Starbucks union baristas walk out on Red Cup Day in push for contract talks

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By Juveria Tabassum and Waylon Cunningham

(Reuters) -More than 1,000 Starbucks unionized baristas in over 40 U.S. cities launched an indefinite strike on Thursday, intensifying their push for a collective bargaining agreement over increasing pay and staffing levels at the coffee giant.

The walkout will begin with 65 stores, the Starbucks Workers United said, coinciding with the Red Cup Day, a busy sales event that typically drives higher customer visits at more than 17,000 coffeehouses in the U.S.

So far, there has been minimal impact with less than 1% of stores seeing any disruption, a Starbucks spokesperson told Reuters.

The union, which represents employees at about 550 U.S. stores, plans to rally at 4 p.m. local time in more than a dozen cities and warned the strike could become the largest and longest in the history of Starbucks.

Stores in cities, including Seattle, New York, Philadelphia, Dallas, Austin and Portland, will join the work stoppage, it said. Some locations had already shut down for the day, a union spokesperson told journalists on a media call.

The union represents roughly 9,500 workers, or 4% of its cafe workforce, Starbucks has said.

NEGOTIATIONS DRAG ON

The strike comes as CEO Brian Niccol shuts hundreds of underperforming stores, including the unionized flagship Seattle location, and focuses on improving service times and in-store experience to revive demand in the U.S.

Talks between the union and the company stretched for about eight months in 2024 but broke down in December following which the workers went on strike during the key holiday period.

Niccol had said in September last year when he took over as CEO that he was committed to dialogue.

However, Lynne Fox, the union’s international president, said on a call with journalists that things changed once Niccol took office.

“A year into Niccol’s tenure, negotiations have gone backwards after months of steady progress and good faith negotiations,” Fox said.

Starbucks declined to comment on Fox’s remarks.

In April, the union voted to reject a Starbucks proposal that guaranteed annual raises of at least 2%, saying it did not offer changes to economic benefits such as healthcare, or an immediate pay hike.

“The best recourse is for Starbucks to bargain in good faith,” said Christopher Hayes, a labor historian at the Rutgers School of Management and Labor Relations.

WHAT ARE THE DEMANDS?

The union has filed more than 1,000 charges to the National Labor Relations Board for alleged unfair labor practices such as firing unionizing baristas and last week voted to authorize a strike if a contract was not finalized by November 13.

“We’re striking for a fair union contract, resolution of unfair labor practices and a better future at Starbucks,” said Dachi Spoltore, a Starbucks barista from Pittsburgh who joined the strike.

“For every one barista on strike, dozens more allies and customers have pledged to honor the picket line and not buy Starbucks while we’re on strike.”

Starbucks has said it pays an average wage of $19 an hour and offers employees who work at least 20 hours a week benefits including healthcare, parental leave and tuition for online classes at Arizona State University.

The union has said starting wages are $15.25 per hour in about 33 states and the average barista gets less than 20 hours per week.

INVESTORS KEEP A CLOSE WATCH

Both sides have blamed the other for stalling the talks, and say they are ready to return to the bargaining table.

Some investors and lawmakers over the past year have urged Starbucks to resume talks with the union and settle on a contract.

“As we quickly approach the fourth anniversary of the first stores to unionize in Buffalo, NY, it is remarkable that management has not been able to reach a first contract,” said a spokesperson for Trillium Asset Management, a long-term Starbucks shareholder.

Starbucks’ shares were down nearly 1% on Thursday.

“In absolute terms, it is a fraction of stores and, therefore, unlike the China stake sale, recent restructuring or remodeling announcements, (the strike) is not directly driving earnings estimates,” said Meredith Jensen, analyst at HSBC Securities.

“The market is weighing many factors – qualitative and quantitative – on Starbucks turnaround and widespread and highly publicized negative stories factor can’t be totally excluded from the company’s investment story.”

PAST PROTESTS

This is not the first time that the union is going on a strike on Red Cup Day, when Starbucks hands out reusable red holiday-themed cups to customers for free on coffee purchases.

In 2022, workers at about 100 U.S. stores went on a one-day strike on Red Cup Day in protest against firings and store closures that they said were illegal retaliation by Starbucks against them.

Workers at hundreds of stores also walked off their jobs on Red Cup Day in 2023, demanding improved staffing and schedules for the promotional event, which they said was one of the “most infamously hard, understaffed days.”

(Reporting by Waylon Cunningham in New York and Juveria Tabassum, Savyata Mishra and Neil J. Kanatt in Bengaluru; Editing by Vijay Kishore, Arun Koyyur and Sriraj Kalluvila)