Starbucks and Union Agree to Work Out Framework for Contract Talks

Starbucks and the union representing employees in about 400 of its U.S. stores have started discussions on a “foundational framework” to help the company reach labor agreements with unionized workers and settle litigation.

The union sees this as a significant shift in Starbucks’ strategy, as the company has previously resisted union organizing efforts since the campaign began in 2021, leading to violations of labor law according to federal regulators.

Starbucks, denying the accusations, aims to have contracts negotiated and ratified by the end of the year and is willing to agree to a “fair process for organizing,” a demand the union has had for years. As a gesture of goodwill, Starbucks is providing benefits introduced in 2022 to unionized workers, such as the option for customers to tip via credit card.

Both Starbucks and the union, Workers United, hope to return to the bargaining table in the coming weeks, although details still need to be ironed out as negotiations had stalled in recent months.

Workers involved in the organizing effort expressed surprise at the development, with one saying, “It still feels pretty surreal right now.” If a framework is agreed upon and promptly leads to contracts, it could be a significant development in labor relations in corporate America.

While experts see this as a positive step, they also urge caution until more details are available, given Starbucks’ history of aggressive anti-union campaigns. The shift in strategy seems to have been driven by the company’s CEO, Laxman Narasimhan, who took over almost a year ago.

Former CEO Howard Schultz, who previously expressed resistance to the union, is no longer on the board of directors. Sources say Narasimhan is more open to working with the union, as evidenced by the company’s efforts to restart contract bargaining and improve employee relations.

The breakthrough in negotiations came during mediation last week to settle lawsuits between the union and the company, with workers at over 20 stores filing petitions to unionize, reflecting the ongoing campaign’s momentum.

Unaddressed in the discussions is a dissident campaign for three seats on the Starbucks board supported by a coalition of unions, including Workers United’s parent company. Shareholders can vote on the candidates until the annual meeting in mid-March, but the framework announcement may reduce the rationale for change in the eyes of many investors.