Union busting has been the norm in much of corporate America as companies like Jeff Bezos’ Amazon and Elon Musk’s Tesla have taken a hard line toward labor organizing. But the tide is hopefully changing. Last year labor unions won victories in strikes by autoworkers as well as Hollywood actors and screenwriters. A Gallup poll showed that 67% of Americans approved of labor unions.
Two leading U.S. corporations—first Microsoft and more recently Starbucks, in a major reversal—have now declared that they will stay neutral and not oppose efforts by their employees to join unions. This could be a major breakthrough for organizing in the private sector where only 6% of workers are union members.
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December saw two major developments. Starbucks suddenly reversed course and abandoned its union busting campaign, declaring its desire to reach contract agreements with its unionized stores by the end of 2024. It also pledged to conduct bargaining “in a way that honors and respects the dignity, individuality and privacy of our partners.”
That same month, Microsoft President Brad Smith took part in a forum at the AFL-CIO headquarters in Washington, D.C., where he announced that the tech giant will stay neutral if any group of workers seeks to form a union. About 100,000 Microsoft employees would be eligible for unionization.
Microsoft and the labor federation also said they would work together to resolve any issues that might arise from the adoption of artificial intelligence in the workplace, The New York Times reported.
“Never before in the history of these American tech giants, dating back 50 years or so ago, has one of these companies made a broad commitment to labor rights,” AFL-CIO President Liz Shuler said at the forum. “It is historic. Not only have they made a commitment, they formalized it and put it in writing. … We are creating something groundbreaking today.”
The leftist Jacobin website wrote that Starbucks’ agreement to negotiate with Starbucks Workers United Union, an affiliate of the Service Employees International Union, “may well be the most important union organizing breakthrough in decades.” Jacobin wrote:
SWU’s victory is proof of concept for other workers in low-wage, high-turnover industries. Traditional wisdom in the US labor movement saw such workers as unorganizable, the ease with which bosses could replace them and the short tenure of the average worker a seemingly insurmountable obstacle to the arduous, lengthy process of unionizing. No longer. Starbucks workers have now shown that, with the right support from organized labor and the freedom to take the lead on organizing themselves — a means of scaling up a campaign in a fashion that moves faster and costs less in organizing resources — it can be done.
That proof couldn’t have come at a better time. Workers are now as eager to unionize as they’ve been in decades, and public sentiment is resolutely pro-union. More than five hundred thousand workers went on strike last year, and most of them won big. It was a textbook example of seizing the moment, using the tight labor market to go on the offensive.
The first success in the unionization drive at the coffee chain came back In December 2021, when workers at a Starbucks store in Buffalo, New York, became the first store to vote to unionize. About 400 Starbucks stores—with roughly 10,000 workers—have voted to join Starbucks Workers United since then, according to the Labor Notes website.
The unionization campaign proceeded despite the company engaging in such tactics as intimidating and firing baristas, hiring union-busting attorneys, and refusing to bargain with any of the unionized outlets. Howard Schultz, the coffee chain’s longtime CEO, vehemently opposed the unionization drive, saying it clashed with his image of Starbucks as “a model employer,” The New York Times reported. When asked in a June 2022 interview if he could ever imagine embracing the union, Schultz gave a one-word response: “No.”
The union busting campaign resulted in the National Labor Relations Board issuing dozens of complaints against Starbucks based on hundreds of unfair labor practice charges brought against the company, The New York Times reported. In January, the Supreme Court agreed to hear a case brought by Starbucks challenging a federal judge’s order to reinstate seven union activists who were fired at a store in Memphis. Starbucks also raised questions about the constitutionality of the NLRB in its defense against charges of unfair labor practices.
Schultz stepped down as CEO and retired from the board of directors. The new CEO, Laxman Narasimhan, signaled in a conciliatory letter sent out in December that the company wanted to improve its relations with its workers, whom it refers to as partners.
Then last week, Starbucks and Workers United announced in a joint statement that they were beginning discussions on a “foundational framework to achieve collective bargaining agreements” with unionized workers and resolve litigation between the two sides.
