like to make on that?

Now, the NLRB's general counsel, Jennifer Abruzzo, found that you had violated federal labor law by refusing to bargain if some attended over Zoom. I didn't realize it was a law that you had to be able to go over Zoom. But any comment upon Ms. Abruzzo, who some have found to be an advocate for unions, in terms of this particular finding?

Is there a law that says that you have to do it over Zoom if one party chooses to go over? I've never heard of that.

I yield.

Senator Hassan. I'm happy to yield to Senator Markey for a minute, and then I'll follow up after him if that works.

Senator Markey. Thank you, Mr. Chairman, and thank you for this important hearing. And Mr. Schultz, it's good of you to show up, but then again you faced little choice. It's disappointing to me that it took such a long time and required the threat of a subpoena for you to appear before this committee. And it's frankly disrespectful to your hundreds of thousands of employees, but we do appreciate you are finally appearing here. All across America, workers are saying that they've had enough. Rising inequality and outlandish CEO pay for those at the top like you, and a paycheck-to-paycheck subsistence for everyone else. The unionizing Starbucks workers are on the front lines of a groundswell of working and middle-class people banding together to assert their right to organize and form a union and collectively bargain for their dignity. My father used to tell me that you can't beg for your rights, you have to tell them. He lost his finger in an industrial accident as a young man. There was no OSHA. He just said the boss said, see you next week, get back on the job. That was before unions, before rights were put on books. And ultimately, that's what Starbucks workers are doing. Workers in Buffalo are the spark that lit the fire of organizing at locations across the country, including 15 Starbucks locations in Massachusetts. The American people are watching. Public support for unions hit a record high late last year, with 71% of Americans approving of labor unions. So as you sit here denigrating your workers, you're not just morally and legally wrong, you're in the minority. You're out of touch. Union busting is disgusting. I got the chance this week to meet with Caitlin, who is a Starbucks employee from Gardner, Massachusetts. Like you, Caitlin cares deeply about Starbucks. She originally started working for the company in 2006 and came back to rejoin Starbucks in 2021. When she came back, she saw Starbucks similar to how you describe it in your testimony: a company that had lost its way. She saw a company that now only cared about money at the expense of the health and well-being of its workers. So to help save the Starbucks she wanted and loved, Caitlin and her co-workers formed a union. They wanted to revive a wayward company, make your company better. But you vilify Caitlin and her colleagues for caring. You demonize them for participating in their fundamental right to organize. And worse, you and your company set out to punish Caitlin and her colleagues, withholding benefits and raises, cutting hours, and purposefully understaffing to harm your most dedicated partners. So when you give us 10 pages of testimony extolling the benefits that Starbucks offers its employees, that's not what I see. I see Caitlin. I see you squeezing the people who have made you rich with blatant disregard for the law, perhaps because you think if you can hire the lawyers and pay the union busting consulting firms, you can get away with violating other people's rights, with disregarding their dignity, and with silencing working people in America. But here's the thing: if you can pay the lawyers and the consultants and the PR specialists, you can also pay the workers a fair wage. So you say that your father was unfairly fired after he was injured on the job. Your father had no rights, and your family paid the price. That is how your workers now feel. They have no rights. They don't want to be like your father, who had no rights. They don't want their families to have to pay the price for their children the way your father had to pay a price for his children. They want rights. Your father couldn't protect himself. That's all your workers are looking for, so they can protect themselves and their families, so that what happened to your family does not happen to their family. I don't think you understand that, Mr. Schultz. They're just looking to be someone who can protect themselves in the way your father could not. So Mr. Schultz, I would just hope that you would understand that, but I'm afraid you don't. I'm afraid that if you step down as CEO, you don't understand that these people are afraid that your company will lose its way again, and that they need rights that don't just come from you but come from the company. That's what they're looking for. It lost its way, you say you're back, but it could lose its way again. Workers should not be dependent upon you, Mr. Schultz, and your sense of right and wrong. They should be able to have laws, protections, unions that stand up for them every single day of the year. And that is something I think, Mr. Schultz, that you just fundamentally don't understand. These workers are just like your father, and they have no rights.

30 seconds.

I understand completely. Your father was...

Yes, sure.

Can I respond, chairman?

Yes, please.

I'm going to ask you a question, sir. You don't understand. Your testimony says that your own company lost its way, and it will lose its way again unless it is...

Mr. Schultz, tremendous. Mr. Schultz.

Thank you, Mr. Chairman, and I want to thank you for holding this hearing today to discuss reports of illegal union busting at Starbucks locations across the country. So in New England alone, there are 19 unionized Starbucks stores, and a total of eight unfair labor practice violations have been filed by the workers' union. So it is absolutely critical that we hold companies accountable when they fail to comply with federal labor law. Mr. Schultz, I am seriously concerned by reports that Starbucks is coercing and retaliating against workers for exercising their rights to organize, for example, by unjustly firing workers who are involved in union organizing, conducting surveillance of union organizers, and reducing their work hours. Until two weeks ago, you were the CEO of Starbucks, and you continue to be a member of the board of directors as well as a major shareholder. So what I want to know is this: I know that Senator Casey asked you about reports that Starbucks was surveilling workers who were engaged in organizing. Did you have any knowledge that such surveillance took place?

So did you move these workers to other locations, the workers who were engaged in organizing, or reduce their hours, or fire them?

