Here’s why Bernie Sanders is going after Starbucks CEO Howard Schultz

The showdown between Sen. Bernie Sanders (I-Vt.) and Starbucks chief Howard Schultz will come to a head next week.

That's when the Senate Health, Education, Labor and Pensions (HELP) Committee votes Wednesday on whether to subpoena his testimony and authorize an investigation into the company’s labor law violations.

The vote comes on the heels of a major legal decision by the National Labor Relations Board (NLRB) that Starbucks was affecting their workers’ organizing efforts through “egregious and widespread misconduct" that violated their legal rights.

“While Howard Schultz is a multi-billionaire who runs a very profitable multi-national corporation, he must understand that he and his company are not above the law,” Sanders, who chairs the HELP committee, said in a statement announcing the March 8 subpoena vote.

"Unfortunately, Mr. Schultz has given us no choice, but to subpoena him. A multi-billion dollar corporation like Starbucks cannot continue to break federal labor law with impunity. The time has come to hold Starbucks and Mr. Schultz accountable," Sanders wrote.

The Senate HELP Committee has 10 Democrats and nine Republicans. An aide for Virginia Sen. Tim Kaine – a Democrat on the committee – told The Hill they were “not sure” that the vote would fall along party lines.

Starbucks spokesman “This is a disappointing development, but we will continue our dialogue with Chairman Sanders’ staff and are optimistic that we’ll come to an appropriate resolution. Our response to the Chairman’s initial request still stands,"

In lieu of Schultz, the company said it would offer AJ Jones II, executive vice president and chief communications officer for Starbucks, to testify before the committee.

Jones was the policy director for Rep. James Clyburn (D-S.C.), the former House Democratic whip.

Why Sanders wants Schultz to testify

More than 280 Starbucks stores have voted to unionize since the December 2021 Buffalo vote, according to Starbucks Workers United. In that time, Starbucks has fired nearly 200 union organizers.

The NLRB has filed more than 75 complaints against Starbucks alleging unlawful intimidation and retaliation against union organizers.

But it’s not just the company’s labor practices that are of interest to Sanders.

It’s also the role in shaping them and enforcing them played by Schultz himself – a CEO who was once reported to be former Secretary of State Hillary Clinton's pick to serve as Labor Secretary if she had won the 2016 presidential election.

Sanders called attention to the personal nature of Schultz’s role in Starbucks labor policy in a Thursday letter to the company, referring to the NLRB decision that Starbucks had committed "hundreds" of labor violations.

The senator cited a November 2021 meeting in Buffalo led by Schultz, who had not yet returned as the company's CEO following a 2018 retirement, with all area Starbucks workers.

“These workers were forced to attend this meeting while every Buffalo-area store was closed to listen to Mr. Schultz one month prior to union elections that were held in the area. This meeting makes clear the enormous power and influence Mr. Schultz has over labor policy at Starbucks,” Sanders wrote.

Starbucks is under fire for labor violations

In perhaps the most significant ruling to date, NLRB administrative law judge Michael Rosas on Wednesday found that Starbucks engaged in numerous labor law violations during its union busting campaign in Buffalo, displaying “egregious and widespread misconduct demonstrating a general disregard for the employees’ fundamental rights.”

Rosas ordered Starbucks to rehire and give back pay to seven Buffalo-area workers who were fired amid organizing efforts. As part of the ruling, Starbucks would have to post a notice in its stores promising that the company won’t surveil or threaten workers aiming to form a union.

Rosas ordered also Schultz to personally read the notice to the Buffalo Starbucks workers.

Starbucks union organizers described the company’s counter-organizing efforts as a form of “psychological warfare.”

Starbucks' pressure on employees caused physical symptoms

“It was incredibly intense,” Jaz Brisack, an organizer who worked for Starbucks from 2020 to 2022 and now works for the Workers United union in New York, told The Hill in an interview.

“The anti-union campaign is designed as psychological warfare. It’s designed to make people feel like they’re unhinged or insane for trying to do this and trying to stand up," Brisack said.

“There’s a lot of anxiety in captive-audience meetings and one-on-ones in going into that kind of power dynamic with the boss,” she said.

Brisack mentioned a colleague who was “literally getting notifications on her Apple Watch that her heart rate was dangerously high and that she needed to not be in that kind of stressful situation, which is exactly what the campaign is designed to do.”

Tyler Hoffman, a former shift supervisor and organizer at Starbucks in Richmond, Va., told The Hill in an interview that managers had accused him of getting paid to organize.

“It got so bad, the distrust of me that I was receiving an extra paycheck, it got to the point where I had to show them bank statements to prove that I wasn’t being paid. I was like, 'I only have $30 in my account and I live in a 400-square-foot apartment with my partner.' If I was getting two paychecks, this just wouldn’t be the case,” he said.

Starbucks claims it’s a model employer

Starbucks argued in a February letter to Sanders that the company "has been and continues to be a model employer," citing its offering of health care, mental health care, tuition reimbursement, company equity and retirement accounts, among other benefits.

According to jobs website Indeed.com, coffee-preparers at Starbucks make $16.59 per hour in New York, where a statewide minimum wage of $15 per hour was enacted as part of the state’s 2016 budget.

Indeed puts the average hourly wage at $11.68 in Arkansas and at $10.94 in Mississippi.

The company also defended it's record on labor issues, saying it "has been extensively engaged in good faith bargaining at more than 200 locations where the results of a National Labor Relations Board (NLRB) election have been certified."

Starbucks has said unions are a threat to its business

The company has officially told the government that unions present a major threat to its business model.

“If a significant portion of our employees were to become unionized, our labor costs could increase and our business could be negatively affected by other requirements and expectations that could increase our costs, change our employee culture, decrease our flexibility and disrupt our business,” Starbucks wrote in its 2021 year-end filing with the Securities and Exchange Commission.

“Our business could be adversely impacted by increases in labor costs, including wages and benefits, which, in a retail business such as ours, are two of our most significant costs,” the company said.

Starbucks added, “our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results."

Democrats are boosting union power

President Joe Biden's administration has prioritized beefing up the NLRB to boost organizing efforts.

On his first day in office, Biden fired anti-labor Trump appointee Peter Robb from the top NLRB post, drawing outrage from business groups and praise from unions. 

The NLRB now has a pro-union majority board and is led by Jennifer Abruzzo, a former labor leader at the Communications Workers of America who is seeking to ban captive audience meetings and other union-busting tactics Starbucks has been accused of using.

If Schultz is made to appear, it could be another win for the U.S. labor movement, which has withered in recent decades but has seen a resurgence in the wake of the coronavirus pandemic as the cost of living has risen and the unemployment rate has fallen to a 54-year low.

The number of American workers on strike increased by 52 percent in 2022, with more than 120,000 workers going on strike and 26 major work stoppages in effect that year.

The Cornell University school of Industrial and Labor Relations tracks more detailed data on strikes and puts the number higher.

Democrats secured $25 million in new funding for the NLRB in the most recent omnibus spending bill, the board’s first funding bump in nearly a decade. The NLRB said that it needed more money to handle a 53 percent increase in union election petitions in 2022.