Starbucks Plans Better Benefits For Some Workers In Bid To Discourage Unionization

Starbucks Corporation (NYSE: SBUX) is going all out to ward off store workers from unionizing, according to a Wall Street Journal report from Wednesday. This comes in the wake of concerted efforts by store workers to unionize — seeking to negotiate better wages, benefits and working conditions.

What Happened: Starbuck CEO Howard Schultz, who assumed the role on an interim basis in early April, is contemplating an expanded employee benefits package that would help to hire and retain baristas. The CEO reportedly communicated the move to the company's U.S. store leaders in an online forum.

This pro-worker move comes with the caveat that the expanded benefits package, when implemented, will not be extended to workers in stores that have voted to unionize, the Journal noted.

"Federal law requires separately negotiated contracts for union-represented workers' pay and benefits, and the company can't change their compensation unilaterally, Schultz reportedly said, citing the company's legal counsel.

Schultz, who is returning at the helm of the coffee retail chain for the third time, said the expanded benefits will likely help attrition among workers.

Related Link: Starbucks Stock Buzzes Higher Following Upgrade, CEO Change: Here's How Some Traders Predicted The Spike

Why It's Important: Unionization drive intensified at Starbucks since late last year, with about 200 of its 9,000 U.S. corporate stores having petitioned for union elections, WSJ noted. The National Labor Relations Board has reportedly certified unions at eight Starbucks locations.

When workers at the Buffalo, New York cafes voted to unionize late last year, the company had said unionization would disrupt its relationship with its workers.

"It goes against having that direct relationship with our partners that has served us so well for decades and allowed us to build this great company," Kevin Johnson, who was Starbucks CEO at the time, had said.

Price Action: Starbucks closed Wednesday's session up 1.42% to $80.92, according to data from Benzinga Pro.

Related Link: Starbucks To Enter NFT Business This Year, CEO Touts 'Heritage' Advantage