Starbucks also agreed to a “fair process for organizing.” As a gesture of “good faith,” the company said it was providing unionized workers with benefits it introduced in 2022, but withheld from union stores such as an option for customers to tip via credit card.
Representatives for both sides said that while details must be worked out, they hoped to be back at the bargaining table in the coming weeks. Any national contract would be augmented by supplemental contracts covering issues such as safety provisions or scheduling at particular outlets.
The breakthrough was welcomed by President Joe Biden. In a post on X, formerly known as Twitter, the president wrote:
Harold Meyerson, writing for The American Prospect, said the company’s CEO “was doubtless aware of the pounding Starbucks was taking in the court of public opinion.”
A union-aligned fund, the Strategic Organizing Center, nominated a high-profile pro-union slate, including former NLRB Chair Wilma Liebman, to run for three seats on Starbucks’ board at the company’s yearly shareholder meeting scheduled for next week. The SOC had asked the U.S. Securities and Exchange Commission to call on Starbucks to disclose to shareholders how much it had spent on its anti-union campaign, which the labor group estimated at $240 million.
And student organizers, faculty members, and workers at 25 university campuses across the U.S. were urging their schools to cancel their contracts with Starbucks over its anti-union policies.
Starbucks owns about 9,700 outlets nationwide, and employs about 250,000 baristas. If the company honors its neutrality pledge and negotiates a national contract, it’s likely to set off a “chain reaction,” with thousands of workers voting to join the union, Meyerson wrote. There are another 7,000 outlets owned by franchisers whose workers would press for pay and benefits comparable to those in any national contract for union stores.
The New York Times wrote that workers who have helped lead the organizing drive were surprised by the company’s remarkable turnaround:
“It still feels pretty surreal right now,” Michelle Eisen, a longtime barista at a Starbucks in Buffalo that was the first company-owned store to unionize, told the Times. “There has not been a single call I’ve been on today where either I wasn’t crying or everyone else wasn’t crying.”
Microsoft, however, once had a reputation which The New York Times described as “a poster child for corporate ruthlessness.” Out of self-interest it took a very different approach than Starbucks when first confronted with a unionization campaign. That came in 2022 when the tech giant was seeking to acquire the video game maker Activision Blizzard for nearly $70 billion to make it part of its Xbox team. The Communications Workers of America was in the midst of an organizing campaign among Activision’s over-stressed, under-paid quality assurance testers.
The New York Times wrote:
Shortly after Microsoft announced its plans to purchase Activision, a coalition of liberal groups told the Federal Trade Commission that the deal could “lead to an undue concentration of market power,” effectively reviving the 25-year-old critique of Microsoft as a monopolist. Among the groups in the coalition was a prominent union: the Communications Workers of America.
But then Microsoft’s president Smith and CWA President Chris Shelton announced in June 2022 that the tech company would stay neutral in union campaigns at Activision if the acquisition was finalized. And Microsoft kept its neutrality policy when Q.A. testers at one of its own video game companies, ZeniMax Media, voted to join the CWA.
Then in December, Smith extended the neutrality policy toward any group of Microsoft employees seeking to join a union affiliated with the AFL-CIO. Meyerson wrote in The American Prospect that Smith and Microsoft CEO Satya Nadella might have been looking to the future and realizing that young workers have pro-union sentiments. He wrote:
Over the past 18 months, the grad student teaching and research assistants at both MIT and Cal Tech have voted overwhelmingly to unionize. A harsh anti-union policy might deter some of the best upcoming talent from coming. A union’s-fine-with-us policy, by contrast, might just help attract the next Bill Gates.
So far companies like Amazon and Google have been anything but neutral, waging fierce union busting campaigns. The New York Times wrote that this could “give Microsoft an advantage in the highly competitive market for engineers, some of whom have made clear that political and social issues affect their choice of employer.”
The Times added:
Liz Shuler, the A.F.L.-C.I.O.’s president, said Microsoft had gone further in collaborating with organized labor than almost any other major company. She said she first met Mr. Smith to discuss labor issues almost two years ago, at which point he told her, “If workers want a union, why shouldn’t they be able to form one?” Then he added: “This is the prevailing winds of change in the country. I think Microsoft should be adapting to it instead of resisting it.”
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