Starbucks Corp (NASDAQ: SBUX) has been found in violation of federal labor law for selectively raising wages and offering improved benefits to its non-unionized stores across the U.S. last year, according to a decision by Administrative Law Judge Mara-Louise Anzalone.
This ruling marks the first nationwide action taken against the coffee giant in response to the ongoing unionization efforts that began two years ago.
The National Labor Relations Act violation in August 2022 occurred when Starbucks increased hourly wages to a minimum of $15 and introduced benefits like credit card tipping, enhanced training, and accelerated sick time accrual, but only for stores that were not unionized.
The decision states that Starbucks CEO Howard Schultz announced these policy changes six months after workers initiated the organization with Starbucks Workers United, Bloomberg noted
Judge Anzalone characterized Starbucks' actions as an attempt to manipulate employees' choices by linking their pay and benefits to their willingness to abstain from organizing, directly conflicting with the Act's core objectives.
As a result of this ruling, Starbucks is required to compensate thousands of unionized workers for the wages and benefits they were unjustly denied.
While more than a dozen previous rulings had gone against Starbucks on a store-by-store basis, this decision is the first to conclude that the company systematically violated the law nationwide.
The Starbucks unionization movement has led to nearly 350 organized cafes in 37 states, with the National Labor Relations Board (NLRB) filing almost 100 complaints against the company for its response, 75 of those cases still pending.
Price Action: SBUX shares are up 1.26% at $92.23 premarket on the last check Friday.