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Are Starbucks and Whole Foods Union Busters?

Inside the secret anti-union meetings, and how the companies plan to rewrite the labor-friendly Employee Free Choice Act.

| Mon Apr. 6, 2009 6:56 PM EDT

Shortly before the inauguration of President Barack Obama, the manager of a Whole Foods grocery store in the San Francisco Bay Area gathered his employees in a conference room for a chat about labor organizing. “This is not a union-bashing thing whatsoever,” the manager began, adding, however, that he’d called the meeting because Whole Foods believed Obama would sign the Employee Free Choice Act, legislation intended to ease unionization that was opposed by the company’s lobbyists. According to a tape of the meeting obtained by Mother Jones, the manager went on to imply that joining a union would lead to reprisals: “It’s interesting to note that once you become represented by the union,” he said, “basically everything, every benefit you have, is kind of thrown out the window, and you renegotiate a contract.”

"I think it’s probably fair to construe [that comment] as a threat,” concluded Tim Peck, a representative of the National Labor Relations Board (NLRB) in San Francisco, after Mother Jones read him quotes from the meeting, one of several anti-union trainings held by the company in recent months. Peck pointed out that labor law bars employers from threatening to strip benefits from workers in retaliation for unionizing. “The ‘flying out the window’ [comment] kind of suggests that the benefits are gone,” he noted. Legally, “that wouldn’t pass muster.”

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That Whole Foods stands accused of union busting comes at an inconvenient time for the company, which late last month unveiled the Committee for a Level Playing Field for Union Elections, a partnership with Starbucks and Costco that aims to rewrite the Employee Free Choice Act. This year’s top priority for organized labor, EFCA would allow employees to form a union automatically if a majority of them sign pledge cards—a plan known as “card check”—instead of requiring them to vote in secret elections that unions say employers can manipulate. Whole Foods opposes card check, yet has rankled business interests by suggesting other ways to make it easier for workers to unionize, such as guaranteeing union campaigners access to workers and boosting enforcement and penalties for labor law violations. “This is a third way,” says Whole Foods’ attorney Lanny Davis, a former special counsel to President Bill Clinton and self-described “pro-labor, liberal Democrat.”

Unlike Costco, where 20 percent of workers are represented by the Teamsters, Whole Foods and Starbucks stores haven’t been organized by traditional unions. And yet their cultures are steeped in the language and norms of the labor movement. Starbucks calls its workers “partners” and Whole Foods dubs them “team members.” A “Business Conduct Helpline” allows Starbucks baristas to a report workplace issues anonymously, and special committees of Whole Foods workers and managers resolve disputes. Both companies offer employees relatively generous wages and health benefits and routinely make Fortune’s list of “Best Companies to Work For.”

The firms’ granola reputations could give Democrats political cover to support a compromise on EFCA, averting a likely Republican filibuster. Yet the stores’ unique, do-gooder mentality paradoxically has left little space for actual unions. In 1997, Starbucks CEO Howard Schultz wrote that he wanted workers “to believe in their hearts that management trusted them and treated them with respect...If they had faith in me and my motives, they wouldn’t need a union.” Whole Foods’ avowedly libertarian CEO, John Mackey, has compared the prospect of having unions at his stores to “having herpes.” An internal Whole Foods document listing “six strategic goals for Whole Foods Market to achieve by 2013,” obtained by Mother Jones, includes a goal to remain “100% union-free.”

Meeting that goal could be especially tough for Whole Foods and Starbucks if the economic downturn begins to reverse a decades-long decline in labor organizing. Consumers’ move toward cheaper food and drink is pressuring the chains to cut wages and hours. Starbucks baristas from the East Coast and Midwest have held raucous labor protests; cuts in shifts at some Whole Foods stores have prompted employees at one Bay Area location to seriously discuss unionizing.

Mackey “is not opposed to giving union organizers a fair shot to persuade his team members” to unionize, Davis says. But the reality is that both companies, neither of which would comment in detail for this story, have repeatedly resorted to tough union-busting tactics—often breaking the law along the way. In recent years they fired union organizers or packed worker rolls with anti-union employees in efforts to prevent workers from forming unions or winning union contracts, government records show.

Starbucks' and Whole Foods’ anti-union, pro-worker stance "is the essence of benevolent paternalism," says Kim Fellner, whose book, Wrestling With Starbucks: Conscience, Capital, Capuccino, praises many of the company’s other employment practices. “These are companies that want to do good by their workers, but want to decide what that good is, rather than letting the workers decide for themselves. And that’s a problem.” She calls the companies’ approach to EFCA "entirely consonant with the way that they have acted towards unions over the long haul. It’s the place where their social responsibility really broke down.”

The Skinny on Starbucks

In 2004, faced with the first serious effort in decades to unionize one of its stores, Starbucks launched what a former worker calls “a scorched-earth campaign” against pro-union employees. The effort resulted in more than a dozen violations of the National Labor Relations Act, a judge found in an 88-page ruling last year. “The union busting has just been absolutely relentless,” says the worker, Daniel Gross, who set out to organize the company’s store on the east side of midtown Manhattan before Starbucks fired him in 2006.

Gross and other workers, unhappy with the refusal of the Manhattan store to guarantee any full-time shifts, had planned to vote on whether to be represented by the Industrial Workers of the World. As the election neared, Starbucks brought in a manager, Fabian Vera, whose only job was to oppose the union, Gross says. Vera took workers on walks around the block to assess their positions and argue his case. Three pro-union workers were discriminatorily fired at three New York stores, the labor judge later ruled, while anti-union workers were rewarded with free gym passes and Mets tickets. In recent years Starbucks has settled five labor complaints in connection with similar practices in New York City, the Twin Cities, and Grand Rapids, Michigan. “This is not a few bad apples,” Gross says. “This is a company really undermining the right to organize.”

Despite the union’s legal victories, its effort to unionize the Manhattan store fizzled. Starbucks challenged a 2004 ruling that had required the union election, thereby stalling the vote for the duration of the appeals process, which can drag on for up to three years. Rather than see the appeal adjudicated by a Bush-controlled NLRB, the union canceled the vote that summer. “To compare this to a fair election process just defies all credibility,” says Gross, who must wait to be compensated by Starbucks for being illegally fired until another appeal is resolved. “It’s almost impossible to describe how unlevel a playing field it is.”

Union organizers say Starbucks’ and Whole Foods’ behavior illustrates why card check, the cornerstone of EFCA, is so important. Allowing employees to sign cards to authorize union representation lets them organize below the radar of employers, preventing bosses from retaliating against pro-union workers and stalling a vote. “The choice about whether and how to form a union is something that belongs to workers,” says Ari Yampolsky, a campaign coordinator for the Service Employees International Union. “Employers should have about as much say in that as workers do about whether and how employers join the Chamber of Commerce.”

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