It was a hearing for the history books: Billionaire Howard Schultz, the resolutely anti-union architect of Starbucks, faced Sen. Bernie Sanders, the outspoken champion of the union movement in Congress.
Schultz was once a prominent Democrat hailed as a progressive corporate pioneer of better pay and benefits for service industry workers. On Wednesday, under threat of subpoena, he appeared in the Senate to address allegations that Starbucks has been breaking labor laws as it fights its employees' nationwide unionization push.
"Over the past 18 months Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country," Sanders said. "The fundamental issue we are facing today is whether we have a system of justice that applies to all — or whether billionaires and large corporations can break the law with impunity."
Schultz, fresh off his third stint as Starbucks CEO, repeatedly denied any wrongdoing.
"Sir, Starbucks coffee company, unequivocally — and let me set the tone for this very early on — has not broken the law," he said. The statement was met by some laughter from the gallery.
He categorically denied being a union-buster and said he took offense at being characterized as one. That also elicited laughter from the audience.
"We want to treat everyone with respect and dignity," Schultz continued. "However, I have the right, and the company has the right, to have a preference. And our preference is to maintain the direct relationship we've had with our employees, who we call partners."
As the Senate hearing began, a long queue of managers and corporate employees crowded inside, wearing matching t-shirts — as did dozens of Starbucks Workers United members.
The Health, Education, Labor, and Pensions committee — chaired by Sanders, an independent from Vermont — streamed the proceeding online. After Schultz's testimony, lawmakers also heard from two Starbucks baristas, one current and one former.
Hundreds of unionized stores, and scores of complaints
Employees at nearly 300 coffee shops have now voted to join Starbucks Workers United, about 3% of the chain's company-owned locations in the U.S. Starbucks has shuttered some unionized stores and fired some workers involved in organizing, citing misconduct.
Federal labor officials have issued scores of complaints against the coffee giant. Administrative law judges have found Starbucks violated labor laws in at least eight of those cases so far, which the company is appealing. Some rulings have ordered Starbucks to reinstate fired workers and issue them back-pay. One said Starbucks engaged in "egregious and widespread misconduct demonstrating a general disregard for the employees."
During the hearing, Schultz pointedly noted that one of the workers Starbucks was ordered to reinstate had in fact violated company policy by reopening a store after hours "for activities that were not consistent with safety and procedures at Starbucks."
Even so, Democrats on the committee appeared unmoved.
"It is akin to someone who has been ticketed for speeding a hundred times saying 'I've never violated the law, because every single time — every single time — the cop got it wrong,' " Sen. Chris Murphy, D-Conn., told Schultz. "That would not be a believable contention."
Starbucks and the union have also failed to reach any collective-bargaining contract for any of the unionized stores, and negotiations are stalled. Both sides accuse each other of undermining the process.
On Wednesday, noting that the first group of Starbucks workers to win union elections have been waiting more than 460 days to negotiate a first contract, Sanders pressed Schultz to promise that Starbucks would exchange proposals with the union within 14 days of the hearing.
Schultz declined to make any such promise. He did say the company would continue to bargain in good faith in face-to-face sessions, but not in sessions streamed on Zoom as demanded by the union, citing safety and privacy concerns.
Three-time CEO pushed back on the 'moniker' of billionaire
Schultz touted Starbucks as a worker-focused and generous employer, with pay averaging $17.50 an hour — more than the minimum wage in every state — and benefits, including college tuition and company stock.
Such statements drew praise from Republicans on the committee, who lauded his entrepreneurship as an American success story.
And when it came to criticism from Democrats, Schultz appeared at times deeply offended.
When Sen. Tina Smith of Minnesota commented on the imbalance of power between hourly Starbucks workers and their billionaire CEO, Schultz pushed back against the term "billionaire," which he called a moniker.
"I grew up in federally subsidized housing. My parents never owned a home. I came from nothing," he said emphatically. "Yes I have billions of dollars. I earned it. No one gave it to me. And I've shared it constantly with people of Starbucks. And so anyone who keeps labeling this billionaire thing--"
Interrupted by Sanders telling him his time had run out, Schultz managed to add, "It's your moniker constantly. It's unfair."
Schultz last week stepped down from his third term as Starbucks CEO since the 1980s, staying on as a member of the board and a major shareholder. He had agreed to testify in the Senate only after the committee prepared to subpoena him. Sanders rejected Starbucks' offers of other representatives instead.