So you had no participation in decisions about moving workers who were engaged in organizing?

No. Were you or your successor involved in any of these decisions? I'm just asking again.

No. Mr. Schultz, the National Labor Relations Board has filed over 80 complaints against Starbucks for this kind of activity that I just asked you about. Starbucks leadership really needs to end these practices. You've said you don't know anything about them. You've also, as you discussed with Senator Markey, indicated in the past that you came back because you felt the company had lost its way. So I will just add my concern about these reports of these activities and urge you as a board member to take action to make sure that the rights of workers who are engaged in organizing activity are protected. Now, as you know, the National Labor Relations Act requires an employer to bargain collectively with its employees' union representatives. It has been more than 450 days since the first Starbucks union was established, yet there has been little evidence of good faith negotiations between Starbucks and its union. The delay is truly unacceptable. As CEO of Starbucks, what exactly did you do to move union negotiations along in a timely way?

Well, the record to date is unacceptable. 450 days. What will you do as someone who continues to serve on the company's board of directors to remedy the situation?

And my understanding is that on multiple occasions, after you schedule them, the company cancels them at the last minute. And I would suggest to you that that is not acceptable. The facts really do speak for themselves on this issue. Starbucks is an outlier here. So you need to quickly shift course and negotiate with your unionized workers. Earlier this month, this committee heard from labor leaders about employers across the country who partner with unions to achieve better outcomes for their companies and the economy. For example, the president of the Teamsters spoke about how they've partnered with United Airlines to build out an apprenticeship program that would create a thousand good-paying middle class jobs. Knowing that other large companies successfully collaborate with unions, why has Starbucks not done more to collaborate with its workers' union?

Well, failing to reach a contract over 450 days, this time period between requests to organize and getting contracts done, indicates that you are resisting unionization as opposed to working with the union and collaborating with it.

So my question is, why not work with the union and collaborate, and why not get the input from the unions to actually improve things for workers?

Senator Lujan.

Thank you, Mr. Chairman. Mr. Schultz, thank you for being here today. I have a series of questions, some of them are yes or no, and I hope to be able to cover a lot of ground here if it's possible. Mr. Schultz, yes or no: does Starbucks provide employees with generous benefits like health care, paid parental leave, and college scholarships?

And you're proud that Starbucks does?

I understand that part-time employees need to work at least 240 hours over the course of three consecutive months, or roughly 20 hours a week, to be eligible for those benefits. Is that true?

I don't want to ask one of your lawyers. I believe that to be true. Okay, I see a lot of head nodding from employees behind you, but nonetheless we can submit a question to the record so that you can definitively say yes or no to that. Mr. Schultz, what happens if workers' hours fall below a threshold as I suggested? Are you able to answer that question?

So I understand that Starbucks has a widespread pattern of reducing worker hours in stores that have unionized, after conversations with constituents from New Mexico. That's what I've learned. And why does Starbucks reduce workers' hours at unionized stores?

Mr. Schultz, you announced in May 2022 that the company would raise pay and double training hours at its more than 10,000 corporate-owned stores, but you said that these changes and others would not apply to unionized stores or stores where workers had filed for union elections. Mr. Schultz, yes or no: did you say this?

Was there a finding at the end at the NLRB along these lines as well?

And yes or no: do you claim that Starbucks cannot make changes to benefits without good faith collective bargaining?

The National Labor Relations Board requires an employer and the union to bargain in good faith about wages, hours, and other terms of employment until they agree on a labor contract, not after. Are you familiar with that?

And yes or no, just so that I understand correctly: is it true that Starbucks can hold shareholder meetings virtually, but it refuses to allow some union members to join bargaining negotiations virtually, even if other members are present?

The reason that I asked the question about the reduction in hours, Mr. Schultz, is I certainly commend and appreciate what the decisions were made about respecting employees, about valuing employees as well. What concerns me is practices that have been shared with me: a reduction in hours where an employee maybe once worked full time, 36 hours or so, but then hours were changed at that property for whatever reasons. I'll suggest that I believe it's because of unionization, and I look forward to getting your response there. But then the employees, I'm told, have to be on call or made available if Starbucks decides to add a shift or something. Is that true, sir?

I'm sorry, I'm not asking about a specific store. Starbucks across the country in many properties has reduced hours of employees. That's a fact. Is that correct for union workers?

When someone's hours are reduced, if it's for business, does Starbucks have a policy where that employee has to make themselves available if Starbucks decides to call them back in for a shift that they're not scheduled for?

Okay, well that's not my understanding. I'd be happy to submit something into the record. My concern is this: if a store changes its hours, reduces its open hours, staff schedules are changed, they're reduced from 36 hours to 20 hours, but they're told they need to stay available. Well, how do they get another job if they can't get another job and they're trying to go to school or do something to broaden whatever they're doing in their lives? But then a policy is put in place that says no, we're going to reduce your hours and you have to stay on call, whether it's a manager or not. That's a Starbucks policy. I just hope with all of this that's not a policy.

Mr. Schultz, this company started in a strong way with what it did with its anchor stores out in Seattle and around Washington. You know, there's an old RV case where they got closed and there's allegations that they've got to open up again. I don't know and they're being appealed, so I don't want to get into all of that stuff. But going to what Mr. Markey said with testimony that we lost our way, we want to be here when the panel. I certainly hope that we can find that way back, because a lot of folks support Starbucks because the employees were treated well. And I just hope that that's something that we can work on together. But I look forward to following up with your staff. Thank you, Mr. Chairman.

