Starbucks spars over union

The scene: An off-duty Starbucks barista lounges at the East Ninth Street store in Manhattan, wearing a union button. A customer, who happens to be a manager at another Starbucks store, enters to buy a drink, sees the button and asks about it. The dialogue grows hot. Starbucks employees don't need a union because they get health benefits, a 401(k) plan and stock options, the manager says. Things then start "to happen really fast and get really loud," the barista recounts at a trial. "He was in my face, and basically we started having an argument. He got into my face and raised his hands up." The barista tells the manager, "You can go f*** yourself, if you want to f*** me up, go ahead, I'm here." This drama is part of an 88-page ruling that illustrates the ongoing tension between Starbucks Corp. and the Starbucks Workers Union. In December, a National Labor Relations Board judge ruled that Seattle-based Starbucks Corp. violated federal labor law by trying to stop union organizing at four Manhattan cafes. Starbucks is appealing the decision. That trial, which took place between July and October 2007, produced a decision that reads at times like a reality-TV script, revealing Starbucks baristas and managers yelling at each other, mishandling blenders and cursing. Union sparring at Starbucks cafes? It wasn't supposed to be that way. Both sides In the 1980s, Starbucks unionized before Howard Schultz took over as chief executive officer in 1987. He gave baristas health care plus a share of the profit. When the AIDS epidemic was at its height, Starbucks paid for terminal illness care for employees for 29 months until the government took over. By 1992, the company was union-free. "I was convinced that under my leadership, employees would come to realize that I would listen to their concerns," Schultz wrote of that time in his book "Pour Your Heart Into It." "If they had faith in me and my motives, they wouldn't need a union." To this day, the company prides itself on its treatment of workers -- baristas receive the same health benefits as headquarters employees with business degrees. So how is it that a perceived latte-sipping lefty company finds itself in legal disputes with union employees around the country? In recent months, Starbucks has tussled with the Starbucks Workers Union in cases in three states: New York, Michigan and Minnesota. The company has settled three unfair labor practice complaints. The union says that the Starbucks reality has never been as shiny as its image. "It's always been a difficult place for baristas to make ends meet at Starbucks with the insecure work hours and low wages," said Daniel Gross, a founder of the union organizing efforts who was fired in 2006. (A judge found his termination was unfair.) "The American people were deceived by Starbucks and Howard Schultz." Starbucks counters that it treats employees well, that a union wouldn't necessarily do things better and that union participants make up a tiny portion of a 170,000-"partner" company. "Starbucks is a pro-partner organization," said Jim McDermet, senior vice president for Starbucks' Northeast Atlantic Division. "We really view ourselves as listening to our people and creating an environment where our partners can communicate directly to us." Progressive activist Kim Fellner, author of the 2008 book "Wrestling with Starbucks," said "the truth is somewhere in between." In her book, she noted that Starbucks treats workers better than many other restaurant companies do and spends substantially on environmental sustainability. She gave the corporation a stamp of "above average." Hard economic times will make Starbucks more susceptible to union organizing, said Joseph Michelli, author of "The Starbucks Experience." "They've really been an amazing company in the way they treated employees," said Michelli, who studied the company for two years. Nontraditional union The Starbucks Workers Union is part of the Wobblies, the nickname for the Industrial Workers of the World union. The IWW doesn't operate like traditional unions, which focus on contract negotiations and formal bargaining. Instead, it focuses on what it calls "direct action" to win gains for workers. The IWW says it is anti-capitalist and pro-worker. According to its constitution, "The working class and the employing class have nothing in common. ... Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the means of production, abolish the wage system, and live in harmony with the Earth." Since Starbucks employees began organizing with the group in 2004, that struggle has played out on company turf. In April 2006, the IWW started a "nutritional initiative" and hired scientists to assess the dietary value of menu items. In June 2006, the union issued a news release on nutrition that generated worldwide publicity. "The model we're using is quite different than the mainstream model; it's a model called solidarity unionism," Gross explained. When union member Anna Hurst, a single mother from the Bronx, suffered heat stroke on the job in August 2008, her store manager took her off the schedule for two weeks. "Anna brought this to the union, and we discussed it as co-workers and began to carry out our action plan," Gross said. A dozen baristas and supporters marched in during peak hours to hand a written demand to the manager that Hurst be compensated for the two weeks she was not permitted to work. The union also leafleted customers and picketed on New Year's Eve. At the 2007 trial in New York, Starbucks testified that union demonstrations have intimidated customers and employees. The IWW supporters "at times engaged in conduct such as spitting at managers, name calling, various acts of vandalism and blocking access to the stores. In addition, the leaflets distributed by the IWW frequently contained the phone numbers of managerial personnel," court documents say. The union denies allegations of spitting and vandalism. The documents don't paint Starbucks as innocent -- the company developed a national response to the union, collected information on what unionized workers did in their spare time and kept a list of which employees were union sympathizers. The company transferred employees it labeled as "pro-Starbucks" (least likely to join the union) to keep stores from being too heavily weighted toward the union, court documents say. The IWW has "learned what Howard Schultz dreads, which is when you use Starbucks' name, you get a kind of instant publicity effect," Fellner said. "I personally think that we progressives would be better served by targeting those corporations that have a much more negative impact on our communities and the global economy. You know, Wal-Mart does spring to mind," she said. But Fellner also said Schultz's pro-partner mantra comes across as benevolently paternalistic. "It's a problem because it means that whoever runs the company believes they know what's better for their workers than their workers," she said. Starbucks says it surveys workers to gather their views. Anti-union? A 1999 attempt to unionize Starbucks roasting-plant workers in Kent led to a two-year struggle for a contract. "They were doing union busting," said John Thompson, current president of International Union of Operating Engineers local 286. "All of the HR department that was hiring, their questions were, 'Have you ever belonged to a union, has any of your family members belonged to a union, or has any of your friends belonged to a union?' If you said yes to you or your family, at any time, you were never even considered for employment." That bargaining unit dissolved. Thompson said Starbucks was the "worst employer we ever had. They basically did anything and everything in their power to keep the unions out. "We haven't gone back after them." In fact, no union besides the IWW has tried to organize Starbucks in the U.S. in recent years, the company says. The IWW Starbucks union says it has some 300 members. Gross, 29, began working for Starbucks in 2003 and had been involved with the IWW before. He said that he did not choose to work at Starbucks just so he could organize it. Variable work hours are one of the union's major points of contention, Gross said. An employee must work 20 or more hours per week to be eligible for health coverage at Starbucks. Seventy-one percent of Starbucks employees are eligible, and 65 percent of those in the U.S. take advantage, the company said Thursday. Starbucks uses an automated scheduling system, where employees indicate which hours they are available. Someone who wants full-time work of more than 32 hours weekly must be open to work at least 70 percent of a store's operating hours. "Starbucks can schedule you on any day, at any time within those hours," Gross said. "How are you supposed to get a second job or plan for child care if you have to be available 80.5 hours?" Union in a big way Employees tend to care most about respect and dignity -- and they tend to unionize when they're not getting it, said Mark Theodore, a Los Angeles-based labor law partner at Proskauer Rose LLP. "It's rarely about the money," Theodore said. "It's usually about giving a person a voice in the workplace. Most people decide for themselves whether they are treated the right way or not." Unions, which have diminished in relevance for years, are about to become a lot more relevant, experts say. President Barack Obama won major endorsement from the nation's labor unions, and he appointed union-sympathetic Hilda Solis as labor secretary. She supports an Employee Free Choice Act, which would eliminate private ballot voting and make union organizing easier. "We're about to go union in a huge way in this country," said Clarence Belnavis, managing partner at the Northwest office of the national labor and employment law firm Fisher & Phillips LLP. And Starbucks, with centralized management rather than franchisees, is an easy target, he said. "Name me one state where there's not a Starbucks. Wouldn't you want to be the union handling those issues?" Belnavis said. "Wouldn't you want to be the entity in there? They're everywhere."