Starbucks Unionized Workers Threaten Strike Over Contract Disputes
Unionized employees at Starbucks' U.S. stores are preparing to stage a strike unless progress is made toward finalizing a labor contract with the company. The labor action is set to coincide with the coffee chain's annual Red Cup Day, an event known for high customer turnout due to the distribution of free, reusable red cups. The union, Starbucks Workers United, announced that the strike could impact stores in at least 25 cities, with more locations potentially joining if negotiations remain stalled.
Currently, approximately 550 out of 10,000 Starbucks company-operated stores in the United States have unionized. The unionization movement has grown since 2021, but the company recently closed 59 unionized locations as part of a broader restructuring initiative. Despite ongoing negotiations, Starbucks and the union have not reached a labor agreement. In late 2023, Starbucks committed to finalizing a contract by the end of 2024. However, leadership changes within the company have shifted the dynamics of these discussions, leading to what the union describes as a lack of substantial progress.
Starbucks' latest offer includes an average hourly compensation exceeding $30 in pay and benefits for hourly employees. The company expressed disappointment in the union's decision to strike rather than continue negotiations. Starbucks maintains that any agreement must reflect the current benefits and compensation it provides to its workforce, which it regards as highly competitive within the retail sector.
The union has proposed significant pay increases, requesting an immediate 65% raise with a further 77% increase over three years, along with additional compensation for working weekends or during company promotions. Other suggestions would alter operational procedures, such as allowing staff to halt mobile orders if certain thresholds are met. Starbucks management argues that these proposals are unrealistic and would require major operational changes. The company has also stated that the union's calculations combine multiple economic requests, resulting in figures that may not accurately represent the proposals' impact.
Union representatives counter this by pointing to issues such as insufficient weekly hours for many baristas to qualify for benefits and significant executive compensation packages. For instance, Starbucks' new chairman and CEO received a total package of $95.8 million in 2024, which included substantial equity grants following his move from a previous employer. Union members assert that their efforts aim to secure fairer working conditions and compensation, arguing that current pay structures do not meet their needs, with starting pay in most states reported at $15.25 per hour.
The planned industrial action follows similar events in recent years. In 2023, thousands of Starbucks employees participated in a walkout during Red Cup Day, affecting over 200 stores. Another strike near Christmas led to the temporary closure of dozens of locations. Despite these disruptions, Starbucks has assured customers and stakeholders that most company-owned outlets and the 7,000 licensed locations in venues such as airports will remain open in the event of a strike.
Starbucks' share price experienced a notable increase in recent trading sessions, reflecting ongoing investor interest amid labor negotiations. The outcome of these discussions and the potential strike could have significant implications for the company's operations and its relationship with employees moving forward.