Okay, thank you. Thank you very much, Senator. What we're going to do is we have a wonderful panel that's going to be up here in a second. You have not voted yet, and I have not voted yet. But yeah, just for 30 seconds, can I be recognized to submit a letter into the record from the Albuquerque store?

Without objection. Let me conclude this session with Mr. Schultz in saying that we are looking at a situation where one side has all the money, has all the power, has all the consultants, and can hire and fire at will. We're looking at another side where workers are making not very good wages, wages that were forced up, as I understand it, by the threat of unionization, so that you now have a $15 an hour minimum wage. We're looking at a situation that Senator Lujan just mentioned. You know, it was in a lovely room here. But out there in the real world, whether it's Seattle or Vermont or wherever it is, people are given arbitrary schedules as to when they can and cannot get to work. Sometimes they're working 20 hours a week, sometimes they're working 30 hours a week. Hard to build a budget around that. But at the end of the day, this hearing is not about my best-selling book. It's not about Venezuela. And it's a good book, people should read it. But the issue is pretty simple: workers have a right to join a union. In hundreds of shops that you control, workers have voted to join a union. There is zero, zero union contracts. What I am not only asking you, I am urging you, is do not only the right thing, do what is legal. Sit down. Now you've said you're prepared to sit down face to face. Is that what I heard?

Do it. Sit down in the next two weeks, come back to us and tell us the success that you've had in finally negotiating a first contract. That is my hope. And with that, do I get to say a statement?

The NLRB is not under investigation for anything. All right, their employees are.

We fired the Starbucks... Mr. Saxon, thanks very much for being with us. Thank you, Chairman Sanders.

My name is Jason Saxon. I am a wrongfully fired Starbucks worker from Augusta, Georgia. I started with the company in 2019, hired on as a shift supervisor. In time, I became the go-to not only for baristas but for management as well. I was recognized for my dedication and hard work, as well as the positive and infectious energy and environment I created for partners and customers. I even won Partner of the Quarter. My time at Starbucks wasn't all bad. I met my amazing wife, who is now the mother of our two-year-old Ava. I got to be there for the customers who relied on us during the pandemic and support my co-workers whose families were also going through some really tough times. Being a disabled veteran with osteoarthritis of the spine from my time in the Coast Guard, I felt it was my duty to serve my country again in order to make my workplace more equitable, but also so that my work family could have what they needed to survive. We faced many failed and broken systems working at Starbucks. When we began to organize a union, we saw that Starbucks had failed at honoring its stated mission value, so we chose to live up to them in challenging the status quo. In late 2021, when we started to hear about Starbucks workers in Buffalo organizing a union, I thought we need this too. I reached out to Starbucks Workers United to see how we could get started organizing in our store and began talking to my co-workers. We kept organizing despite increasing retaliation and surveillance. The company sent higher-up managers to our store, and it felt like it was just to surveil us. The regional director who drove down from Atlanta was in our store regularly with the district manager. We were disciplined for minor things that happened in the store, like being written up for being two minutes late, which had never happened before. Terminations increased too. A partner who experienced sexual harassment from one of our managers was terminated after reporting it. They held captive audience meetings; they called them one-on-ones for us to have all of the facts, but the partners were outnumbered every time. In these meetings, partners were being threatened with losing their benefits if they joined the union, which made them feel intimidated and scared. In February 2022, we heard about the Memphis 7, a high-profile case of retaliation and termination against a group of mostly workers of color. Their firing had a chilling effect on me and my co-workers as we saw the company betraying the very values and mission that these Memphis workers were upholding. Despite our fears, we were inspired by the courage and power of the Memphis 7 and filed for our election a month later in March 2022. A week after we filed, they replaced a sympathetic store manager, but it backfired as more people got on board with the union. In April, our store won our election by a landslide, 26 to 5, despite all of the threats and intimidation. Starbucks' retaliation and union busting ramped up even more after we won our election. We were constantly being watched, and managers listened in on our conversations through our headsets. Store hours were constantly changing, and hours kept getting cut. People were fired right on the shop floor. They fired seven of our union members. Two of them were shift supervisors. Two partners requested medical and maternity leave; management refused to sign off on their leave, and they were terminated. Several people quit, including my wife. Some of us were told that we should look for another job. In July, I led a two-day unfair labor practice strike and delivered our demands. A month later, I was fired for supposedly being disruptive. I did not receive any write-up or discipline, and there was no investigation. I was fired after organizing, like so many union leaders across the country. I have filed an unfair labor practice charge with the NLRB, seeking to be reinstated at Starbucks. Big corporations have a lot of power and money, and they are willing to pull out all the stops to deny workers a voice and a seat at the table in a union. That's why I am thrilled to be here today, to have witnessed firsthand Howard Schultz being held to account for his company's illegal behavior. We are coming together to demand better pay, affordable health coverage, and stronger safety procedures. I'm proud to be a leader of this new labor movement. We're taking on corporate power and fighting for all of us. One day, my daughter is going to be able to look up her dad on the internet and find out that I fought for a better future for every Starbucks worker and for all working people. And I know she'll also read that we took on one of the most powerful corporations and won. That's why I keep fighting, and that makes everything worth it.

