Starbucks’ new CEO steps in two weeks early
Starbucks has displayed "egregious and widespread misconduct" in its dealings with employees involved in efforts to unionize Buffalo, New York, stores, a National Labor Relations Board judge said in an order Wednesday.
Starbucks’ new CEO Laxman Narasimhan has taken over the reins from interim CEO Howard Schultz, about two weeks sooner than planned.
Narasimhan was named the company’s incoming CEO on October 1 of last year. Since then, he has shadowed Schultz, who stepped into the CEO role for the third (and he says final) time in April 2022. Schultz was slated to hand off to Narasimhan on April 1.
In addition to taking over as CEO, Narasimhan joined the board Monday. He will lead the company’s annual shareholder meeting on Thursday. The company pointed to the timing of the meeting to help explain the earlier-than-expected transition.
The handover is happening during a tense moment for Starbucks, as it tries to fend off a growing wave of unionization.
NLRB administrative law judge Michael Rosas recently said that Starbucks had displayed “egregious and widespread misconduct” in its dealings with employees involved in efforts to unionize Buffalo, New York, stores, including the first location to unionize. Starbucks repeatedly sent high-level executives into Buffalo-area stores in a “relentless” effort, the judge wrote, which “likely left a lasting impact as to the importance of voting against representation.”
Starbucks said in a statement at the time about Rosas’ order that it is “considering all options to obtain further legal review,” adding that “we believe the decision and the remedies ordered are inappropriate given the record in this matter.”
Despite Starbucks’ actions, nearly 300 stores have voted to unionize and have been certified by the NLRB, so far. There are about 9,300 company-operated Starbucks store in the US.
For Schultz, the issue has been personal. When he returned to lead Starbucks last year, he also led the fight against those efforts. In a recent interview with CNN’s Poppy Harlow, he said “I don’t think a union has a place in Starbucks,” adding that while Starbucks employees have workers have the right to try to unionize, “we as a company have a right also to say, we have a different vision.”
Schultz is still scheduled to testify about Starbucks’ labor practices during a hearing on March 29. He remains on the Starbucks board.
During his time as interim CEO, Schultz laid out a “reinvention” plan that would update stores and, he said, improve conditions for workers.
“As I step away, I leave you all as the stewards, in service of all of our partners,” Schultz wrote in a letter to leaders posted on the Starbucks website on Monday, using the word “partners” to refer to employees, as Starbucks does. “There are times when the responsibility for our partners, customers and communities around the world will feel heavy,” he added. “But as partners, know that you are not shouldering the responsibility alone.”
“The board wants to express our sincerest thanks to our founder, Howard Schultz, for selflessly picking up the leadership mantle when asked, Mellody Hobson, independent Starbucks Board of Directors chair, said in a statement Monday.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.