Jim Cramer: Starbucks is the 'net winner' following unionization vote

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MKM Partners analyst Brett Levy wrote in a note to clients Thursday that he doesn’t think the unionizing move will have an immediate impact on Starbucks’ strategy or financial results. However, Levy said a more widespread push toward unionization could lead to additional pay hikes for workers at the chain. Levy added that Starbucks would be better positioned to absorb higher costs than its industry peers if the trend were to spread.

Unions are rare in the restaurant industry. Only 1.2% of workers at food and drinking outlets were members of unions last year, which is well below the private-sector unionization rate of 6.3%, according to the Bureau of Labor Statistics. But a tight labor market has been encouraging increased efforts to organize. This year has seen union drives by Amazon workers and strikes by John Deere’s and Kellogg’s employees. But those efforts have not always yielded victories for labor unions.

Sen. Bernie Sanders, I-Vt., congratulated Starbucks Workers United for its victory on Twitter and wrote that cafe chain should stop “pouring money into the fight against the union and negotiate a fair contract now.”


After the vote count, the ballots will need to certified by the NLRB’s regional director, which could take up to a week. For the Genesee Street’s results, the regional director will have to examine any objections or challenges, which may require a hearing to resolve. The union may also object to the results for the Camp Road cafe, citing missing ballots from the count.

Employees at stores that voted against a union can petition for another election in a year.

The next hurdle is negotiating a contract with Starbucks. Labor laws don’t require that the employer and union reach a collective bargaining agreement. On top of that, workers who lose faith in the union can petition to decertify after a year, putting a ticking clock on negotiations.

The NLRB had twice sided with Starbucks Workers United, first allowing the stores to vote as single units instead of opening up the vote to all 20 cafes in the region as Starbucks had wanted, a move that typically favors the employer. As a result, 81 workers were eligible to vote instead of 450 across the city.

Then, the NLRB this week allowed the vote count to move ahead for Thursday afternoon. Ballots were mailed in with a deadline of Wednesday evening and the count was streamed via Zoom. The union fight attracted attention from lawmakers including Sen. Chuck Schumer, D-N.Y. and Rep. Alexandria Ocasio-Cortez, D-N.Y., who expressed support for workers seeking to organize.

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