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Union Demands Financial Disclosures From Starbucks And Its High-Powered Law Firm

The union that organized nearly 400 Starbucks stores has asked regulators to demand financial disclosures from the coffee chain and its law firm related to their long-running campaign against the organizing effort.

Workers United sent a complaint to the Labor Department on Tuesday, arguing that both Starbucks and the firm, Littler Mendelson, should have to reveal details about their relationship, including how much Starbucks is paying the firm. Starbucks has deployed dozens of Littler attorneys in labor litigation across the country, part of a two-year legal effort to blunt the organizing campaign.

The union suspects Starbucks has spent a fortune on the firm’s services – and claims the law should compel both parties to divulge numbers.

“It is difficult to imagine an employer for which there is a more compelling enforcement case than Starbucks Corporation and its consultant, Littler Mendelson, to uphold the purpose for which the disclosure laws were written,” wrote a representative for Worker United, which is part of the 2 million-member Service Employees International Union.

When employers hire consultants to dissuade workers from organizing, both the employer and the consultant are supposed to disclose their arrangement to the Labor Department for the sake of transparency. Amazon, for instance, spent more than $14 million on anti-union consultants in 2022, a fact known only because of Labor Department filings.

But in general, disclosures are required only if the consultant has direct contact with workers – not if they solely provide strategy or advice to the employer.

If there aren’t penalties for this, this opens a pandora’s box for coercion and intimidation of workers.Bob Funk, director of LaborLab

That carveout usually saves management-side attorneys from having to reveal how much they’re being paid to stop a union. But Workers United argues that Littler Mendelson’s attorneys have tried to persuade workers against unionizing directly through “coercive” subpoenas, and therefore their work should be subject to the disclosure law.

Starbucks accused the union of trying to interfere with the company’s legal rights.

“The SEIU’s complaint is simply an attempt to use the Department of Labor to rewrite the rules Congress and courts have established for federal court litigation,” a company spokesperson said in an email.

If the Labor Department opens an investigation and sides with Workers United, workers and the public could end up seeing the sort of financial details that rarely come to light in campaigns against unions, including the hourly rates for the employer’s counsel.

The Labor Department agency that oversees the disclosures, the Office of Labor-Management Standards, has taken a more aggressive stance under President Joe Biden, pledging to enforce the rules to higher standards than in the past. A spokesperson for the office said it does not comment on individual complaints, but said it was “focused on exercising the full scope of its’ authority” under the law.

Labor board judges have found Starbucks violated workers' rights in dozens of cases stemming from the organizing campaign by Workers United.
Labor board judges have found Starbucks violated workers' rights in dozens of cases stemming from the organizing campaign by Workers United.

Labor board judges have found Starbucks violated workers' rights in dozens of cases stemming from the organizing campaign by Workers United.

David Rosenfeld, a California-based union attorney not involved in the matter, said he believes Workers United has a strong case for compelling the disclosures.

“Littler contacts workers directly – not by talking to them, but by sending them documents that are incredibly coercive and scary. That’s reportable activity,” he said.

Acting on behalf of Starbucks, the firm’s attorneys have issued subpoenas to the union and individual baristas in cases before the National Labor Relations Board. Administrative law judges have found that some of the requests – like communications between baristas and the media – were “overbroad” and weren’t relevant to the proceedings. 

Agency judges in two cases determined that Starbucks violated workers’ rights through the subpoenas and that the subpoenas themselves could discourage employees from organizing by creating a “chilling” effect. One wrote that the aim of one subpoena was to figure out the union’s media strategy.

Workers United argues that “Starbucks’ purpose is not to gather information for administrative or judicial proceedings; rather, it is to collect sensitive information about the organizing activity itself in order to chill union activity and gain information about employees’ protected activity.”

Since Littler Mendelson attorneys executed those subpoenas, the union says both Starbucks and the law firm should have to make financial disclosures.

A spokesperson for Littler Mendelson did not immediately respond to a request for comment on Tuesday.

Workers and the public could end up seeing the sort of financial details that rarely come to light in campaigns against unions -- including the hourly rates for the employer's counsel.

As HuffPost reported in a series of stories last year, employers rely heavily on outside consultants and attorneys to battle union campaigns, often paying more than $3,000 per day for each one. 

The disclosure law is premised on the idea that workers have a right to know who is lobbying them against unionization and how much they’re being paid. But the law is routinely flouted, with employers and consultants filing their disclosures well past the legal deadline or not at all.

Bob Funk, director of LaborLab, a non-profit watchdog of the anti-union consulting industry, said employers’ attorneys typically avoid having to make disclosures by relying on the law’s carveouts. But in this case, Funk said Littler Mendelson attorneys went too far with the subpoenas.

“I think this is an instance where they’ve gotten almost a little too cocky with what they can get away with,” Funk said. “They fired off subpoenas to scare some young underpaid workers and this may come back to bite them in the ass.”

He added, “If there aren’t penalties for this, this opens a pandora’s box for coercion and intimidation of workers who don’t have the legal resources that Starbucks the behemoth does.”

The Starbucks campaign is one of the most high-profile union organizing efforts in years. None of the Seattle coffee chain’s roughly 9,000 corporate-owned U.S. stores had union representation until Workers United started organizing in late 2021. As of early December last year, the union had won elections at 370 Starbucks stores. 

The campaign has drawn an aggressive response from Starbucks. Administrative law judges have ruled that Starbucks broke the law in dozens of cases where workers said their rights were violated. The findings include illegal retaliation, threats, firings and surveillance, as well as refusing to bargain with a union. Starbucks has disputed those findings and appealed the unfavorable decisions.

Early in the campaign, Starbucks dispatched high-level managers, including at the executive level, to areas where union organizing was afoot, including Buffalo, New York, where the campaign began. The Labor Department has launched a separate investigation to determine whether Starbucks should have made disclosures about the money it spent sending corporate officers, managers and even former CEO Howard Schultz to Buffalo.  

Funk said he’s pleased to see Biden’s Labor Department acting aggressively in such cases, saying enforcement has historically been lax.

“I think that’s changing, finally, so that the spirit of the law is enforced,” he said.

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