Addressing a NLRB Complaint involving store closures in 2022
Yesterday, the Regional Director for NLRB Region 19 issued a Consolidated Complaint alleging the closure of 23 stores — including 16 non-union stores — in 2022 was a violation of the National Labor Relations Act. We firmly believe that these allegations lack merit, and we plan to defend our lawful business decisions at an eventual Administrative Law Judge (NLRB) hearing on the matter.
As we continue to grow our U.S. footprint of stores, like any retail business, we regularly open and close stores for a variety of reasons. For example, in fiscal year 2022, we opened 437 new stores and closed 116 stores across the U.S., of which approximately 3% were represented. Similarly, the Company closed more than 400 stores in the U.S. in fiscal year 2021, 182 in fiscal year 2020, and 196 in fiscal year 2019.
Store closures included in the Consolidated Complaint were outcomes of regular business reviews, which assess the health and overall footprint of our store portfolio. The difficult decision to close any store follows an extensive review process intended to advance the Starbucks experience we deliver for our partners and customers — and is done without regard to union status.
Following announcement of these closures, all partners were provided the opportunity to transfer to another nearby store. Additionally, at each of the seven stores represented by Workers United, Starbucks notified the union of the intended closure, bargained in good faith over the effects of the store closures on represented partners, and reached agreement with Workers United covering the effects of the closures. Those agreements included, for instance, transition plans by which partners could transfer to designated stores and retain their titles and rates of pay.
What’s next?
Even though NLRB Region 19 investigated and initially decided to dismiss allegations involving 15 non-union stores in the original charge filed by Workers United, the General Counsel for the NLRB reversed the Regional Director and order all charges reinstated before Regional Director Ronald K. Hooks issued the Consolidated Complaint.
Before the NLRB’s General Counsel in DC intervened, and reversed, Regional Director Ronald K. Hooks “decided to dismiss that portion of the charge alleging that stores [15] listed … in this matter were closed in retaliation for employees’ union activities and/or without notice to the Charging Party Union and an opportunity to bargain. Therefore, further proceedings on these allegations are not warranted and I am refusing to issue complaint.”
Starbucks does not know why the General Counsel’s office in DC reversed the initial recommendation of its field investigators and the Regional Director in Seattle. As a next step, we will have the opportunity to defend the lawful business decision to close identified stores at an upcoming NLRB Administrative Law Judge hearing.
The Complaint does not represent a finding on the merits of the case and does not impose, or order Starbucks to adopt, any of the remedies proposed by the NLRB Regional Director. Furthermore, no judge or court has ruled on the merits of any underlying charges made and has made no enforced order on the matter.
“The proposition that ‘Starbucks has not been found to have violated the law as part of any enforced order of the NLRB to date’ remains correct.”
From the Abridged Report on Starbucks’ adherence to freedom of association and collective bargaining commitments in its Global Human Rights Statement
Despite these claims, we continue to operate and run our business in a way that seeks to fulfill our partner promise and uphold the Starbucks experience in every store.
As shared with Workers United last week, and reaffirmed in our announcement yesterday, we respect our partners’ right to organize, freely associate, engage in lawful union activities and bargain collectively without fear of reprisal or retaliation. We look forward to working with our partners and those elected to represent them to ensure we create a bridge to a better future for all partners.