Business
As Starbucks CEO, Howard Schultz violated labor law with barb at Long Beach barista, labor board finds
In April 2022, a Starbucks barista and union organizer was invited to meet with the company’s upper management in Long Beach. During the meeting, the employee raised several concerns, including charges of unfair labor practices the company faced.
Howard Schultz, who had just begun his third stint as the company’s chief executive, became irritated and shot back: “If you’re not happy at Starbucks, you can go work for another company.”
Now, the National Labor Relations Board has found that Schultz acted unlawfully by inviting an employee to quit after they raised issues related to unionization.
The board’s decision, issued Oct. 2, ordered Starbucks to cease and desist from implying employees could be fired for engaging in protected activities such as union organizing. The company must also post a notice of employee rights at all of the Long Beach stores from which employees attended the meeting with Schultz.
In its decision, the board wrote that it has “long held unlawful employers’ statements that employees dissatisfied with working conditions should quit rather than try to improve them through union activity.”
Starbucks did not immediately respond to a request for comment regarding the NLRB’s Long Beach decision, which comes as the coffee chain has changed its stance on unionization efforts.
Until this year, the company had ardently resisted the campaign to organize its workers, which began in 2021. Federal labor regulators found Starbucks repeatedly violated labor laws by disciplining and firing workers involved in unionizing activity, shutting down stores and stalling contract negotiations.
But in February the company announced it had agreed with the union behind the campaign, Starbucks Workers United, to streamline negotiations on contracts and take a more neutral approach when workers at unionized stores took steps to organize.
Earlier this week, the unionization drive reached a milestone, when a store in Washington became the 500th U.S. location to unionize. Starbucks Workers United has credited the company’s new posture for a wave of some 100 Starbucks stores that have unionized since March.
The Starbucks Workers United logo appears on the shirt of a person attending a hearing in Washington on March 29, 2023.
(J. Scott Applewhite / Associated Press)
“We’re happy to see the NLRB continue to stand up for workers and our legal right to organize. At the same time, we’re focused on the future and are proud to be charting a new path with the company,” Michelle Eisen, national organizing committee co-chair at Starbucks Workers United and a barista at a Buffalo, N.Y., store, said in an emailed statement about the decision on Schultz’s comment.
Starbucks spokesperson Phil Gee said the company disagreed with the decision, and that sessions such as the one held with baristas in Long Beach and other locations across the country aimed to gather input from workers.
“Our focus continues to be on training and supporting our managers to ensure respect of our partners’ rights to organize and on progressing negotiations towards ratified store contracts this year,” Gee said in emailed statement Friday.
Beyond charges from federal regulators and other fallout from its earlier anti-union approach, the company is grappling with a change in leadership, softening demand, boycotts over its perceived support for Israel, pressures from activist investors and criticism that it has strayed far from its roots with menus of overly complicated items that take too long to serve. Sales in North American stores dipped 2%, and sales in the rest of the world dipped 7%, the company reported in July.
Schultz stepped down last year and in August the company named a new chief executive, Brian Niccol, to replace Schultz’s successor. Niccol has said he’ll stick with the company’s new position on unions.
“I deeply respect the right of partners to choose, through a fair and democratic process, to be represented by a union,” Niccol wrote in a letter addressed to union members and posted on the company’s website last week. “I am committed to making sure we engage constructively and in good faith with the union and the partners it represents.”
Niccol penned the remarks in response to a letter signed by hundreds of workers who serve as bargaining delegates from various stores for the union. The workers reached out ahead of a scheduled bargaining session, the first of Niccol’s tenure.
Still, workers’ views on whether to unionize is not unanimous.
As employees at the store in Washington were voting to join the union, workers at a Starbucks in Hollywood on Monday chose not to join. Also on that day, a store in Salt Lake City failed to secure votes needed to win union recognition.
The NLRB has conducted a total of 602 union elections at Starbucks stores, with 102 of them falling short and 500 passing, according to NLRB spokesperson Kayla Blado. In California, 61 stores have held union elections and 41 of them have had their bargaining units recognized by the labor board.
At the Hollywood store, pro-union workers had been optimistic ahead of the vote count, which came out 14 opposed to unionization to 6 favoring it. The workers had reached out to union officials in February, frustrated by problems of chronic understaffing.
Mikey Martinez, a shift supervisor who has worked at the store for more than five years, said he was fearful when he and co-workers began talking about unionizing. But his initial concerns about backlash dissipated after managers held a meeting about a month ago to explain the company’s new, more neutral stance.
It was “really good to be able to speak about it without checking behind our shoulders to see if anyone is listening,” Martinez said.
Business
Nike to Cut 1,400 Jobs as Part of Its Turnaround Plan
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
Business
Senate committee kills bill mandating insurance coverage for wildfire safe homes
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
Business
How We Cover the White House Correspondents’ Dinner
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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