Starbucks union rejects company’s proposal for 2% annual raise guarantee

By Josh Eidelson and Daniela Sirtori | Bloomberg

Starbucks union delegates voted to reject the company’s latest contract proposal, which organizers say falls short by only guaranteeing annual raises of at least 2%.

About 500 baristas representing Starbucks’ 550-plus unionized US stores voted this week on the company’s latest contract offer, according to the union Workers United. Of those delegates, 81% rejected the proposal, 14% voted to accept it and the rest abstained.

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While the two sides have reached tentative agreements on dozens of contract issues, including workplace safety, dress code and attendance policy, the union said the offer lacks guarantees on how many hours of work employees get per week while also failing to boost healthcare benefits or include an immediate pay bump.

“Union baristas are asking Starbucks to invest in our wages and benefits, which can be done in a number of ways, and that fundamentally means putting more money into the contract,” union delegate Michelle Eisen said in a statement from Workers United. She added the union “has presented a variety of ideas for how to get to an overall increase in pay, benefits, and hours for union baristas, but we have not seen a commitment from Starbucks to negotiate in good faith over those ideas and options.”

In an emailed statement, Starbucks said the union presented delegates with “an incomplete framework” to vote on, “effectively undermining our collective progress.” The company said its baristas’ pay averages over $19 an hour, and that their compensation is worth over $30 when benefits are counted.

“Starbucks remains optimistic that, through productive compromise and respectful dialogue, we can finalize a contract that is fair and equitable,” the company said. “A strong and successful Starbucks is in the interest of every partner.”

The company said some benefits the union says are lacking in its proposal are still being discussed, and that 2% is just a minimum floor for how much pay could go up each year.

The union and Starbucks have been meeting over the past year to try to hammer out a template for collective bargaining agreements at the locations that Workers United has organized since 2021. After years of conflict, the two sides announced in February 2024 that they had agreed to work together to resolve their differences. But talks broke down late last year over the issue of pay, and Workers United has resumed staging strikes and filing federal labor board complaints, alleging the company wasn’t negotiating fairly.

Starbucks and the union in January agreed to use a mediator to move the talks along. That started in February and is ongoing, according to the union. The 2% guaranteed annual wage hike represents an increase from Starbucks’ December offer of 1.5%, the union said.

Starbucks is undergoing a turnaround effort led by new Chief Executive Officer Brian Niccol, who joined the company in September to reverse a sales slump.

“Brian Niccol says he wants to turn the company around, and if that’s true, his first priority should be finalizing fair contracts with the 11,000 union baristas and growing who are committed to building a better Starbucks,” union delegate Jasmine Leli said in the statement.