Mr. Saxon, thank you very much. Our third witness is Sharon Block, a professor of practice and the executive director of the Center for Labor and a Just Economy at Harvard Law School. For 20 years, she has held key labor policy positions across the legislative and executive branches of the federal government, including here at the HELP Committee and at the NLRB. Ms. Block, thanks so much for being with us.

Thank you, Chairman Sanders and Ranking Member Cassidy, for inviting me to testify today. It feels a little bit like coming home. I want to make clear that first, I am testifying in my personal capacity and not as a representative of Harvard Law School. In light of my long service with the NLRB, I'd like to start my testimony by recognizing the great work done by the NLRB career staff with regard to the Starbucks campaign, handling hundreds of cases over the past 18 months. I know them firsthand to be consummate professionals and dedicated public servants. Next, I'd like to address the purpose of the National Labor Relations Act so that we understand the consequences when an employer denies workers the rights guaranteed by the act. The NLRA does not guarantee that workers will be represented by a union or that, if they are so represented, they will secure particular outcomes at the bargaining table. Instead, it guarantees to them a fair process to decide for themselves whether they want to exercise these rights. It is always the workers who make these decisions; it is not the employer's decision. So thought of in this way, you can say that the NLRA establishes the rule of law for the workplace. And so the question for this hearing is whether Starbucks respected this workplace rule of law or has undermined the ability of workers to be treated fairly in their quest to decide for themselves whether they want union representation. I'd like to make three main points in the remainder of my testimony. First, the scope of Starbucks' violations alleged and found so far is beyond the scope of the anti-union campaigns that I have witnessed during my career as a labor lawyer. Second, these violations should not be understood as isolated acts but rather should be viewed as a coordinated campaign to stifle union activity across the company. Finally, it is critical that this kind of egregious conduct is taken seriously because otherwise it will send a message to workers across the economy that their rights are as disposable as a paper Starbucks cup. First, I'll address the scope of the violations. As you have heard already, Starbucks is facing more than 500 allegations that it has violated the NLRA. Already, career board agents have found merit in more than half of those charges. In addition, four board members from both political parties and seven career administrative law judges have concluded that Starbucks has committed violations of the act. While it sadly has become quite common for companies to respond hostilely and often unlawfully to organizing campaigns by their workers, I'm not aware of another company in recent years that has had this many allegations leveled against it or this many allegations found to have merit. The egregiousness of many of the violations also makes this campaign stand out. For decades, board law has deemed the firing of pro-union workers during an organizing campaign as a hallmark violation—that is, a violation that is likely to have significant impact not just on the worker who is fired but also on the organizing rights of co-workers. Already, the General Counsel and ALJs have found more than 20 Starbucks employees have been fired because of their union activity. These discharges and other hallmark violations found is conduct that goes to the very heart of workers' rights under the act. And in the words of the ALJ who reviewed Starbucks' anti-union campaign in Buffalo, "Starbucks has engaged in egregious and widespread misconduct, demonstrating a general disregard for employees' fundamental rights." That observation leads to my second point: what has happened at Starbucks is not just a collection of individual violations; it looks more like a company campaign to stop the workers' campaign in its tracks. Each time the company commits a new violation in a new location or at a new stage in the union's campaign, it is communicating to all of its workers that the rights accorded to them by the law can be defeated, that the company has the resources, the will, and the stamina to undermine the exercise of their rights at every turn. Therefore, I'm also concerned about the wider message that Starbucks' vast anti-union campaign sends. Workers across the country, especially low-wage workers, have also been inspired by what the Starbucks baristas have achieved over the past 18 months. But what do these workers and the public think when they see that Starbucks is willing to break the law that protects these rights hundreds of times? I commend the committee for holding this hearing to show that you take seriously workers' rights to organize and to sit at a bargaining table if they choose, even if their employer is a huge company that really doesn't want them to have a union. It's a bedrock of our democracy that the law applies to everyone, including the most powerful. So I believe that much is at stake in ensuring that Starbucks workers' rights to unionize are protected and respected. Thank you for your time.

Thank you, Ms. Block.

Senator Cassidy is voting, so I'm going to introduce his witnesses. Former Representative Bradley Byrne served four terms in Congress and has more than 30 years of experience as a labor and employment attorney in private practice. Mr. Byrne, thanks for being with us.

