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WASHINGTON — Sen. Bernie Sanders and Howard Schultz are squaring off Wednesday in a highly anticipated hearing about the company’s labor practices, which the former Starbucks CEO is defending against criticism.
Schultz is testifying before the Senate Health, Education, Labor and Pensions Committee, which is chaired by Sanders, I-Vt., in a hearing unsubtly titled, “No Company is Above the Law: The Need to End Illegal Union Busting at Starbucks.”
It comes after weeks of clashes between the Sanders-led panel and Starbucks, which unsuccessfully urged the panel to hear testimony from someone other than Schultz, who officially exited the company on March 20. Sanders refused and Schultz eventually agreed to testify under threat of subpoena.
“Strong unions are a vital part of rebuilding the declining middle class in this country,” Sanders said in his opening statement, adding that as union activity has risen, “corporations have engaged in an unprecedented level of illegal union busting activities” and blamed Starbucks. “Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country.”
The hearing, which began at 10 a.m. ET, features a defense of Starbucks labor practices from Schultz and testimony from a Starbucks barista, a former Starbucks worker and other witnesses.
Schultz immediately found a warmer reception from Republicans on the committee, with Ranking Member Bill Cassidy, R-La., saying that the hearing is “not a good faith effort to get the facts.”
“It’s a smear campaign against an individual and a company based upon allegations that everyone knows are still under litigation,” Cassidy said. “Let’s not kid ourselves. This is not a fair and impartial hearing.” He also criticized the National Labor Relations Board for putting “their thumb on the scale for unions.”
Sen. Mitt Romney, R-Utah, said before the hearing: “There’s the old irony, which is you’ve got a Mormon non-coffee drinker conservative defending a coffee company CEO who ran for president as a Democrat.”
Schultz will tell lawmakers that the company “has engaged in good faith bargaining” and “has complied with the National Labor Relations Act,” according to written testimony shared with NBC News.
“Starbucks respects the right of all partners to make their own decisions about union representation, and Starbucks is committed to engaging in good faith collective bargaining for each store that has a union. I embrace these commitments,” Schultz will say. (Starbucks uses the term “partners” to refer to its employees).
He will add that Starbucks has “been arranging more than 350 bargaining sessions involving more than 200 sets of negotiations — each relating to a single store — and Starbucks representatives have been physically present at more than 85 sets of negotiations.”
“However, union representatives have improperly demanded multi-store negotiations, delayed or refused to attend meetings and insisted on unlawful preconditions such as ‘virtual’ bargaining and participation by outside observers, among other things,” the former CEO will say, according to the prepared remarks.
Sanders, a two-time Democratic presidential primary runner-up who has built a brand as a champion of labor unions, has taken a keen interest in Starbucks and Schultz.
A recent report by Democratic majority staff on the HELP Committee declared: “Under Schultz’s leadership, Starbucks has become the most aggressive union-busting company in America.”
It said the NLRB “has filed over 80 complaints against Starbucks for violating federal labor law and there have been over 500 unfair labor practice charges lodged against this company. These violations include the illegal firing of more than a dozen Starbucks workers for ‘the crime’ of exercising their right to form a union and collectively bargain for better wages, benefits, and working conditions.”
A Sanders communications aide said the report was released to counter claims from the company so that viewers “don’t get blended into a Frappuccino by Starbucks’ PR team.”
Gianna Reeve, a Starbucks worker in Buffalo, New York, and organizing member of Starbucks Workers United, said in a statement that the union hopes the hearing “exposes Starbucks’ illegal union-busting campaign and exposes the truth about how Starbucks really treats their workers.” Reeve added that “you can’t be a progressive company and be anti-union.”
As part of his prepared testimony, Schultz will also tell senators that “it is clear that prior to my return last April the company had lost its way on many levels.”
“Under former leadership, the dangerous influence of Wall Street short-termism that I had always rejected had found its way into the company. … Focusing on Wall Street short-term targets as a priority, and not our people and customers, is antithetical to our history and breaks the equation that built Starbucks,” he plans to say. “As I watched the company over the last few years after I stepped away, it became clear to me that Starbucks had lost sight of what drove the company’s success — making our partners and customers proud — and that the company’s culture and its future were at significant risk. Starbucks is addressing those shortcomings.”
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