Sen. Bernie Sanders wasted no time opening the hearing that would allow him to grill former Starbucks CEO Howard Schultz on Wednesday. “The Senate committee on Health, Education, Labor and Pensions will come to order and let me get to the point of this hearing. Today in our country, over 60 percent of our people are living paycheck to paycheck, and millions are working for starvation wages,” he began.
Those words would have been standard fare for Sanders on the campaign trail, but they weren’t delivered to thousands of cheering fans. They were delivered directly to the recently resigned Schultz, who was there only under threat of subpoena, sipping from a Starbucks-branded thermos just a few feet from Sanders’ dais.
Over the next three and half hours, the hearing, titled “No Company is Above the Law: The Need to End Illegal Union Busting at Starbucks,” gave us some tabloid talk show–level fireworks. “Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting camping in the modern history of our country,” Sanders said. Democratic senators sparred with Schultz, while Republicans flattered him; Republican senators sparred with Democrats and called for an investigation of the National Labor Relations Board, of Bernie Sanders, of the Biden administration’s relationship to Venezuela. Schultz, meanwhile, insisted metronomically that Starbucks had broken no laws and had done nothing wrong.
Witnesses testified in the second part of the hearing, including Starbucks workers who described in excruciating detail how the company cut hours for union supporters, leading to the loss of benefits. They also detailed how the scheduling system, insufficient wages, and expensive benefits forced many Starbucks employees to work second jobs—which was all the more difficult because the company required them to be on call even when they weren’t working.
The facts in the case are actually pretty straightforward. Starbucks has recently become the national face of union busting during a period of frenzied union activity and while unions are now more favorable in the eyes of Americans than at any point in the past 50 years. Roughly 290 Starbucks stores have voted to unionize, but zero have won contracts from the company, which has fought back aggressively. More than 500 charges of unfair labor practices have been filed to the National Labor Relations Board, alleging everything from retaliatory firings to cutting hours to store closures. Starbucks has raised wages and improved benefits for nonunion workers, while nearly 200 union workers have been fired.
Earlier this month, the National Labor Relations Board found “hundreds of unfair labor practices” and “egregious and widespread misconduct demonstrating a general disregard for the employees’ fundamental rights.”
Sanders, who led the panel of 11 Democrats and 10 Republicans, pressed Schultz on the NLRB ruling. Schultz stonewalled throughout, insisting that Starbucks had not broken any laws, that he didn’t know of any retaliatory firings, and that he was forbidden by law from giving raises to the union employees. Sharon Block, the executive director of the Center for Labor and a Just Economy at Harvard Law School, said later in the hearing that there was no legal merit to Schultz’s claim about raises, especially after the Starbucks Workers union explicitly waived the right to bargain on them.
Sanders at one point even reminded Schultz that he was not allowed to “knowingly and willingly make any fraudulent statement” on the stand.
But not every member of the committee is the socialist senator from Vermont, and the panel quickly veered from contentious to fawning and back again. Sen. Bill Cassidy of Louisiana, the highest-ranking Republican on the HELP committee, followed Sanders’ opening statement by condemning the hearing, which “clearly presumes that Mr. Schultz is guilty before the allegations are fully investigated.” He called it a “smear campaign.”
More than a few times, the gallery erupted into laughter or groans. After Sanders pressed Schultz as to whether or not he was “aware that NLRB judges have ruled that Starbucks violated federal labor law over 100 times over the past 18 months, far more than any other company in America,” Sen. Rand Paul began the Republican questioning by invoking Ayn Rand.
“Ayn Rand’s Howard Roark points out the ingratitude that man has for the entrepreneur, the creator. Thousands of years ago the first man discovered how to make fire—he was probably burnt at the stake he taught the others to light,” he offered. “Many would argue we have too much food. It’s extraordinary how wealthy we are!”
Republican Mitt Romney lamented that Schultz had to be “grilled by people who have never had the opportunity to create a single job.” In a botched attempt to prove that not being in a union is better than being in one, he pointed out that nonunion employees at Starbucks were given a raise while union ones were not—one of the alleged union-busting actions that has Schultz and Co. in hot water at the NLRB.
