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Starbucks Under Union Attack; Are You Next?

September 14, 2021

On August 30th, employees at three Buffalo area Starbucks restaurants petitioned the National Labor Relations Board (the “NLRB”) for a “Quickie” union election within the next two weeks.  This action comes on the heels of Collectivo Coffee of Milwaukee becoming the largest quick serve coffee restaurant to ever unionize.  Since the initial three petitions were filed, an additional two Starbucks have expressed interest in unionizing, bringing the total to five as of this writing.  Make no mistake, this is not just an upstate New York Starbucks issue.  It will have far-reaching implications for quick serve restaurants (“QSR”) and other retailers across the country.

A lot of questions remain unanswered.  Will there be five separate elections, or just one for all five locations?  What does the union want; what does Starbucks want; what will the NLRB decide?  Will the NLRB agree to a “Quickie” election?  Normally, it takes six weeks to hold an election.  Lots of crucial questions without any definitive answers.  

Why QSR and Retailers Should Care?

The union efforts taking place at the five Buffalo-area Starbucks have huge implications for Starbucks, and in turn, QSR and retailers.  Starbucks is the world’s second largest franchise.  If a giant like Starbucks could fall to unionization efforts, you could be next.   If the Starbucks workers vote in favor of unionization, they will succeed where others have failed – making these restaurants essentially the first Starbucks to be unionized in the United States. 

Brody and Associates has been sounding the alarm since well before President Biden’s election heralding Biden’s Administration would bring with it a wave of unionization which has not been seen in this country in decades.  Biden was repeatedly quoted as saying he will be the most pro-union President in history.  The President has shown as much by terminating the NLRB’s General Counsel on day one of his presidency, making swift and sweeping changes to the NLRB Board, and putting at the head of the Department of Labor, Marty Walsh, a life-long labor leader.

All of this pro-union activity comes at a time when the push for $15/hour minimum wage has never been fiercer, and workers have never had more bargaining power.  The COVID-19 pandemic and the Great Resignation- the current mass turnover of workers as they reevaluate their priorities in a COVID-19 world – have created a labor shortage and in turn has given all workers more power than they have seen in decades.  We believe the Buffalo Starbucks unionization efforts could be the flashpoint for future efforts across the QSR and retail sectors. 

Time is still on Your Side – For Now

Simply put, if you are a QSR or retail owner facing a “Quickie” election and are not already prepared, you are in serious trouble.  Owners and their management teams need to prepare now, so when the union shows up at their doorsteps, they are ready.  The strategy of waiting for an election petition to be filed before taking necessary steps to defend it, is no strategy at all!

Preparation means training your management team on how to respond to union activity and how to see the signs.  It also means reviewing your policies and signage for governmental scrutiny.  Finally, and most importantly, it means talking to your employees about unions and why they are better off without one!   These are your rights, and you should take advantage of them while you still can (see our article on the ProAct).  Be sure to consult competent legal counsel so you do this right. 

Is there More to Do than Prepare my Employees and Managers? 

Preparing your people for the union attack is the number one priority, but there are other issues.  If you are a QSR or retailer with multiple stores, you need not only worry about one store unionizing, but potentially your entire non-management workforce.   Now is the time to do an analysis to determine where you are at greatest risk for unionization and what you want to do about it.

After receiving a petition to unionize from one or multiple of your restaurants, the first step the NLRB will take is to determine what the “appropriate bargaining unit” is for your store(s).  That is to say, should the workers at each store vote to unionize only their store or as part of some larger group to unionize multiple stores.  To determine this, the NLRB will look at the totality of the circumstances surrounding the operations of your business to decipher the community of interest that they share.  The NLRB will look at a variety of factors, including, whether your stores share employees, equipment, supplies, a common-ownership structure, and common management to determine how closely the employees interest/experience are aligned with those in your other stores.  The more closely aligned, the more likely the NLRB will be to determine the bargaining unit should include multiple stores.  This is exactly the issue being litigated in the Buffalo Starbucks case.  The standard is more involved than we are able to summarize here, but this is the gist of the idea.

Another issue is who within your store could be unionized?  Usually, the entire non-management team will be the target, but who is that?  “Supervisors” are usually excluded, but what about others?  Will your Department Managers and/or Assistant Managers be included – are they supervisors?  How you define the job duties for these positions will answer these questions.  Before a union arrives, you can impact this calculus; after they arrive, the die is cast. 

Multiple Store Bargaining Units are Not Always Bad

While the NLRB’s presumption is each store should be treated as its own separate bargaining unit, after completing its analysis, the NLRB may determine the unit should be more than one store.  It is important to note it is not a choice for employees to decide the size of their unit.  The simple fact that a group of employees at multiple stores want to form a union together is not enough, the analysis must establish the appropriate membership to be included in a bargaining unit. Likewise, owners cannot dictate who should be included in a bargaining unit.  At the end of the day, it will be solely up to the NLRB to decide based upon the facts, at least the facts as the NLRB sees them.  However, if the NLRB determines multiple stores should be combined to form the bargaining unit, this could be a benefit to you, as traditionally it is much harder for the union to win larger elections.

So, if larger elections are harder for the union to win, should you proactively increase the interchange between your stores to increase the odds the NLRB will find a greater community of interest between your locations?  A risky move indeed, but one which could have a great payoff!  Think.  Could you create a group of stores with a community of interest to satisfy the NLRB standards, which also combines employees with pro-union and anti-union interests in such a way to thwart the outcome of a potential union election?  If so, that would be a huge win for you and your organization.  However, if you underestimate the pro-union sentiment at these locations you could risk losing big.  (Also, remember there are considerations beyond unions.  From a corporate liability standpoint, is a bigger unit advantageous?  What about from a compliance standpoint; many laws apply to bigger business.  By expanding your unit, are you going to increase your compliance issues?  Be sure you consider all this with competent legal counsel.) 

An alternative strategy which is much more conservative is one where an owner would silo the operations of her stores to ensure as small a bargaining unit as possible.  In this scenario, the owner would risk losing one store with high pro-union sentiment but protect her other stores from being enveloped into a larger unionized pool.

Closing Thoughts

The analysis discussed above is very complex and we have only scratched the surface here; but hopefully, this will cause you to consider your options.  Before the union shows up at your door you need to decide how best to defend yourself.  We have previously written on TIPS and FOE as strategies to legally help prepare for and avoid union activity.  All of those strategies are critical to help win and/or avoid an election vote.  Today, we have gone a bit further to have you start thinking about ways to structure the operations within your organization to create the most advantageous bargaining units should a petition be filed.

Have you thought about the appropriate bargaining units at your locations?  Have you determined who are your legal supervisors and therefore excluded from unionization?  Have you performed a legal analysis to try to determine how the NLRB would roll up your business into discrete bargaining units as it is currently constructed?  If so, are you happy with that possible outcome?  If not, have you considered how best to restructure your operations to achieve a more favorable outcome?

All QSR and retail owners need to be preparing for potential unionization at their stores- now.  For, like dominos and Starbucks, once one goes, others will follow.

If you need a refresher on how to implement TIPS/FOE in your workplace or want to talk about any of the strategies outlined here, we are ready to discuss.