Starbucks’ Path to Settling With Union Laden With Legal Hurdles

Starbucks Corp. and the Workers United union are set to begin long-awaited negotiations next week, kicking off a process that must contend with federal labor board complexities before the hundreds of pending charges against the coffee giant could be put to rest.

Resolving open cases isn’t as simple as Starbucks and the union agreeing to the terms of a deal.

Instead, a chief obstacle is the need for them to get settlement approval from different authorities within the National Labor Relations Board depending on where each individual case is in the life cycle of an unfair labor practice dispute, legal observers said.

And with NLRB regional offices having issued roughly 130 complaints covering about 430 ULP charges since 2021, that could be a tall order.

“It would be a very complicated process to unscramble all the eggs, given that the cases are in very different procedural postures,” said Michelle Devitt, a former NLRB lawyer who represents unions and workers for Willig, Williams & Davidson.

After several years of unflinching, aggressive opposition to its workers unionizing, Starbucks signaled a major shift in its labor strategy in late February when the company joined the union in announcing plans to hash out a “foundational framework” designed to secure collective bargaining agreements and resolve litigation.

Starbucks Workers United has organized more than 400 stores since 2021, but the union hasn’t reached any labor deals with the company.

The many Starbucks ULP cases are at different phases in the NLRB process, which starts with a charge filed at the board, proceeds to a complaint if the charge has merit, and is then litigated before an administrative law judge, the board, and potentially a federal appeals court.

Jurisdiction, and who can approve a settlement, shifts as cases advance through that process.

Roughly 65 unfair labor practice complaints are pending before ALJs, and 54 judge rulings—including 53 that found labor law violations—have been transferred to the board. One additional ALJ case was transferred to the board without a decision.

A handful of board rulings are also on appeal before federal courts.

The NLRB has also sought several temporary injunctions against Starbucks in federal court that seek to preserve or restore the status quo while the administrative case proceeds.

And in the first case to reach the US Supreme Court, the justices are scheduled next week to hear the company’s challenge to a court order related to worker terminations at a Memphis store.

“It’s all over the place,” Jeffrey Hirsch, a former NLRB attorney who teaches labor law at the University of North Carolina, said of the Starbucks litigation.

From Conflict to Comity

The talks set to begin next week are intended to focus on establishing a process for later reaching deals on collective bargaining agreements, a fair process for organizing, and resolving litigation, according company and union announcements.

“We are dedicated to fostering a positive working relationship for Starbucks partners and are eager to develop a constructive partnership with the union,” Starbucks told Bloomberg Law in a statement—which refers to its employees as “partners.”

The union’s delegates might make proposals that affect all unionized workers, but each store’s union contract will be negotiated separately, the company said.

Starbucks Workers United declined to comment on potentially settling outstanding litigation.

The company and the union have already started working to resolve at least one major ongoing case at the NLRB.

Hearings were slated to continue this week in a nationwide failure-to-bargain case against Starbucks, but an administrative law judge canceled them in late March, citing “ongoing settlement discussions by the parties.”

That’s not the only evidence that the nationwide conflict that defined labor-management relations at the coffee giant is significantly decreasing.

A brewing shareholder battle at Starbucks that was driven by organized labor ended shortly after the company agreed to meet with the union.

And on the Starbucks side, the company released its planned timeline last month for granting pay increases and other benefits to workers at unionized stores who were excluded when those perks were first rolled out in 2022.

Different Interests

Compared to the sprawling administrative litigation at the NLRB, Starbucks and Workers United have a much simpler path to settle their dueling federal lawsuits stemming from the union expressing support for Palestinians, which are just between the company and the union.

In contrast, the unfair labor practice cases are technically between Starbucks and the NLRB’s legal arm, even though many of them began with a union charge filed with the agency.

The NLRB regional offices—acting as extensions of the general counsel’s office—are prosecuting complaints that are based on the union’s charges, which administrative law judges and the board adjudicate.

That difference in who’s primarily litigating cases is important in the context of resolving them through settlements.

Although NLRB lawyers are litigating against Starbucks based on Workers United’s allegations, the agency and the union don’t necessarily share the same interests in those cases, lawyers and law professors said.

Unlike the union, the NLRB has a broader mission: protecting public rights and accomplishing the policy goals of the National Labor Relations Act, which involve eliminating barriers to commerce by encouraging collective bargaining and safeguarding workplace democracy.

That might mean agency officials take a harder line on what Starbucks must offer to settle alleged violations of federal labor law.

Figuring out remedies for all the unlawfully fired workers is one challenge to resolving open cases, said Ellen Dichner, a lecturer at CUNY School of Labor and Urban Studies and former chief counsel at the NLRB.

“A global settlement would require Starbucks to make every discriminatee whole, which means reinstatement, back pay and compensation for foreseeable pecuniary harm,” she said. “If the company disputes the NLRB’s calculations, that could really drag the process out.”

Still, the agency—which has devoted a significant amount of its limited resources to Starbucks litigation—would probably welcome a broad, company-union agreement to resolve outstanding cases as long as it furthers the goals of the NLRA, said Thomas Lenz, a former NLRB attorney who represents employers for Atkinson, Andelson, Loya, Ruud & Romo.

“It would be a marquee moment for the agency if a settlement is reached,” Lenz said.

General Counsel’s Role

Settlements of unfair labor practice cases can be informal, especially in the early stages when the general counsel’s office manages the case.

As the case moves forward, any deals may need approval by an administrative law judge or the NLRB. The board can get involved by reviewing a challenge to an ALJ’s approval of a deal, or by considering whether to sign off on a formal agreement that can then be enforced in federal court.

For cases on judicial review, a federal appeals court might have to send a dispute back to the agency for final resolution.

The NLRB has some experience settling large disputes, though nothing like the legion of Starbucks cases spread across the NLRB litigation life cycle.

In 1993, for example, then-NLRB General Counsel Jerry Hunter helped negotiate a deal to resolve a massive consolidated nationwide complaint against Greyhound Lines Inc. that was based on charges filed by the Amalgamated Transit Union.

With Starbucks, current NLRB General Counsel Jennifer Abruzzo could take a lead role in reaching a global settlement of outstanding unfair labor practice cases, said Hunter, now a management-side lawyer at Bryan Cave Leighton Paisner LLP.

She could directly approve the resolution of cases in the early stages of litigation and ask the board to have others remanded back to her control, he said.

But NLRB members might be unwilling to allow the informal settlement of Starbucks cases in which administrative law judges have found labor law violations, said Rebecca Leaf, a former NLRB attorney who represents employers for Miles & Stockbridge PC.

“They would probably require a formal settlement,” Leaf said.