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Howard Schultz, The Ceo Of Starbucks, Consents To Participate At A Senate Hearing Following A Subpoena Threat

By Anastasia Vasquez on
Howard Schultz
David Ryder | Reuters
  • Due to pressure from Sen. Bernie Sanders, Starbucks CEO Howard Schultz has agreed to testify in a Senate hearing regarding the company's alleged violation of labor laws.
  • Schultz will now show up for a hearing on March 29.
  • Starbucks has reacted more forcefully to a union drive at its cafés since Schultz took over the company's leadership in April of last year.

Due to pressure from Sen. Bernie Sanders, Starbucks CEO Howard Schultz has agreed to testify in a Senate hearing regarding the company's alleged violation of labor laws.

The Health, Education, Labor and Pensions, or HELP, Committee of the Senate was expected to vote on whether to subpoena Schultz, who had previously turned down a request to attend, on Wednesday morning. The committee's chair is Sanders, a democratic socialist who represents Vermont.

Schultz will now show up for a hearing on March 29.

Starbucks stated in a statement that it would "aim to promote a better understanding" of its partner-first culture and values through the agreement signed today, as well as its long-standing dedication to fostering the success of all partners.

Starbucks' general counsel stated in a letter seen by CNBC in February that it would make more sense for another senior leader with ongoing responsibilities to testify at the hearing, which was initially scheduled for March 9. This is because Schultz will be leaving his position as interim CEO in March. In April, a newcomer named Laxman Narasimhan is expected to become CEO.

It is evident to everyone that Mr. Schultz is the one who determines the policy of that corporation, Sanders said during a news conference on Tuesday. "[Schultz] will remain on the board, he is the CEO today, and he would be the CEO when we invited him," Sanders said.

Data from the National Labor Relations Board show that as of Tuesday, 290 Starbucks stores have approved unionization. After winning its first election more than a year ago, Starbucks Workers United has yet to reach a contract with any of the cafés.

Since Schultz returned to the helm of the firm in April last year, Starbucks has taken a more active strategy in its opposition to the union push. The NLRB has received more than 500 complaints from the union alleging unfair labor practices, including store closings and retaliatory firings. For non-union employees, the corporation also increased salaries and enhanced benefits.

More than 100 of Starbucks' own complaints have been made against the union, including harassment and intimidation.

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