Starbucks Ordered to Provide Documents on Unionizing Efforts to U.S. Regulators

Starbucks Corp has been ordered by a federal judge to provide documents detailing its spending on efforts to discuss unionizing with workers to U.S. regulators. The decision comes as part of an investigation into whether the coffee chain violated financial disclosure laws. The U.S. Labor Department announced the ruling on Friday, requiring Starbucks to document travel expenses paid to former CEO Howard Schultz and other company officers who visited Buffalo, New York in 2021 after workers there filed a petition for a union election.

The Labor Department subpoenaed this information as part of its investigation into whether Starbucks should have disclosed expenses related to the trip and bonuses paid to company officers. Federal law mandates employers to report expenses aimed at discouraging organizing and union membership.

In December 2021, a Buffalo Starbucks became the first in the company’s history to unionize, with workers at over 360 U.S. locations following suit. Allegations of illegal union-busting have been leveled against Starbucks and Schultz by workers, labor groups, and Democratic lawmakers. The company has denied these claims and is currently defending itself against numerous complaints before the National Labor Relations Board (NLRB).

Last week, the NLRB ruled that Starbucks must provide a document known as the “petition store playbook,” which outlines the company’s response to worker petitions for union elections. This request was made in a case involving organizing at a Connecticut store.

In addition to the above, U.S. District Judge Marsha Pechman in Seattle has also ordered Starbucks to provide records of expenses related to the creation and maintenance of a website providing information about union organizing.

Starbucks, in a statement, clarified that it has not been accused of any wrongdoing by the Labor Department. The company intends to continue engaging with government officials to provide clarifying information on its compliance with labor laws.

Jeff Freund, director of the Labor Department office responsible for enforcing the reporting law, stated that the judge’s ruling will assist the agency in determining whether Starbucks was obligated to report expenses related to the Buffalo trip and the website. The Labor Department served the subpoena on Starbucks earlier this year and filed a court petition in May after the company objected.

Starbucks had argued that the disclosure law did not require reporting of payments to its own employees involved in responding to union campaigns. The company contended that the Labor Department had never previously requested such information and that it would be illegal for the agency to reverse course without adopting a formal rule. Judge Pechman ruled that Starbucks could raise these arguments as defenses if the Labor Department accuses the company of violating the disclosure law, but not to dismiss the subpoena.

In conclusion, Starbucks is now required to provide the requested documents to U.S. regulators as part of the ongoing investigation into its compliance with financial disclosure laws.