Schultz first led the coffee chain to huge expansion between 1986 and 2000, returning to the chief executive job from 2008 to 2017 and again last April. In 2019, Schultz grabbed headlines as he explored a presidential run against Donald Trump as an independent.
Last week at the Starbucks shareholder meeting, the new CEO Laxman Narasimhan did not signal any change in the company's stance on unions.
But at that same meeting, shareholders voted to approve a proposal for an independent assessment of how well Starbucks is adhering to its commitment to workers' rights. The company had encouraged shareholders to vote against it.
NPR's Mary Yang and Greta Pittenger contributed to this report.
ADRIAN FLORIDO, HOST:
It was a Senate hearing for the history books. Billionaire Howard Schultz, the resolutely anti-union architect of the Starbucks coffee chain, testified today. And the lawmaker with the gavel was Senator Bernie Sanders, longtime champion of the union movement.
(SOUNDBITE OF ARCHIVED RECORDING)
BERNIE SANDERS: Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country.
FLORIDO: NPR's Alina Selyukh is here to tell us what went down. Hey, Alina.
ALINA SELYUKH, BYLINE: Hello.
FLORIDO: So what was the reason for this hearing?
SELYUKH: Yeah, to catch up, nearly 300 Starbucks stores have voted to unionize. The coffee chain has fought this, and it faces scores of allegations of breaking labor laws. That's not only from workers but also from federal labor officials. Starbucks has been appealing everything in a legal process that can take years. So Sanders says to him, this hearing was a matter of holding corporations and billionaires accountable.
FLORIDO: OK, so this was a long time coming. What was the hearing like?
SELYUKH: Yeah, it was pretty tense. Well, first off, Howard Schultz only came to testify under the threat of a subpoena. And he spent much of the hearing repeating the same thing over and over, that Starbucks did not violate labor laws, like he does here...
(SOUNDBITE OF ARCHIVED RECORDING)
HOWARD SCHULTZ: I support the law, and I also take offense with you categorizing me or Starbucks as a union buster when that is not true.
UNIDENTIFIED PERSON #1: Well...
SELYUKH: At the end there, you can hear some people in the audience actually laughed when he said this. That's because there were lots of union organizers from Starbucks in the audience. And then on the other side of the room, the company brought in its own supporters in matching T-shirts. My colleague Mary Yang was in the room, and she described it like being at a wedding where two families just really don't get along.
FLORIDO: Well, given that Starbucks continues to deny wrongdoing, what is Senator Sanders pushing for?
SELYUKH: I actually asked him this very question yesterday, and Sanders said he'd hoped Schultz would pledge to sit down and negotiate collective bargaining contracts for the hundreds of unionized stores. The process has stalled over - for over a year. The company and the union both blame each other, and it wasn't clear to me that Schultz's attitude on this has shifted. And he kept saying that the National Labor Relations Board was simply wrong claiming that Starbucks broke labor laws, which prompted this memorable response from Senator Chris Murphy.
(SOUNDBITE OF ARCHIVED RECORDING)
CHRIS MURPHY: It is akin to someone who has been ticketed for speeding...
UNIDENTIFIED PERSON #2: Yeah.
MURPHY: ...A hundred times...
UNIDENTIFIED PERSON #2: Yeah.
MURPHY: ...Saying I've never violated the law because every single time, every single time, the cop got it wrong.
SELYUKH: Which he said would be hard to believe.
FLORIDO: Well, definitely sounds like it was quite a show. What do you think this all could mean for Starbucks?
SELYUKH: It's hard to say, but it definitely felt like one of those moments that leaves a mark on a company's history. So Schultz stepped down last week as CEO. He's been CEO three times since the 1980s. He really built this company. He sits on the board. He's never been particularly secretive about not wanting a union at Starbucks. But for a long time, he was hailed as a progressive corporate pioneer of better pay and benefits for service industry workers. And so now, it's clear he takes a lot of the accusations against Starbucks pretty personally. At one point, he even said it was unfair that he kept being described as a billionaire, talking about how he shared his wealth, how Starbucks offers generous benefits, its average pay, $17.50 an hour. One Democrat observed that it was almost like Howard Schultz took it as an offense to face a union campaign to begin with as an insult to how he's run his company.
FLORIDO: I've been speaking with NPR's Alina Selyukh. Thanks, Alina.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.