Under pressure, Starbucks CEO agrees to testify before US Senate panel

By Kanishka Singh, David Shepardson and Hilary Russ

WASHINGTON (Reuters) -Starbucks Corp interim Chief Executive Officer Howard Schultz has agreed to testify this month before a U.S. Senate committee after earlier resisting requests to appear and answer questions about the company’s compliance with labor law.

Schultz will testify on March 29 before the Senate Health, Education, Labor and Pensions Committee, the company and panel chairman Senator Bernie Sanders said on Tuesday. Schultz, who is stepping down from his post this month, had earlier declined an invitation from 11 senators to testify before the panel on March 9.

Committee Democrats had scheduled a vote for Wednesday – canceled after Schultz agreed to testify – on issuing a subpoena to compel Schultz’s appearance. The company previously offered other executives to speak instead.

Over the years, Schultz helped Starbucks build a reputation as a progressive employer, offering higher salaries and more benefits – including company stock and health insurance – than other restaurant chains.

But the company’s response to a growing union campaign, as well some of Schultz’s public comments, have been described by some critics, including some shareholders, as overly aggressive.

Democratic lawmakers have accused Starbucks of illegally firing pro-union employees and shuttering freshly unionized stores, which the company denies.

“Despite the fact that over 280 Starbucks coffee shops have successfully voted to form a union over the past year, Starbucks has refused to negotiate in good faith to sign a single first contract with their employees,” Sanders said in a statement.

At its March 23 annual shareholder meeting, Starbucks investors will vote on a proposal for an external audit of the chain’s labor policies. Two top proxy advisers have recommended ‘yes’ votes on the proposal, and Starbucks has since said it is conducting its own review.

Union policies

As head of the company, Schultz was not involved in making decisions about labor law, instead delegating them to other executives, Starbucks’ Executive Vice President and Chief Communications Officer AJ Jones II said in an interview.

The company had made 17 requests in the past to meet with Sanders’ staff to discuss unions, before finally being granted a meeting on Feb. 17, he said.

Jones said he and other Starbucks representatives met again with Sanders’ staff on Monday.

Schultz plans to testify about how Starbucks has led the industry in offering higher wages and better benefits, and will discuss “who we are as a company… and what we stand for,” he said.

In a statement, Starbucks Workers United, the Service Employees International Affiliate organizing most of the newly unionized Starbucks cafes, said it looked forward to hearing from Schultz.

“As the architect of Starbucks’ unprecedented anti-union campaign, it is high time for him to be held accountable for his actions,” the union said.

Employees at more than 280 of Starbucks’ roughly 9,000 company-operated U.S. locations have voted to join a labor union since 2021. The union is seeking better pay and benefits, improved health and safety conditions and protections against unfair dismissal and discipline.

Sanders said that the U.S. National Labor Relations Board has issued more than 80 complaints against Starbucks for violating federal labor law. Sanders also noted that an administrative law judge in New York has ruled that the company engaged in “egregious and widespread misconduct” in the union organizing campaign.

(Reporting by Kanishka Singh and David Shepardson in Washington and Hilary Russ in New York; Editing by Will Dunham, Tim Ahmann and Rosalba O’Brien)