The Homa Files

Excerpted from Business Week, “Starbucks’ Union Blues”, December 31, 2008

Starbucks’ legal wrangles with a union that wants to organize its baristas is tarnishing the coffee chain’s reputation for social responsibility

Starbucks, once the undisputed leader in premium-price caffeine fixes, has long cultivated a corporate image for social responsibility, environmental awareness, and sensitivity to workers’ rights. Now that carefully crafted reputation is under assault, thanks to a messy legal dispute with a group called the Starbucks Workers Union (SWU).

The NLRB found that Starbucks had illegally fired three New York City baristas as it tried to squelch the union organizing effort …. the company broke the law by giving negative job evaluations to other union supporters and prohibiting employees from discussing union issues at work.

The judge ordered that the three baristas be reinstated and receive back wages. The judge also called on Starbucks to end discriminatory treatment of other pro-union workers.

The timing isn’t ideal for Starbucks, which faces lower demand from the recession, an overall loss of panache for the brand, and a sliding stock price.

The company’s shares more than halved in value in 2008, while Dunkin Donuts and McDonald’s continued to grab market share among coffee drinkers.

Starbucks has been the target of numerous National Labor Relations Board complaints over unlawful violations of workers’ rights.

The SWU is especially keen on tarnishing Starbucks’ image as a “socially responsible” company. Union reps say that Starbucks has a systematic problem with low wages, irregular working hours, and a lack of reliable health care. Starbucks maintains that it pays competitive wages and is among the first large employers to offer health insurance to part-time employees, who make up 100% of its workforce.

Starbuck’s carefully cultivated reputation for social responsibility, may be vulnerable. “The image of the brand that it is wonderful being green, promoting free trade, and helping people, and not being an oppressor of labor.”

Full article:
http://www.businessweek.com/magazine/content/09_02/b4115026911242.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

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