Starbucks feels more heat over labor practices
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Starbucks Corporation (NASDAQ:SBUX) continues to face backlash on the labor front. The latest headache for the Seattle-based coffee store operator was a ruling from National Labor Relations Board judge Arthur Amchan that the shutdown of a store near Cornell Universityâs campus was done in large part to discourage unionization efforts in Ithaca and elsewhere.
The judge said Starbucks (SBUX) failed to prove that it would close the store "absent its animus towards the pro-union employees who worked there." Of note, all three stores in Ithaca voted last year to unionize. Subsequently, Starbucks (SBUX) announced that it would shut down the College Avenue store in Ithaca, and this year, it said it would close the other two as well.
Starbucks (SBUX) issued a statement indicating that it plans to appeal the ruling. "We strongly disagree with administrative law judgeâs recommendations,â the company said in an email. Starbucks has said that the Ithaca stores had experienced numerous absences and high worker turnover.
Separately, the National Labor Relations Board sued Starbucks (SBUX) on Thursday over an alleged refusal by the company to rehire 33 workers as it reorganized three stores in Seattle, including the well-known location in Pike Place Market. In a petition filed in Seattle federal court, the NLRB called Starbucks' plan to reorganize the stores an illegal response to unionization efforts at another store in the region. For its part, Starbucks (SBUX) defended the actions and noted workers can seek to unionize through an NLRB-supervised election.
Shares of Starbucks (SBUX) trickled 0.14% lower in early trading to $96.07 vs. the 52-week trading range of $75.73 to $115.48.
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