Starbucks workers in Buffalo, New York supported efforts to unionize.
It is the first successful attempt at unionizing the coffee giant's U.S. company-owned locations since it went public nearly three decades ago. The National Labor Relations Board is still counting votes.
Workers at the location voted 19 to eight in favor of the union. The company's shares fell less than 1% on the news.
The National Labor Relations Board twice sided with workers seeking to organize, first allowing the stores to vote as single units instead of opening up the vote to all the stores in the region, a move that typically favors the employer. More than 80 workers were eligible to vote in the city.
The vote count was allowed to move ahead for Thursday afternoon. The count was streamed via zoom after the deadline of Wednesday evening. The union fight attracted attention from lawmakers.
In the restaurant industry, unions are rare. The Bureau of Labor Statistics says that the private sector unionization rate was 6.3% in 2020. Increased efforts to organize have been encouraged by a tight labor market. This year has seen strikes by John Deere's and Amazon workers. The labor unions have not always been successful in their efforts.
Starbucks management has strong opposition to the union effort. Starbucks sent top executives and former CEO Howard Shultz to the Buffalo locations, a move that Starbucks Workers United called "union busting." In November, workers filed a federal labor charge, accusing Starbucks of illegal activity like engaging in a campaign of threats, intimidation and surveillance in response to the union push The company denied the allegations.
If anyone thought that was intimidation, I apologize. Rossann Williams, Starbucks' North American president, said that she can't speak on every situation because she has been doing it for 17 years. Our partners asked us for help and we showed up, and they were absolutely right. They let them down, and we apologized for that.
The coffee chain has a reputation for calling its employees partners and has some of the most progressive benefits in the fast food and restaurant space. Pro-union workers said that the Pandemic caused staffing shortages and pressured employees, and that wages and working conditions were two of the sticking points.
Starbucks told investors last quarter that earnings would be lower in fiscal 2022. The impact of the Covid-19 pandemic as well as rising costs were blamed by the company.
Starbucks announced in October that it would be raising pay for workers based on their market and tenure. The pay floor will be raised to fifteen dollars an hour by the summer of 2022, with an average hourly wage of seventeen dollars. Over the last three months, Starbucks stock is down 2.5% but up less than six percent over the last month.
Three more Starbucks stores in Buffalo are seeking to vote on unionizing, as well as a location in Mesa, Arizona, which voted to unionize. Kevin Johnson, the CEO of Starbucks, told Jim Cramer that more stores are likely to organize, but for the rest of the US, it will be business as usual.
I think there may be a few other stores, but I think there is strong support for the heritage and history of Starbucks in the fact that we are a partner-focused company. Johnson said on CNBC's " Mad Money with Jim Cramer" Tuesday that he believes the green apron partners will stand up if they are given a voice.
This is a breaking news story. You can check back for updates.
