Starbucks must disclose spending on response to union campaign, judge rules

By Daniel Wiessner

(Reuters) - Starbucks Corp must provide U.S. regulators with documents detailing its spending on efforts to discuss unionizing with workers, part of the agency's probe into whether the coffee chain violated financial disclosure laws, a federal judge has ruled.

The decision, which the U.S. Labor Department announced on Friday, requires Starbucks to document travel expenses it paid to send former CEO Howard Schultz and other company officers to Buffalo, New York in 2021 after workers there filed a petition to hold a union election.

The Labor Department subpoenaed the information as part of its investigation into whether Starbucks should have disclosed expenses related to the trip and bonuses paid to the company officers. Federal law requires employers to report expenses aimed at discouraging organizing and union membership.

A Buffalo Starbucks in December 2021 became the first in the company's history to unionize, and workers at more than 360 U.S. locations have followed suit.

Starbucks and Schultz have faced allegations of widespread illegal union-busting from workers, labor groups and Democratic lawmakers. The company has denied the claims and is defending itself against scores of complaints before the National Labor Relations Board (NLRB), which is separate from the Labor Department.

Last week, the NLRB said Starbucks must turn over a document dubbed the "petition store playbook" outlining how the company would respond to worker petitions for union elections. NLRB lawyers requested the document in a case involving organizing at a Connecticut store.

In the ruling issued Wednesday, U.S. District Judge Marsha Pechman in Seattle also ordered the coffee chain to provide records of its expenses to create and maintain a website providing information about union organizing.

Starbucks in a statement said it had not been accused of wrongdoing by the Labor Department, and would "continue to engage with government officials to provide clarifying information on our compliance with decades of labor law."

Jeff Freund, director of the Labor Department office that enforces the reporting law, said the judge's ruling will help the agency determine whether Starbucks was required to report expenses related to the trip to Buffalo and the website.

The department served the subpoena on Starbucks earlier this year and filed a court petition in May after the company objected.

Starbucks had argued that the disclosure law did not require reporting of payments to its own employees involved in responding to union campaigns.

The company said the Labor Department had never previously required that information, and that it was illegal for the agency to reverse course without adopting a formal rule.

Pechman in her ruling said Starbucks could raise those arguments as defenses if the Labor Department accuses the company of violating the disclosure law, but not in an attempt to toss out the subpoena.

(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and David Gregorio)