To call Starbucks’ relationship with Starbucks Workers United union (Workers United) strained is an understatement. The relationship began in December 2021 when Workers United’s campaign in Buffalo, NY resulted in the first unionized Starbucks store. Since then, workers at over 400 Starbucks stores have voted to unionize nationally, many represented by Workers United. Hundreds of unfair labor practice charges have also been filed on both sides; Starbucks hasn’t fared well before the National Labor Relations Board (NLRB) regarding those charges. But despite the bad blood, when the adage is that there is a Starbucks on every corner, the Seattle coffee giant is often faced with decisions that affect business, including closing stores. It shouldn’t have to consult with its union about that decision. Those economic and operational decisions have resulted in a tumultuous relationship with Workers United, who since 2022 have had an open charge in Region 19 (Seattle Washington) of the NLRB claiming Starbuck’s closure of unionized stores violated the National Labor Relations Act (NLRA). NLRB Case No. 19-CA-301884 (Aug. 22, 2022).
Now, the NLRB has issued a complaint against Starbucks claiming it illegally closed 23 stores, less than half of which were unionized, in an effort to penalize the Union. Part of the complaint is a demand that Starbucks reopen the closed stores, or transfer the employees to new work locations.
To be clear, Starbucks has an absolute right to decide to close stores or cease operations. The issue Workers United has raised, and the NLRB seems to agree with, is Starbucks has failed to engage in effects bargaining (also knows as impact bargaining). In part, Workers United believes that unionized workers who are faced with a store closure should be transferred to another store; at least until effects bargaining has been completed. To me, that seems a bit at odds with the law, but the NLRB often does not always consistently apply the law. Comp. The Atlantic Opera, Inc., 372 NLRB No. 95, slip op., 8 (2023) with FedEx Home Delivery v. NLRB, 849 F.3d1123, 1128 (D.C. Cir. 2017). However, the rule to engage in effects bargaining is real.
Effects bargaining is the duty to engage in bargaining over issues that are fully within management’s discretion (i.e. certain economic decisions, standards of productivity, to determine the personnel, methods, means, and facilities by which operations are conducted, decisions to cease operations, among others), but the effect of the decision may change the terms and conditions of work for bargaining unit members. Changes to terms and conditions of work are mandatory bargaining subjects found under Section 9(a) of the NLRA. Therefore, before an employer chooses to go out of business, conduct layoffs, or close an underperforming coffee shop, the employer must first engage with their employees’ union to have a chat about how the decision will impact bargaining unit employees. Failing to engage in bargaining, or failing to bargain in good faith, can result in an unfair labor practice charge as both are violations of the NLRA, Sections 8(d) and 8(a)(5).