A Brilliant Strategy of Playing Hard to Get! Howard Schultz's Management of Starbucks is Truly Impressive!

On April 5th, on his very first day back as Starbucks' interim CEO, Howard Schultz announced that the company was suspending its multi-billion-dollar share buyback program, saying the money would be better invested in employees and stores. In plain terms: funds that would have gone into repurchasing stock would now boost benefits for current partners and fund store operations.

The news landed like a jolt of hope for the partners who had recently formed the first Starbucks employees' unions in the United States. Many believed their organizing had "forced" the company's hand — and in the days that followed, more and more Starbucks employees voted to join existing unions.

Before returning, Schultz had already spoken with the leadership of the first unionized Starbucks store. He told New York Times reporters that the company had failed to help stores solve their operational problems, and that employees were rightfully disappointed. Union members took this as a promise that the 2022 Starbucks plan would raise their benefits and fix understaffing.

And yes — Schultz genuinely intended to improve employee benefits. But! Partners in unionized stores might not get to enjoy any of it. The reason: legally, the new policies cannot automatically extend to unionized stores or union members.

Legal Constraints on Benefit Distribution

On April 13th, Schultz told store managers from across the United States in an online meeting that Starbucks was reviewing its benefits system with an eye to expanding the employee benefits program — changes that would help reduce turnover and make it easier for stores to recruit and keep baristas.

But those new benefits, by law, cannot simply be given to stores that voted to unionize or to partners who joined a union. Under federal law, Starbucks cannot unilaterally change the compensation and benefits of union members or the operating funds of unionized stores; it must first negotiate separately with union representatives.

Legal Expert Perspective

Commenting on Schultz's remarks, one American labor law expert noted that Starbucks has the right to discuss differences in benefits between unionized and non-unionized partners — but cannot make implied threats. Once a company implies that unionized partners will receive worse benefits than non-unionized ones, it edges toward evidence of bad-faith bargaining, potentially constituting an unfair labor practice. Schultz's speech, the expert said, was merely explaining legal requirements, making it hard to establish any such implication.

Shift in Union Strategy

Granted, the meeting only explained the legal requirements and stated that the company would draft two separate benefits policies in accordance with the law. But compared with Starbucks' previous hard-line efforts to block union formation before Schultz's return, the tone was markedly gentler...

If the hard approach doesn't work, try the soft one.

Image source: Internet

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