The Republican line of inquiry only derailed further from there. Oklahoma freshman Markwayne Mullin used his allotted time to impugn his own committee chairman, Bernie Sanders. “I take offense to the chairman pointing out all CEOs are corrupt because they’re millionaires,” he bellowed at Sanders, though this was not even close to anything Sanders had said. “You and your wife have a wealth of over $8 million,” he added, criticizing Sanders because his bestselling book didn’t create any jobs.
“I think you’ve got an all-time record here,” Sanders shot back.” You’ve made more misstatements in a shorter period of time than I’ve heard. … You’re probably looking at some phony right-wing internet stuff, it’s a lie.”
“It’s all public record,” said Mullin.
“It is not public record,” replied Sanders. “You’re not telling the truth … I have never, ever said that [all CEOs are corrupt].”
“Probably not all …” demurred Mullin.
Republican Sen. Roger Marshall of Kansas used his time to litigate “rising crime,” giving Schultz the opportunity to claim that some Starbucks stores closed not in retaliation against union drives, but because of rising crime rates in “Democrat-run cities.”
The Republican witnesses fared little better. “Depicting company management as 12-foot diseased rats is dehumanizing and destructive,” star Republican witness and Heritage Foundation research fellow Rachel Greszler testified, referring to the iconic “Scabby the Rat” inflatable that unions use during labor disputes.
For a Republican Party that has continued to insist, contra all available evidence, that it is actually a workers’ party, the hearing presented a conundrum. Almost every Republican senator claimed that they “support unions” before going on to lavish praise on Schultz, groveling at his intelligence, questioning the National Labor Relations Board, and defending the multibillionaire executive against a litany of alleged lawbreaking. Numerous Republicans said it was “ironic” that they were the ones coming to Schultz’s aid, though of course there was precious little irony that the party of big business—numerous GOP senators identified themselves as fellow CEOs and business owners in the hearing—was defending one of its own.
While the hearing showcased how far Republicans have not come in their embrace of the working class, it did show how much Democrats have changed their tune on organized labor. There was some obsequious behavior on the Democrat side of the dais—Sen. John Hickenlooper of Colorado applied tongue to boot, telling Schultz “you clearly know more about economics than I will ever know.” But the majority of the questioning was unstinting toward Schultz, who had once considered running for president and was rumored to be Hillary Clinton’s pick for labor secretary.
Pennsylvania Democrat Bob Casey grilled Schultz on Starbucks’ hiring of Littler Mendelson, a notorious union-busting law firm. While Schultz mostly managed to wriggle out of giving direct answers, Casey insisted that he say whether he supports the fact that companies like Starbucks can write off the cost of retaining union-busting firms as a tax-deductible business expense. Schultz eventually answered in the affirmative: “I support the law.”
Upper Midwesterners Tina Smith and Tammy Baldwin questioned Schultz on the company’s retaliatory actions against organizers and its unwillingness to bargain in good faith, to which Schultz simply repeated again and again that they hadn’t broken the law. And Connecticut’s Chris Murphy hammered Schultz. “What do you mean when you say you abide by the law?” Did he mean to say, Murphy asked, that the judges got it wrong in every single case? “It’s akin to someone getting ticketed for speeding 100 times … saying every single time, the cop got it wrong. That would not be a believable contention,” he added.
Before the committee paused for a brief intermission, ranking member Cassidy condemned the Biden administration for canceling the Keystone XL pipeline and attacked the National Labor Relations Board. The NLRB “right now is under investigation for being biased,” Cassidy said (falsely).
“The NLRB is not under investigation for anything,” responded Sanders, and the committee took a break.
All in all, the hearing looked terrible for Starbucks and Schultz both. And while Schultz has stepped down from the CEO role, the worst may be still to come for the company. Judgments against the firm’s management for its violations of labor law continue to pile up, while national scrutiny of its practices increase. Just two weeks ago, Sens. Cory Booker and Robert Menendez, not members of the HELP committee, sent their own letter to Schultz scorching the company’s “blatant anti-union behavior.” It’s unlikely that he won any additional sympathy at the fiery hearing, beyond a handful of Republican senators.
“Do what is legal,” said Sanders, sternly, to Schultz at the end of his testimony. “Do it. Sit down in the next two weeks, come back to us and tell us the success that you’ve had in finally negotiating a first contract.”
