Howard Schultz quit Starbucks after branded ‘distraction’ in union row

Starbucks’ former CEO Howard Schultz quits company’ board after he was branded a ‘distraction’ over anti-unionization ranks in Congress, insider claim

  • Howard Schultz, who has ran Starbucks on-and-off for 40 years, will step down from the board, the company announced on Wednesday
  • Schultz, 70, has strongly resisted employees’ push to unionize, and a source said that Schultz was becoming a ‘distraction’ for the company
  • He will now be chairman emeritus: his hand-picked successor as CEO, Laxman Narasimhan, took over in March 

Veteran Starbucks boss Howard Schultz is stepping down from the company’s board after 40 years with the coffeehouse, with sources saying he realized he has become a ‘distraction’ for the chain.

Schultz, 70, bought the company from co-founders Jerry Baldwin, Zev Siegl and Gordon Bowker in the early 1980s, a decade after it was launched in Seattle.

But on Wednesday, Starbucks unexpectedly announced that Schultz was stepping down from the board, ending his four-decade rule.

Schultz’s departure is in part due to concerns that his stridently anti-union stance was becoming a ‘distraction’, and the controversy was not helping the brand.

‘The business has changed a ton since Howard’s heyday,’ a source told The New York Post.

‘It doesn’t make sense for him to be part of it anymore.’

Howard Schultz is pictured in March testifying about his company's resistance to unionization

Schultz is seen in 1983 in Italy, on a research trip. On his return he tried to convince the three Starbucks founders to offer traditional espresso beverages in addition to the whole bean coffee

Schultz pushed the company to become the world’s largest coffeehouse chain, serving three stints as chairman and CEO. He retired in 2000, then returned in 2008; stepped down in 2017, and came back as interim CEO from 2022 to March 2023.

In his latest stint, Schultz has faced pressure from stores looking to unionize. At least 293 of Starbucks’ 9,000 company-owned U.S. Starbucks stores have voted to unionize since late 2021, according to the National Labor Relations Board.

Starbucks Workers United, the labor group seeking to unionize stores, has yet to reach a contract agreement with the company at any Starbucks store.

The fledgling group celebrated Schultz’s departure, tweeting on Tuesday: ‘Howard Schultz led one of the worst union-busting campaigns in modern US history, culminating in him being forced to testify before the Senate on Starbucks’ illegal actions.

‘We hope this is an opportunity for Starbucks to change course and leave their union-busting behind them.’

Starbucks’ anti-union stance appears set to continue under the company’s new CEO, Laxman Narasimhan, who was hand-picked by Schultz and took over leadership of the company in March – shortly before Schulz testified in the Senate.

‘I continue to believe a direct relationship with our partners is the best way forward,’ said Narasimhan.

Schultz is seen in 2002, opening Starbucks in Japan

Schultz – who will now become ‘chairman emeritus’ – has been outspoken against plans for Starbucks workers to unionize, saying the company was ‘under assault from unionization.’

Judges and prosecutors have accused the company of violating labor laws, and in March, Schultz appeared before Congress to defend the company’s position.

During an often testy, two-hour appearance before the Senate Health, Education, Labor and Pensions Committee, Schultz said a union was not necessary because the coffee company already provides good wages and benefits, and only around one percent of Starbucks’ 250,000 U.S. employees have elected to join a union.

‘We’ve done everything that we possibly can to respect the right under the law of our partners’ ability to join a union,’ Schultz said.

‘But conversely, we have consistently laid out our preference, without breaking any law, of communicating to our people what we believe is our vision for the company.’

Bernie Sanders, a Vermont Independent who has been a vocal supporter of Starbucks labor organizers, accused the company of stalling.

He said multiple federal courts and administrative judges at the NLRB have found Starbucks guilty of hundreds of labor law violations, including firing labor organizers and illegally closing unionized stores.

Schultz is seen in March 2019, while considering an independent run for the White House. In June 2019 he announced he would not run for the presidency

‘The fundamental issue we are confronting today is whether we have a system of justice that applies to all, or whether billionaires and large corporations can break the law with impunity,’ Sanders said.

But Schultz defended the company, noting that Starbucks’ average starting wage is $17.50, while the minimum wage in Vermont is $13.18.

‘I think unions have served an important role in American business for many years,’ Schultz told the committee.

‘In the ’50s and ’60s, unions generally were working on behalf of people in a company where people haven’t been treated fairly.

‘We do not believe that we are that kind of company. We do nothing nefarious. We put our people first.’

Senator Tina Smith, a Minnesota Democrat, questioned Schultz’s respect for employees, noting that the company has refused to add new benefits — like credit card tipping or wage increases — at stores that have unionized.

‘You’re a billionaire and they are your employees. The imbalance is extreme,’ Smith said.

Schultz angrily responded that repeatedly calling him a ‘billionaire’ was unfair.

‘I grew up in federally subsidized housing. My parents never owned a home. Yes, I have billions of dollars. I earned it. No one gave it to me,’ he said.

On Wednesday, Schultz said he supported the company’s new bosses.

‘I look forward to supporting this next generation of leaders to steward Starbucks into the future as a customer, supporter and advocate in my role as chairman emeritus,’ he said. 


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