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Starbucks Loses Appeal Over Firing of Unionizing Baristas in NLRB Case

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Starbucks suffered a significant legal setback on Friday as a federal appeals court largely upheld a National Labor Relations Board (NLRB) decision that the coffee giant illegally fired two baristas in Philadelphia who were seeking to unionize.

The 3rd U.S. Circuit Court of Appeals ruled that Starbucks failed to provide grounds to challenge the constitutionality of NLRB administrative law judges. This decision may hinder similar efforts by companies such as Amazon, Trader Joe’s, and SpaceX to limit the agency’s enforcement authority.

Writing for the three-judge panel, Circuit Judge Thomas Ambro stated that there was substantial evidence supporting the NLRB’s conclusion that Starbucks engaged in unfair labor practices by firing baristas Echo Nowakowska and Tristan Bussiere. The court also agreed that the company reduced Nowakowska’s hours in retaliation for her union-organizing efforts.

The court rejected Starbucks’ argument that it should not be required to rehire the baristas with back pay, despite the company’s claim that the employees secretly recorded meetings with supervisors. Starbucks argued that it discovered these recordings only after the terminations, but the court found that the company was aware of this activity prior to firing the workers.

However, the court ruled that the NLRB overstepped its authority by ordering Starbucks to cover the baristas’ foreseeable expenses, such as costs incurred while seeking new jobs or paying out-of-pocket medical bills.

Starbucks maintained that the firings were unrelated to union activity, alleging Nowakowska had performed poorly and mistreated customers, while Bussiere was accused of spreading false rumors about another employee’s termination. The company has yet to comment on the ruling.

The broader case marks the first instance of a federal appeals court addressing challenges to the NLRB’s enforcement powers, including the constitutionality of its administrative law judges being shielded from presidential removal. Judge Ambro dismissed Starbucks’ standing to challenge these protections, noting the company could not demonstrate harm.

Starbucks has faced numerous allegations of unfair labor practices amid a nationwide unionization campaign by its workers. The campaign, spearheaded by Starbucks Workers United, included strikes at more than 300 stores in December.

The cases are NLRB v. Starbucks Corp, No. 23-1953, and Starbucks Corp v. NLRB, No. 23-2241, both in the 3rd U.S. Circuit Court of Appeals.

 

Starbucks Workers Vote to Authorize Strike Amid Last Bargaining Session of the Year

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Starbucks Workers United announced on Tuesday that 98% of union baristas have voted to authorize a strike as they push for a contract with the coffee giant. The vote marks a significant escalation in the ongoing negotiations between the union and Starbucks, which have been fraught with disputes over labor conditions.

Final Bargaining Session of 2024

Bargaining delegates are scheduled to return to negotiations with Starbucks on Tuesday for the last scheduled bargaining session of the year. Both sides are aiming to agree on a “foundational framework” that will set the stage for future discussions. Despite spending hundreds of hours at the bargaining table throughout 2024, the union says that there is still no comprehensive package addressing key issues such as barista pay and benefits.

Unresolved Issues

While both Starbucks and the union have put forward numerous tentative agreements, the union emphasized that hundreds of unfair labor practice cases remain unresolved. The strike authorization vote underscores the growing tensions between the two sides. Relations had briefly improved in late February when both parties agreed to a “constructive path forward” through mediation, but the recent strike vote signals a return to a more adversarial stance.

Starbucks’ Response

Starbucks CEO Brian Niccol, who took the reins of the company in September, has committed to bargaining in good faith. Niccol announced on Monday that the company would double its paid parental leave starting in March. However, baristas are reportedly set to receive a smaller annual pay hike next year due to a sales slump at U.S. locations.

The Union Movement

Since the first union elections in Buffalo three years ago, more than 500 Starbucks cafes have voted to unionize under Workers United. The company’s resistance to the unionization effort has drawn criticism from some lawmakers and consumers, further intensifying the national debate over labor rights and corporate practices.

 

Starbucks Opens Cafe with a View of North Korea

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Starbucks has opened a unique cafe in South Korea, offering coffee lovers the chance to enjoy their brews while gazing across the border into North Korea. Located in the Aegibong Peace Ecopark in Gimpo city, the cafe sits on an observation tower, just 20 miles north of Seoul, and offers a view of the Hermit Kingdom across the Jo River, which separates the two nations.

The 30-seat Starbucks opened its doors on Friday, November 29, drawing crowds eager to witness the rare sight of North Korea from afar. On clear days, patrons can spot farms and low-rise buildings in Kaepung county, one of North Korea’s border regions. Some visitors with binoculars or high-powered cameras even reported glimpsing people walking in the distance.

“I wish I could share this tasty coffee with the people living in North Korea right in front of us,” said local resident Baek Hea-soon, 48, reflecting on the symbolic nature of the location.

A Unique Location with Historical Significance

The cafe’s position at the Aegibong Peace Ecopark is steeped in history. Situated near the Korean Demilitarized Zone (DMZ), which remains one of the most heavily fortified borders in the world, the area once hosted Hill 154, a site of fierce fighting during the Korean War. Today, the park serves as a point of interest for tourists seeking a rare glimpse into North Korea.

Gimpo Mayor Kim Byung-soo praised the location as an embodiment of the “charm of Korean culture,” while local authorities aim to leverage the site’s historical importance to increase tourism. The Starbucks outlet is one of the few ways for South Koreans and international visitors to get a look at North Korea, albeit from a distance, without entering the isolated country.

Visitors’ Reactions and International Context

On opening day, some patrons, like 80-year-old Lim Jong-chul, noted the contrast between the tense security of the region and the sense of peace offered by the cafe’s serene setting. Lim, a Vietnam War veteran, expressed that the cafe gave a feeling of reassurance despite the political tensions that persist.

The cafe’s debut comes at a time of heightened tension between North and South Korea. Despite an armistice ending the Korean War in 1953, the two countries technically remain at war, with no formal peace treaty signed. Recent remarks from North Korean leader Kim Jong Un, including threats to use nuclear weapons against South Korea, have further strained relations.

A Shift in North Korea’s Tourism Policy

While North Korea is currently closed to tourists due to the Covid-19 pandemic, tour companies suggest that the country may begin to reopen limited international tourism by the end of 2024. In the meantime, the Starbucks at the DMZ offers a new way for visitors to engage with the geopolitical landscape and the ongoing divide between the two Koreas.

The cafe provides an alternative to the typical DMZ tours that attract thousands of visitors annually, offering a unique blend of coffee culture and a front-row seat to one of the world’s most politically charged borders.