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Starbucks CEO Steps Down Ahead of Senate Committee Testimony on Alleged Union Busting

'Everything you need to know resides inside of each of you,' Starbucks founder Howard Shultz told employees

The founder and interim Chief Executive Officer of Starbucks has resigned just two weeks after agreeing to testify before the Senate Health, Education, Labor and Pensions Committee.

Howard Schultz was facing a possible subpoena from the committee, which is evaluating the coffee chain’s efforts to stop union organizing among its workers. 

“I am entrusting you all with Starbucks – something that holds a place in my heart second only to that of my beloved family,” Schultz wrote in a message to employees on March 20. He added that his letter did not contain advice as “everything you need to know resides inside of each of you.”

Schultz took over as interim CEO in 2022 after Kevin Johnson announced he would leave the company after 13 years. Johnson held the position of CEO for five years.

Schultz had previously served as CEO from 1987 to 2000. He grew the company from 11 stores with 100 employees to a global enterprise with 28,000 locations. During his second time as CEO, Schultz regarded his role as largely serving as a volunteer and collected a salary of $1. 

“Starbucks truly has been my life’s work – but more than that, it’s always been about the lives of the millions of partners over the years who have proudly worn the green apron and it’s about the hundreds of thousands more who will join Starbucks in the years to come,” he wrote. “As I turn Starbucks over to you now, know that you have my utmost confidence, trust and love. You all are the future of Starbucks. The world needs Starbucks – and Starbucks needs all of you.”

Starbucks had said through a spokesperson that Shultz was “not the right witness for the hearing” and noted that he would “cease to be the interim CEO of the company this month.”

The company also stressed Shultz had “assumed the interim CEO role nine months after the issues regarding unions arose and has been focused on the reinvention plan of Starbucks since that time.”

“We are shocked and deeply concerned that the Chairman has found AJ Jones II, our executive vice president and chief communications and public affairs officer, unqualified to testify before the Committee despite being exceedingly well-versed on these issues,” said the letter dated March 2. “Mr. Jones has been directly involved in the matters involving Starbucks’ management relations, the National Labor Relations Act, and other relevant labor and employment issues the Chairman seeks to better understand.”

The company notes Jones has worked for Majority Whip James Clyburn as a policy director and had previously met with Senator Bernie Sanders’ staff in February. 

“Given his extensive involvement on these issues as a senior executive officer in the company and his accomplished background, we fail to understand why Mr. Jones is not being permitted to offer testimony on these issues,” wrote Zabrina Jenkins, the company’s acting executive vice president and general counsel. 

The company added that Schultz “has delegated decision-making regarding actions to be taken on union issues to a small team of executives which includes Mr. Jones.”

A grassroots effort to unionize that kicked off at a Starbucks in Buffalo, New York in 2021 steadily spread to 225 of the company’s 9,000 American locations. The National Labor Relations Board accused Starbucks in court of conducting a “virulent, widespread and well-orchestrated” anti-union campaign and of threatening, firing and surveilling workers involved in the movement. 

Democratic senators who once praised Schultz as a ‘pathbreaking’ and humane leader were now castigating him for undermining his workers’ rights,” reported The Washington Post

The Senate Health, Education, Labor and Pensions Committee is chaired by Senator Bernie Sanders of Vermont. Louisiana Senator Bill Cassidy, a Republican, serves as the ranking member. 

In a January letter to Schultz, Sanders demanded Starbucks “once and for all end its egregious union busting campaign against its own workers in stores across the country.”

“Mr. Schultz, my request to you is simple: Obey the law. Sit down with your workers and bargain in good faith,” Sanders wrote. “Agree to a first contract that is fair and just. Stop shutting down pro-union shops and reinstate workers who have been fired for union organizing.”

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