Thank you, Senator Sanders, and I appreciate the opportunity to be here. I've submitted a written statement; I won't read that to you. I do not represent Starbucks. I do not have a position about whether they have or have not committed unfair labor practice violations. I do not have a position on whether they should or should not be organized. I believe that's up to the workers, and I trust the wisdom of the workers at the Starbucks stores to make those decisions in appropriately conducted elections. I'm here because I represent a whistleblower, a long-time employee, a professional employee at the National Labor Relations Board, who has come forward to the Inspector General of the National Labor Relations Board with information that there have been significant irregularities, violations of the neutrality of the organization of the agency during at least one such election. Now, why does that matter? The process that we follow in these elections is very important because, as the previous speaker said, it's to make sure that the employees make a free and uncoerced decision. It's not to protect the management of the company, it's not to protect the union, and it's certainly not to protect the NLRB. The NLRB is required to conduct what we call "laboratory conditions" from the time a petition is filed until the time you have an election. That means you've got to make sure that the voting environment is free, that there isn't any coercion, and most especially in this case, that the NLRB isn't putting its finger down on one side or the other. They shouldn't favor the employer, they shouldn't favor the union; they should be professional and neutral in all cases. And in my experience, the vast majority of the employees at the NLRB do exactly that. Unfortunately, we know that at least in one case, that was violated. It was violated egregiously, and a hearing officer found four different violations. Now, here's the problem with all that: if you do something that challenges the integrity of the process, you've challenged the integrity of the vote. And if you challenge the integrity of the vote, you've challenged the integrity of the entire system. Because remember, it's there to give the employees the final decision, not the company and certainly not the union. So what I would like for this committee to do is to use its oversight authority, which is considerable, to look into what happened not just in this one case but to determine if there is a pattern in practice at the NLRB of violating their neutrality obligation. And if there is a pattern of practice, is that pattern practice being directed from people in higher echelons of the agency? I am very concerned by public statements, public positions taken by the General Counsel of the NLRB. The General Counsel is a political appointee; there's nothing wrong with that. That's true when you have Republican presidents, just like it's true when you have a Democrat president. But whether you're a Democrat-appointed NLRB General Counsel or Republican-appointed, you have an obligation to maintain that neutrality. You have an obligation to follow the law. What this General Counsel has done is attack the process for elections altogether. She wants to do away with elections. That greatly disturbs me. It flies in the face of long-settled law, and it also flies in the face of what I've been hearing a lot about recently, and that is workplace democracy, workforce democracy. Well, if we believe in workplace democracy, we ought to give employees the right to vote as to whether or not they want a union. If they do, as they have in some of these Starbucks elections, that's the law; they get to have a union represent them. But in many cases, they vote no. And in the vast majority of cases where I represent an employer in a representation election, the employees chose not to have a union represent them. Fine, whichever way they vote is good. But they ought to have the right to hear both sides of the story, which they won't have if they don't have an election. And they ought to have the ability to walk into a secret place and cast a secret vote so that no one is coercing them to vote whichever way they want to vote. So I ask this committee and the Congress to look at this very carefully because of the seriousness of the situation. It should be all of our concern that we make sure that we have true integrity in these elections so that the result is final and fair. I thank you for the opportunity to be here and look forward to your questions.

Mr. Byrne, thank you very much. Rachel Greszler is a senior research fellow in economics at the Heritage Foundation. She previously served as a senior economist at the Joint Economic Committee of Congress. Ms. Greszler, thanks very much for being with us.

Good morning, good afternoon, and thank you for the opportunity to be here today. To recognize the important role that unions have played in U.S. history in securing important worker safety protections, just wages, and giving workers a previously unheard voice. Many of the things that unions fought for are now protected by law, and the globally competitive economy has empowered individual workers and ultimately weakened unions' advantages. For example, when the only cars that Americans could buy were those that were produced in the U.S., the United Auto Workers union could impose above-market compensation. While that benefited union workers in the short run, it meant more expensive cars, fewer people able to afford them, and fewer workers needed to produce them. When foreign competition entered and unions maintained their excessive compensation demands, automakers began shuttering their doors. Domestic auto production today is one-third of what it used to be two decades ago. In addition to shifting to more service-oriented jobs, American workers have become more educated and more mobile. The average worker changes jobs 12 times throughout their career, which means pensions built on decades of service are less desirable. And rigid pay scales may work for nine-to-five jobs where everybody produces 20 widgets a day, but few jobs today are so routine, and most workers want to be paid based on what they contribute. Consequently, union advantages have been waning. Since 2007, non-union wages have increased 56 percent while union wages have increased only 41 percent. And union pensions have recklessly promised $677 billion in pension benefits that they haven't set aside to pay. Instead of adapting to provide new services that workers value, unions have turned to political force and inciting animosity, depicting company management as 12-foot diseased rats. That is dehumanizing and destructive. Most people want to be part of a team, not a battle. In fact, positive workplace relationships are the biggest indicator of employee satisfaction. Most people also don't want their money taken to pay for things that they don't value, but many unions spend more money on politics than they do representing workers. A recent study found that only 16 percent of teachers' union dues go to the local union that bargains on their behalf; the rest goes to the state and national unions that spend a lot of that money on politics. Unionization hit an all-time low of 10.1 percent last year, and in part that's because employers can be more responsive and accommodating to workers' desires without a union dictating what they can and can't do. Instead of wooing workers, unions are trying to forcibly reverse their decline through laws that would take away workers' privacy, their secret ballot elections, their right to work without paying a union, and the ability to be their own boss. But instead of forcing workers into one-size-fits-all unions, alternative worker organizations could benefit more workers. For example, Major League Sports bargain collectively for some things, but players are able to negotiate their own salaries. Professional organizations like the Freelancers Union provide educational services and may bring workers together to pool benefits. And worker choice models would allow more workers who want to be in a union to have that option while not forcing anybody who doesn't want to be in the union. The Employee Rights Act would secure fundamental rights like privacy and secret ballot elections; it would elevate the voices and the opportunities of union and non-union workers alike, and it would also protect the livelihoods of 59 million Americans who participate in independent work. It would also preserve the small business franchise model. The recent shortage of workers and a longer-term decline in labor force participation is troubling for the economy and civil society. To help more people find meaningful and productive work, policymakers should expand apprenticeship opportunities, enable more portable benefits, and end unnecessary regulations that prevent employers from offering more flexible and generous benefits. Additionally, it is the NLRB's job, not Congress's, to investigate unfair labor practices and to render consistent and impartial decisions. It's also the NLRB's job to oversee fair elections and to protect workers' and employers' free speech rights. I don't know about specific unfair labor practice charges at Starbucks or any of the roughly 18,000 unfair labor practices filed with the NLRB last year, but I do know from my work advocating for workplace flexibility that Starbucks has been a leader in expanding benefits like paid family leave and providing college tuition and high starting wages. The fact that their turnover rate is less than half the industry average suggests that they're doing something right. Running a business and attracting and retaining workers isn't easy, and employers shouldn't have to fear congressional harassment if they don't want a union coming between them and their workers. Thank you.

