'Top Employer' Starbucks Has a Crack in Its Image
By David Segal
Washington Post Staff Writer
Thursday, April 12, 2007; C01
Four years ago, when he first donned a green apron at the Starbucks at Madison Avenue and 36th Street, Daniel Gross must have looked like any other scruffy college grad in need of a paycheck and a shave. Within a few months, though, it was clear that this Los Angeles native with the perpetual stubble was something very different: the Norma Rae of the Caramel Macchiato.
Soon after he started, Gross and some fellow baristas began to meet at each other's homes to gripe about their jobs. The pace was exhausting, the store chronically understaffed and, under Starbucks's "flexible" scheduling rules, the number of hours they worked could change week to week, leaving them unsure of how much they would earn.
Gross didn't look for a different employer. He climbed on the espresso bar waving a placard that read "UNION" -- metaphorically speaking.
Today, the Starbucks Workers Union, such as it is, is affiliated with the Industrial Workers of the World and claims a "critical mass" of members at nine stores in four states, including a store in Rockville, Md. The group won't release membership numbers, but given that Starbucks has 9,401 stores in the United States and more than 128,000 "partners," as employees are known, we're not exactly talking about a massive groundswell. And to the extent that any union campaign is also a public relations battle, the fight has yet to put even a ding in Starbucks's corporate halo.
Sure, consumers chafe at the prices and the annoying argot of "venti," "grande" and "tall." Yes, others lament the way these drearily standardized outlets have become our national cafe. (Check out the variety and style of coffee culture in Europe and have a good cry.) We cut the company some slack, though, because we're addicted to the coffee and because the Seattle-based giant appears to take a reasoned, benevolent approach to everything from its staff to its Fair Trade-certified beans. Even the bottled water -- it's called Ethos -- seems enlightened.
But Gross, now a 28-year-old, third-year law student at Fordham, says that Starbucks's retail-megachain-with-a-soul image is largely a sham.
"Apparently it's true that if you repeat a lie enough times, it will resonate," he says one recent afternoon in a cafeteria at Fordham. "In my opinion, when it comes to its message about its employees, this company has the greatest PR machine in the business."
That PR machine, at least as it was represented on the phone, is a very polite and patient woman named Valerie O'Neil. "We respect the right of our partners to organize," she explains, adding that 86 percent of Starbucks workers described themselves in a survey as "very satisfied" with their jobs. If the idea of a union has failed to catch on, in her account, it's because few people at Starbucks are interested in joining.
Gross has a different theory about why his team has not yet achieved its goals, described on its Web site as better pay, guaranteed hours, an end to understaffing and a safer workplace. It's because, he says, Starbucks is actively -- and at times illegally -- thwarting them.
He cites the National Labor Relations Board, which has accused Starbucks of fighting dirty against the SWU by using bribery, interrogations and threats of retaliation. Most recently, it ruled on March 30 that Starbucks broke the law 30 times as it tried to push back against Gross and his fellow travelers. The company was accused of threatening to fire baristas who support the cause.
Starbucks denies all the accusations and plans to challenge them in court, including a claim that Starbucks illegally fired two workers -- one of them Daniel Gross. A picket to protest those firings, and raise the profile of the cause, took place last night at Dupont Circle, at the store at 1501 Connecticut Ave. NW.
"They said I threatened a district manager," says Gross, guffawing at the memory. This was in July of last year. "We were on a picket line, outside of a store, for a guy named Evan, whom they'd threatened to fire. And this manager came by and I said, 'Don't fire Evan, that would be a mistake, that would be a mistaken decision.' " A few weeks later, after what was described as an internal investigation, a Starbucks manager showed Gross the door. He took his sweet time walking through it, Gross recalls, shaking hands with co-workers and formally saying goodbye.
"I think they correctly perceived," he says of Starbucks executives, "that they hadn't seen the last of me."
The home of the cinnamon dolce latte seems an improbable hothouse for a workers' revolution. So it is with any fast-food shop. Workers in that sector don't generally expect a career there. Who cares what your third-year wage increase will be if you plan to stick around for only six months?
Still, Starbucks, of all places -- it regularly shows up in Fortune's list of "100 Top Employers to Work For" issue, and it claims to spend more on health care for employees than on coffee. Chairman Howard Schultz trumpets the company's values whenever he turns up on TV, which is often.
"We want to lead with our heart, we want to do the right thing," he told Charlie Rose in a recent interview.
In Gross's opinion, this is Starbucks at its self-mythologizing worst. He offered his considerably dimmer view of the company last week during a sort of insider's tour of a store. He hadn't set foot in a Starbucks in a while, largely because the IWW is boycotting the place. But he didn't buy anything. He just watched and critiqued. At one point, "Mambo Italiano" by Rosemary Clooney played in the store.
"Oh my God, that song," Gross moaned, like a man who'd heard it 7,000 times. "I thought they'd gotten rid of it."
