Starbucks Bucks Its Workers’ Labor Union

Even though more than 500 Starbucks shops had unionized by the end of 2024, it seems that the company’s management did not respect the new union very much. Unfortunately for the company, one implication that can be drawn is that the company’s management didn’t respect federal labor law very much too. For in not respecting its union enough to negotiate it on reducing employee work hours, the company violated federal law. The “smoking gun,” I submit, was that the management used dissimulation to respond to the government, rather than address the complaint directly.

On October 10, 2024, the “general council of the National Labor Relations Board filed a complaint . . . alleging that Starbucks made the scheduling changes in late 2022 and early 2023” without consulting and negotiating with the union.”[1] The complaint reads in part that Starbucks changed workers’ hours “without prior notice to the Union and without affording the Union an opportunity to bargain.”[2] As per federal labor law, Starbucks was required to give prior notice to the union and give it a chance to bargain, as well as to tell the union how the change in hours would impact the paychecks of the workers affected. In its written response, the company’s management ignored this requirement and instead defended a practice that was not against the law and the government was thus not in the government’s complaint.

Starbucks stated, “We continuously review operations decisions to optimally address business needs and customer expectations, consistent with the law.”[3] Indeed, doing so does not in itself violate federal law, but the statement does not address the complaint. Next, the company tried to obviate the complaint, again by not addressing anything that was illegal, by pointing out, “our decisions were made across our system, in unionized and non-unionized stores, and they were made without regard to organizing activity at Starbucks.”[4] Even if that were true, it does not address whether the management had informed the union and given it an opportunity to bargain in the cases of the unionized stores.

By not addressing the violations specified in the complaint, the company’s managers may either have been dissimulating by changing the terms of the dispute or trying to avoid lying by denying the specific charges. Either way, the mentality is sordid, and this in itself can be interpreted in line with the old adage, Where there is smoke, there is fire.  Where there is a devious mentality, there is likely to be a crime.

As a result of the violation, some employees lost the benefit of health insurance because they no longer worked enough hours per week. Therefore, the union’s lawyer said that damages could be more than merely the wages for the lost hours. A conservative estimate could be “north of $30 million.”[5] Lest this seem like enough of a disincentive for the management to begin to respect the union (and federal labor law), I submit that it is extremely difficult to change a company’s organizational culture.

Today, I went to buy a product at a Target store. The shelf was empty so I went to customer service, which the linguistically opportunistic management calls “guest” services. The employee was incorrect that I could not order the product online and have it delivered to the store; she was even wrong that the product was not in the back of the store. I went to a manager, who assured me that she would “coach” the employee.  In a tone of “you’re not getting it,” what I actually said was, “It was not just her mistakes; her mentality—her attitude—was terrible, and that can’t be coached away.” The manager didn’t say anything, but her facial expression was one of dismissiveness. Starbucks’ management at the corporate level needed more than coaching from the government.

1. Dave Jamieson, “Starbucks Could Owe Millions to Baristas Who Unionized,” The Huffington Post, October 11, 2024.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.

Wage Theft: More Companies Flouting Trust

If you are playing by the rules, not trying to cut corners at others’ expense, you need not let the bastards get you down. Of course, if your detractors catch you with your hand in the cookie jar, then blaming them only confirms that a sordid character flaw undergirds the stealing. As a business strategy, accusing union officials of having an agenda simply because they have identified cases of wage theft by the company is not exactly good public relations; in fact, the ploy sends a message that the managers at the helm are more interested in shifting the spotlight onto distractions than “manning up” to take responsibility for the unethical and illegal conduct at the employees’ expense.

The full essay is in Cases of Unethical Business, which is available at Amazon.

Labor and Stockholders: Applying Locke’s Notion of Property

John Locke’s view on how something becomes a person’s property could fundamentally alter labor-management negotiations in companies. Moreover, our assumption that management participates in the discussions may be upended. The key, I contend, lies in how we classify labor. I submit that the paradigm that has been handed down to us is deeply flawed in its fundamentals, and yet strangely we do not even question its contours.

In describing his notion of property, Locke begins with the state of nature, wherein “every Man has a Property in his own Person. This no Body has any Right to but himself.”[1] Unlike Thomas Hobbes, Locke did not think that rights depend on the existence of government. From a person’s body, Locke goes next to its labor, as properly one’s own. It follows, Locke contends, that “(w)hatsoever then [a person] removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property. It being by him removed from the common state Nature placed it in, it hath by this labour something annexed to it, that excludes the common right of other Men. For this Labour being the unquestionable Property of the Labourer, no Man but he can have a right to what that is once joyned to, at least where there is enough, and as good left in common for others.”[2] The caveat at the end means that as parcels from the commons are belaboured, the resulting private property should not exhaust the commons itself, which nature provides to all. Yet even when all land, for example, has been claimed by individuals and government, surely Locke’s claim still holds that in mixing with an object, the labor of one’s person, being his or her property already, extend the property to the object too.

Yet what if another person already owns the object? Locke assumes the laboring person snatches it out of the state of nature, where anyone can appropriate the object with one’s own labor. If the basis of Locke’s theory of property is not the state of nature itself, but, rather, that a person’s own person and labor are one’s property—whether in the state of nature or in an arranged society—then a right of property is still in the mixing of a person’s labor in an object. In cases in which the object is already owned by another and he or she consents to the labor of another being mixed with said object, then either the laborer has an ownership share or he or she contracts with the pre-existing owner to sell the share.

Hence, companies, whether owned by private interests (capitalism) or a government (socialism), contract with employees essentially to purchase their property rights that naturally accrue as their respective laboring mixes in with the means of production. I distance the labor from the means of production because the latter do not gain a property right in working on an object, for it makes no sense to say that a machine has its machine and work as property. The implications of this distinction are nothing short of huge with respect to the assumptions we make about business and capital.

In financial reporting, labor is classified as an expense to be deducted from revenues to arrive at profit. The returns to a company’s owners (e.g., stockholders) come off after the profit, rather than being an expense of doing business. If Locke is correct that labor also gives rise to a property right, then the sale of the stake is also extra-business, rather than a mere means of production. That is, the cost of labor should rightfully be classified with dividends after profit.

By implication, rather than negotiating the sale of the labored property as if it were an expense, the talks would be between owners. For one group of owners, that of capital, to say, “We can pay more, but we’ll have to cut expenses” would be a category mistake. So too, would the common (and convenient) assumption, “If we pay you more, we’d have to raise prices and we’d lose business.” Within the property classification, buying up the labor-property shares would come out of dividends, rather than to be made up for by intra-business revenue or expenses. This “third rail” is never brought up as even an alternative—the capital-owners’ dividends presumably being off the table. Such a narrowing of a debate goes a long way in getting what you want in negotiations. John Locke might just say, not so fast!

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1. John Locke, The Second Treatise of Government, section 27, in Locke, Two Treatises of Government (Cambridge University Press: Cambridge, 2003), p. 287.

2. Ibid., p. 288.