Thank you very much. Let me begin my question with Ms. Carter and Mr. Saxon. You have heard, I suspect, Mr. Schultz saying that he obeys the law, he respects the right of workers to organize if that is what they want, and that Starbucks does not engage in union busting. Ms. Carter, what is your observation about that?

Thank you for your question, Chairman. So, you know, we were forced to go through multiple captive audience meetings in our store, and our store was the only one to stay open throughout the entirety of the pandemic. Unfortunately, because of a captive audience meeting, a member of management who traveled to our store from I don't know where—I had never met them before—gave multiple partners COVID in this meeting, and we had to shut down for five days. Now, that's a little bit of union busting and outside experiences. But kind of crazy: workers had any option about whether or not they would undergo this meeting with the Starbucks executive? We were scheduled for that meeting, and it actually was our very first one, so we weren't told at this point in time that we didn't have to attend. So it was very much not an option.

Let me get to Mr. Saxon. You heard what Mr. Schultz said. What do you think?

Thank you for your question, Senator. That hasn't been my experience in my store. When we filed, they fired our store manager. He was a very well-liked store manager; he actually helped in our organizing effort. Once he was fired, after that, you know, they brought in an interim store manager and a store manager team to make our store more efficient. That making our store more efficient resulted in us constantly coming into work with everything moved around, so every single day we had to relearn where everything was. With that, the interim store manager would take notes about what she would hear or see on the floor, and she'd write down partners' names. We didn't find out until after we had our election that those people whose names she had written down were going to be written up and or fired. So what I'm hearing from you is you didn't quite accept Mr. Schultz's view that he is not engaged in anti-union activity. They have definitely engaged in anti-union activity.

Let me get to Ms. Block. If I heard you correctly, I think you indicated that what you are seeing at Starbucks is unprecedented in modern history, and that what Starbucks is doing is also sending a signal to the corporate world that in a sense, if they can get away with this, other corporations can as well. Am I right on that?

So I think that that's a fair interpretation of how this campaign may be perceived. And in my mind, most importantly, I'm among other low-wage workers that work for large corporations that have the resources to engage in this kind of drawn-out, long litigation over their activity during an organizing campaign.

What is the purpose, do you think, of these long, never-ending efforts on the part of companies? Why do they do that?

I mean, I try not to speculate on other people's motives, but you know, I am concerned that we are seeing now fewer petitions being filed by other Starbucks employees. There can be lots of reasons for that. So I think, you know, time will tell. But as other witnesses and as other members of the committee have indicated, there is necessarily a huge power imbalance between workers and the company. And so this ability to play things out over a long time just exacerbates that kind of power imbalance.

Oh, Senator Cassidy. Thank you, Mr. Chairman. Mr. Byrne, you represent a constituent of mine who bravely provided information to the NLRB Inspector General of misconduct that she witnessed during the representation election at a Starbucks in Overland Park, Kansas. And specifically, a hearing officer found there was substantial disparity between the communications the region shared with Starbucks and the communications the region shared with the union. What makes this an issue?

Well, you're supposed to be neutral. And so if you're having communications with the union about an issue, you need to have communications with management as well. And if you're not having that even communication, then clearly you're favoring one side over the other. Now, some of the communications seem to me fairly benign, but again, I'm not a lawyer. But I gather it has to be even keel: whatever you do for one, you have to do for the other. That's correct. So one of the things that came out in that is that the labor board agent actually allowed the union to bring two people to vote at the board's office. And this was a mail-in election where you had a stipulated agreement. So the communications weren't about some small things; they were about big things, i.e., the vote. So the stipulation that you shall mail in is really kind of ironclad. And what may seem just kind of like an accommodation really, they should have said no, we can't. You got to go down the street, you got to put it in a mailbox or something like that. A stipulated agreement is the law. The case they have to follow that. Now, if they want to vary it, you go to both sides and say we need to vary it as to this employee or that employee. But you don't just unilaterally do it after having a conversation with the union and you haven't had any conversation with the company. So the guy or gal who might forget to mail it—and I forget the mail bills all the time—that would take out that variable of whether or not they would actually remember to put it in the mailbox or don't have stamps at home or whatever. The variable would be. I kind of get that.

Let me ask you this: can you tell us about records brought forward by your client that implicates a pattern and practice that the union receives accommodations by the NLRB in other regions, not just Kansas?

Senator, let me be very careful how I say this. There's a subpoena that has been issued to my client by the House committee. We're in the process of reviewing that and complying with it. I can say without going into the details of it that there are documents in there that would indicate that the sort of thing that happened in this one particular election has happened in other elections as well. So there is a basis to determine whether or not there has been a pattern in practice, not just in Starbucks cases—although the House subpoena was limited to Starbucks cases—but if it's happened in Starbucks cases, is it happening in other cases across the country?

