For our new Rumor Has It series, we will be delving into controversies and scandals involving some household names. Even the largest chains can’t escape the scrutiny of the public eye.

Starbucks is home to America’s favorite cup of coffee, yet they have been brewing something else as of late. The company has drawn attention due to multiple labor violations and attempts at union busting. Unionization has gained traction in the restaurant industry, and it comes as no surprise that the world’s largest coffee restaurants would be one of the first dominos to fall. What is shocking, is how blatantly the company attempted to stop this process and how public the fiasco has become.

Unions have been a major part of the American labor system since the first was formed back in 1794 by shoemakers in Philadelphia. The National Labor Union was later established in 1866. Despite the widespread use of unions, retail and restaurant employees are not traditionally unionized. Knowing that, it came as quite a surprise in December of 2021 when workers from a Buffalo, NY, location became the first Starbucks employees to unionize. The company was opposed to the idea and made efforts to deter employees and prevent the vote from taking place. Initially these efforts were legal as they informed employees that they didn’t need to organize to secure better working conditions. They also argued that all 20 stores in Buffalo should vote together in the union election instead of each store individually. Federal Labor officials disagreed with this and allowed each store to vote individually which led to one store unionizing and two others failing to do so.

The problems began when employees filed a federal labor charge that claimed Starbucks was threatening and intimidating those who were attempting to organize. These tactics were unsuccessful, and the idea began to spread. It became clear that while unionizing a Starbucks location would be difficult, it could work. Other stores across the U.S. held successful votes and Starbucks ramped up their efforts. They began closing unionized stores and fired employees that were organizing votes. Starbucks denied that these firings and store closing were at all related. They made various claims that the closed stores were underperforming and that the employees were part of normal turnover. These claims were suspicious, and they didn’t hold up.

Earlier this year multiple judges, including one for the National Labor Relations Board, ruled that Starbucks had committed hundreds of labor violations. The NLRB judge determined that the company threatened, spied on, and enforced stringent policies on any employee who supported unionization. Starbucks was ordered to reinstate seven fired employees and provide financial restitution for 27 others who were involved in the process. They were also ordered to reopen a location that was closed due to union activity and post a notice listing their labor violations at all U.S. locations. Interim CEO Howard Schultz, who stepped down recently, has agreed to testify before a U.S. Senate committee regarding Starbucks actions against this topic.

Other restaurants are beginning to unionize, and Starbucks has laid the blueprint for what not to do. It seems clear that these rulings were used to make an example and to deter other companies from similar attempts at union busting. However, we have already seen other restaurants push back on this and this will not be the last landmark ruling we hear about. Labor is an ongoing issue for foodservice and the potential spread will leave major chains with interesting choices to make. This scandal will not sink Starbucks, they are too large financially, though it could give them pause when planning out future expansions.