Starbucks’ Pay Hikes to Non-Unionized Workers Violated Labor Laws, Judge Rules

A federal Administrative Law Judge (ALJ) ruled that Starbucks Coffee Company violated federal labor laws when it improved wages and benefits for tens of thousands of its employees throughout the United States last year.

Left out of that employee compensation plan — first promoted by Starbucks in October 2021 and taking effect in August 2022 — were the company’s unionized store employees, which currently comprise less than 3% of the company’s U.S. workforce, according to court documents.

In a 45-page ruling last week, Administrative Law Judge Mara-Louise Anzalone said Starbucks was guilty of repeatedly employing a “carrot and stick” tactic, in which the promise of improved wages and benefits was used as an incentive to dissuade unionization among workers.

The ruling ties the employee wage and benefits scheme that took effect Aug. 29 of last year to the original unionization efforts at individual Starbucks locations in the Buffalo, New York, market in late 2021. Since then, workers at at least 300 of the approximately 9,000 Starbucks company-owned locations in the United States have voted in favor of unionization.

Starbucks has argued that making unilateral pay changes to wages or benefits for unionized or unionizing employees would have actually violated the National Labor Relations Board‘s own laws protecting the integrity of the election process.

Anzalone rejected that argument, saying that it was not offered in “good faith” based on her review of public comments and testimony. Anzalone’s ruling orders Starbucks to compensate unionized employees for wages and benefits lost since the new pay took effect.

Starbucks has announced plans to appeal the ruling, saying, “The ALJ’s recommendation that Starbucks should or could have disregarded these rules is flatly wrong and creates an untenable situation — which has already been rejected by federal courts — where employers violate the law if they unilaterally include organizing or unionized employees when making changes in wages and benefits and violate the law if they do not do so.”

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