Let me ask you this: much has been made about the number of filings of unfair labor practices by people seeking to unionize against Starbucks. And yet the NLRB, in a letter that I submitted for the record earlier—in other documents—has stated that over half of unfair labor practices are dismissed or withdrawn. As a labor lawyer, can you speak to the practical use of unfair labor practice complaints in an organizing campaign?

In my experience, the union files unfair labor practice charges, multiple unfair labor practice charges, in every election, and it's part of their strategy for handling it. And as you said, the vast majority of them are thrown out. They don't even get to the point of having a hearing because they didn't have any basis in the first place. So it is a pattern that the union follows to try to intimidate the employer and try to eat at the time in the election.

Ms. Greszler, the Republicans made it pretty clear that we support the right to unionize, but you point out that the labor laws we have are like sometimes 100 years old, and yet you promote some reforms that would modernize it, if you will. And you mentioned, for example, Major League Baseball as a special case but in which merit actually dictates wages along with the baseline of benefits. Can you just quickly summarize some other things that if we were to come together on a bipartisan basis, you would recommend that we do to help people who seek to unionize but to update the whole concept?

Yeah, and there I think the focus has to be on the workers and their choices. And so they may choose to have an organizational structure that allows them to pull together and say these certain benefits are important to all of us and we want to have the same level of them, but there are other things that we want to be able to negotiate more flexibly. And that could also happen across a big company that has multiple different stores in different states that is facing different conditions. And I think the importance there is letting the workers have the choice to do that. And so work right-to-work states allow this, but they also in those states have representation on everybody. So even if the worker isn't paying into the union, they are represented by the union. Now, the union would say that that's a free rider problem. So you could eliminate that by saying the union does not have to represent you if you're not paying them. So if you want that representation, you've got to pay. But if you don't want it, you can be on your own, and you can negotiate by yourself, or you can have a separate type of negotiation. But just having the choice actually be focused on the worker themselves.

Thank you.

Senator Smith. Thank you, Chair Sanders and Ranking Member, and welcome to all of you. It's really I'm glad to see you here, and I want to thank you in particular the Starbucks organizers for being here. Ms. Carter, I understand you organized one of the first stores in the South for the Starbucks workers. And I wanted to ask you something: Mr. Schultz talked repeatedly this morning about this partner relationship that he says that he has with his employees. And I'm just wondering from your experience, how do you have a partnership with hundreds of thousands of people? And as you were doing the organizing in your store, when you were doing your organizing, like what did you find? Why were people wanting to be part of a bargaining unit?

Thank you so much for your question, Senator. So it's about the rules and regulations that are in place and how we are actually able to service the customer. Throughout COVID, we really saw a decline in maintenance in our stores. We really saw a decline in upkeep. And frankly, when you report these concerns to your manager, it just really feels like you're talking sometimes to a wall, as if you're just not getting any response. So that was a huge catalyst to why we wanted to organize. But also, just the wages and, you know, rent rising in our state, it's just not something that worked for us. And also, benefits are just too expensive for us to actually be able to use. So rather than forego a paycheck, we just choose not to have health insurance. So those are a lot of the reasons why we chose to organize. And I'll say Howard Schultz does not feel like a partner to me as well.

Thank you. Mr. Saxon, was there anything you'd like to add to this? And I'm particularly interested in the challenges that folks have dealing with schedules that are uncertain and unpredictable, and you know, you have maybe a promise of some hours that you then don't get. And how would being part of a bargaining unit help you deal with those kinds of challenges as a worker?

Thank you. To answer the first question, you know, some of the challenges that we faced were when I talked to some of my co-workers, they overwhelmingly were talking about the training. The training is one week where you're learning everything and then one week where you're practicing everything. And then for shift supervisors, it's you go through the same barista training and then you do shift supervisor training, which functions the same way. Then scheduling was a huge thing, and this kind of goes into your second question. So I currently have at my store someone who used to get 25 hours a week. They are a very much so a supporter of our union. They have been reduced down to five hours a week. I think that speaks for itself. You know, if they really want to be partners with us, they'd hear those concerns, you know, and they make those changes. And so Starbucks has an empty seat that they leave at the shareholder table for their partners. They fill that seat and hear what we have to say.

Thank you. Ms. Block, earlier this morning when we were talking with Mr. Schultz, several of us were pressing him on this disparity in which the unionized folks were being treated versus the non-unionized people were being treated. I particularly was talking about this ability for the unionized shops to be able to access the credit card tipping mechanism. Mr. Schultz said that his understanding of the law was that he could not do that. Now, when I questioned him, he shifted a little bit and he said, "Well, actually it's our preference not to do that." Could you just address this issue?

Absolutely. Thank you for the question. So I think as Mr. Schultz eventually was sort of circling around, once the union waived its right to bargain over those particular benefits, right, it would not have been unlawful for Starbucks—at least what I can tell from the information that's become public—would not have been unlawful for Starbucks to grant those benefits to the stores that had unionized. But there's another dimension too, in the allegations that in fact withholding those benefits was itself an unfair labor practice. And that goes to the question of why they made that judgment. So if it isn't accurate that the law precluded them from providing those benefits, then you say, well, then what was the reason? And if the reason for withholding those benefits was to retaliate against workers for having a union, to intimidate them in how they exercise that right, then that crosses the line from just not being an accurate sense of the law to being an unfair labor practice. And so that's the question that will now be before the board.