Gross has the intensity of a true believer, leavened by an almost nonstop, toothy smile. He was uneasy enough being the focus of this story to refuse to be photographed without other union members in the shot, and he declined to say much about his upbringing, except that his grandfather drove a liquor truck in the Bronx and was in the Teamsters union.
"His pension allowed him to live his final years with dignity," Gross says. "Look at my generation. Millions of people in the service industry, a part of the economy untouched by the labor movement."
He leaned against the wall with all the espresso machines. "The key in retail is absolute control over the employee," he went on. "They've got rules for everything. The iced teas get 10 shakes. Not nine. Not eight. Before you hand it to the customer, 10 shakes. They're terrified a union will come in and say 'Nine shakes is enough.' "
Gross and others announced in 2004 their intention to unionize through the IWW, an organization known for militancy during its heyday in the '20s. This might seem an unlikely choice -- the union is tiny these days -- but the Wobblies, as they're known, allowed Gross and his comrades to negotiate directly with Starbucks, and didn't require certification votes at each store that would bestow upon the group official status in the eyes of the company.
The company has never considered any of the nine stores in question to be actual union shops. Official or not, though, Starbucks seemed eager to stop this union concept before it gained momentum. Its efforts led to litigation, which in 2006 culminated with the company signing a consent decree in which it promised it wouldn't threaten union supporters with negative performance reviews or transfers to other stores. Nor would it create the impression that "union activities are under surveillance."
Given this saga, and the more recent NLRB findings, Gross says that what bothers him most is the gap between what the company is and what everyone believes it to be. Case in point: It's Starbucks policy to offer health-care coverage to any employee who puts in at least 240 hours per quarter. Sounds great. But just 42 percent of employees are covered through the company, according to figures provided by Starbucks. Wal-Mart actually does better -- it covers 46 percent of its employees.
One reason that Starbucks insures fewer employees than Wal-Mart, Gross says, is because it lags the Bentonville behemoth in one other surprising area. Wal-Mart has taken a lot of grief for allegedly trying to boost the percentage of its workforce in part-time positions -- a move that reduces benefits costs. It'll never catch Starbucks. One hundred percent of its baristas -- and shift supervisors, too -- are part-timers.
O'Neil, the Starbucks spokeswoman, says the "part-time" designation is a matter of semantics as far as the workers are concerned, since it doesn't affect hourly wages -- you work a 40-hour week, you get paid for 40 hours, regardless of what you're called. As for the health-care issue, she said that many employees declined coverage because they're in a parent's or spouse's plan or -- here it comes -- they're covered by a second job. The more important figure, she argued, is 91 percent, which is the portion of employees covered, one way or another. That includes Medicaid, the federal insurance program for poor people.
Members of the SWU contend that requiring all baristas to work part time not only keeps down the company health care costs, it hands vast leverage to managers, who can punish those who complain by scheduling them for fewer hours. They also say that working too many hours is high on the company's list of no-nos.
"I once worked 43 hours in a week," says Seth Deitz, a union member in the Rockville store, "and my boss disciplined me. She was like, 'Don't do that again.' "
Ben Reinhart was dismissed from his barista gig at a Gaithersburg Starbucks about five years ago. Today he works for a construction company, but joined the tiny protest at Dupont Circle last evening.
"You couldn't get any kind of strict schedule," he recalled of his time at Starbucks. "You had to compete with fellow workers for hours, and this led to a horrible environment."
The all-part-time barista force might, in fact, be one of the secrets to Starbucks's success, but for reasons that the SWU doesn't talk much about. In interviews with about 20 employees, most said they were quite pleased with their jobs, and one guy crowed about the health-care benefits, which cost him $36 a month. (The majority of baristas wouldn't talk; the company instructs employees not to speak to the media.) Most made about $9 an hour.
Either because the wages are so low or because a full-time position isn't in the cards, nobody who spoke said they intend a career behind the steam nozzle.
When grievances were voiced, they were not exactly the kind that send workers to the ramparts.
"I hate this apron," said a woman who declined to give her name. "I like wearing nice stuff."
Maybe low expectations are exactly what a Starbucks employee ought to have. Perhaps the point of a job there, as at any quick-service franchise, is to offer people an entry-level rung on the employment ladder, or a stopgap measure while studying for a graduate degree. There may be very few people who look at the Frappuccino blender the way that Gross's grandfather looked at his truck.
Gross is unmoved. "This is the direction the economy is heading," he says with a shrug. And it's a part of the economy he intends to rejoin. Once a lawyer, he plans to work for a public interest law firm. But one of his many goals is to force Starbucks to put him back on the payroll. So if all goes according to plan, in a few months Gross will be a rather exotic specimen in the labor market -- a barista with a law degree.
"They fired me illegally," he said, smiling but totally serious, "and I want my job back."