Thank you very much. Thank you, Mr. Chair.

Thank you, Senator Smith. Just a few more questions. Recently, Starbucks raised their minimum wage. I suspect in response to union organizing. But tell me, and certainly it's not just people working at Starbucks. What's it like to try to get by on $15 an hour or $16 an hour? Number one. And number two, picking up on Senator Smith's question about scheduling: do people know if they're going to have 40 hours or 30 hours or 20 hours? If I go to work, how many hours am I going to be working in a week? Ms. Carter.

Thank you for your question, Chairman Sanders. So to address your first question, $15 an hour is not enough to pay bills and actually survive in this world today as we know it. We often struggle. One of the main things I hear from my partners is, "I can't pay my light bill and put gas in my car at the same time," or "I can't put gas in my car at the same time and get groceries." So just imagine having to ration the most important things that you need to survive day in and day out. Another point that I'm really glad you brought up is the hour requirement in order to obtain benefits. And in my four years at the company, I've never had a problem qualifying for benefits until now. Suddenly, I actually just was taken off of Starbucks' benefit policies because I have not been scheduled the appropriate hours or anywhere close to my availability for the better part. Explain that.

To the world out here, what does that mean?

Yeah, so if I am your supervisor, I can reduce your work week. And because I've reduced your work week, you now lose your benefits. Is that what you're saying?

Yes, sir. We have an hour requirement per week. It's 240. I believe I've been removed. So yeah, because of that, my hours were cut basically since around a little bit before Christmas last year. And so I actually just recently lost my benefits because of that hour requirement. So yeah, I mean, having your benefits tied to your hours when you don't get to determine the hours you work doesn't really seem conducive, in my opinion.

Let me go to Mr. Saxon. You know, people have to pay rent. They have to deal with all the needs of the family. How do you do a budget if you don't know exactly how many hours you're going to be working and what kind of paycheck you get at the end of the month?

I mean, you simply can't do a budget when you don't know. Like I said, there is a partner at my store whose hours went down from 25 to 5. They've now had to get a second job. You know, even with that, the scheduling around their second job and with Starbucks... How do you have a second job if you just don't know? Starbucks puts out its new schedule every three weeks. So one week you can have 25, the next week you could have 10, the week after that you could have... That's theoretical. Is that common?

Does that really happen?

Very common. That is very common.

So how do you know if you're going to be able to pay your rent if you've got 10 hours?

You get a second job. You do DoorDash, which many of my partners in my store have had to do.

All right. Tell me about health care. I don't want to misquote Mr. Schultz, but you talk something about comprehensive health benefits. When I hear that, I think that people have universal health care that they can walk in and the doctor might have to take out their credit card. What's going on with health care? Ms. Carter or Mr. Saxon?

So with health care, I actually had health care with Starbucks. I had myself, my wife, and my daughter covered. The thing about the coverage is it's offered in tiers, so there's like the gold, silver, and bronze. These tiers, you still have to pay your copay. You still have to take out your card when you go to the doctor.

How much is the copay?

It depends on the level that you pick.

So would I be correct in assuming that if I'm working 10 hours a week, well, first of all, if I work 10 hours a week or 15 hours a week, I don't get that benefit. Is that correct?

Correct.

And if I'm working 20 hours a week, I'm not making enough money to pay the copayment or the premium, right?

Correct.

You want to elaborate on this? It doesn't sound like maybe it's quite the comprehensive benefit that it's not very comprehensive at all.

Again, so with every wage increase, they increase how much you have to pay into the health insurance. So that means more of your check is coming out for subpar health insurance that doesn't cover everything. So I have been reduced to going back to just the VA. Besides my firing, I've had to go back to the VA to get things that Starbucks' health insurance would not cover.

It would seem to me that if I was sitting where you were sitting and fighting for a union, one of my demands would be consistent and reasonable scheduling that I had some input to. Is that true?

Thank you, Senator Sanders. Yeah, that is absolutely one of our proposals, to have better, more consistent scheduling. And also, you know, just making sure that... well, I don't want to misspeak about the bargaining proposals, but I do know that having that consistent schedule is definitely something that we are fighting for in this movement. Because I mean, if our benefits are tied to it, we need to know that we can get those hours and not have to have this ridiculous availability like Jason said, that keeps you from actually pursuing a second job or pursuing some other form of income.

What does this availability mean? What does that mean?

So I believe it will... stores, I believe you have to have 180 percent of your hours available on top of the availability that you have if you want it. So say, for example, you want to work 12 hours a week, you have to have 18 hours available. If you want to work... I'm bad at math, so I'm just going to use that example. But yeah, that pretty much explains it.

Okay. Anything more that you would like to add?

No.

Okay. All right. On behalf of the committee, let me thank all of our panelists for your testimony. We appreciate it very much. And this is the end of our hearing. And for any senators who wish to ask additional questions, questions for the record will be due in 10 business days, April 12th, by 5 PM. I ask unanimous consent to enter into the record two statements from stakeholder groups in support of Starbucks workers in their fight to join a union freely and fairly. The committee stands adjourned.