(NEW YORK) — A group of oil-producing nations imposed a significant cut in oil output with far-reaching consequences for U.S. gas prices, industry analysts told ABC News.
The alliance of countries known as OPEC+, led by Saudi Arabia and Russia, agreed on Sunday to cut oil output by 1.2 million barrels per day starting in May, which amounts to removing roughly 1% of oil from the global market.
Regardless of the production cut, prices typically rise in the summer due to a spike in demand as car owners take road trips and families fly to vacation destinations.
The OPEC+ output decision, however, will send gas prices as much as 30 cents higher per gallon than they would have spiked otherwise, the analysts said.
“I certainly think there’s going to be upward pressure on prices as a result of these production cuts,” Patrick de Haan, the head of petroleum analysis at GasBuddy, told ABC News.
The announcement from OPEC+ met disapproval from the Biden administration.
“We don’t think that production cuts are advisable at this moment, given market uncertainty, and we’ve made that clear,” White House Spokesman John Kirby said on Monday.
The production cut coincides with an ongoing rise in gas prices. The national average price for a gallon of gas stands at $3.50, which marks a 2% increase over the past week and 3% spike over the past month, AAA data showed.
In California, the state with the highest gas prices, the average price per gallon is $4.83, according to AAA.
Average gas prices nationwide remain nearly 20% lower than where they stood a year ago.
Despite the anticipated rise in gas prices as a result of the OPEC+ production cut, analysts do not expect gas prices to reach the eye-popping levels on display last summer.
“People are waving their hands and feel like their hair is on fire: What does this mean for the U.S. consumer?” Peter McNally, a global sector leader for industrial materials and energy at Third Bridge, told ABC News about the production cut.
“Year over year, we’re still looking at lower prices,” he added.
McNally said he expects U.S. gas prices to rise between 20 and 30 cents in additional cost as a direct result of the production cut; while de Haan, of GasBuddy, said he anticipates a more modest increase of between 5 and 15 cents.
The OPEC+ production cut announced on Sunday follows a previous cut in October that saw the group of oil-producing countries slash output by 2 million barrels per day.
The latest production cut will prove more impactful because it coincides with heightened demand in the summer season, as opposed to the previous cut that took place during the annual drop in gas prices that occurs in the fall, McNally said.
To be sure, the exact price implications of the Sunday announcement remain murky, analysts said.
As the financial system teeters and the Federal Reserve raises interest rates, a possible global economic slowdown could weaken oil demand and limit the upward effect on gas prices, some analysts said.
In fact, indicators of a coming recession likely contributed to the recent decision from OPEC+, since the group wants to avoid a potential oversupply of oil that could accompany a downturn, Timothy Fitzgerald, a professor of business economics at Texas Tech University, told ABC News.
“They’re making what may effectively be a preemptive cut anticipating weaker economic conditions coming during the rest of this calendar year and trying to balance their production with what they perceive the demand will be,” Fitzgerald said.
However, potential decline in oil consumption from a recession could be more than offset by a bounce back in Chinese economic activity, McNally said, noting that the country consumed 200 million fewer barrels than expected last year amid coronavirus lockdowns.
“The big wildcard is China,” McNally said. “If China does finally come out of this COVID funk, it’ll use an awful lot of oil.”
(NEW YORK) — The Laundress is recalling hundreds of thousands of laundry products four months after issuing a separate recall of millions of laundry detergent and cleaning products.
On Friday, the company announced it was issuing a voluntary recall of about 800,000 of its fabric conditioners, which are billed as products that help “eliminate static and soften fabric,” according to a description on The Laundress website.
According to The Laundress, the products may contain ethylene oxide, a chemical impurity and a known carcinogen that both the company and the Consumer Product Safety Commission, which posted a recall announcement for the products on March 31, say “can cause adverse health effects if there is significant and direct long-term exposure.”
“All fabric conditioners included in this recall notice were already covered by our previous market actions in December 2022,” the company added in a statement.
Carcinogens are substances that can cause cancer and exposure to ethylene oxide specifically can lead to headaches, diarrhea, vomiting, sleepiness, eye and skin burns and breathing difficulties, among other symptoms. Long-term exposure to ethylene oxide has been associated with cancer, according to the National Institute for Occupational Safety and Health Administration.
According to the National Cancer Institute, “Lymphoma and leukemia are the cancers most frequently reported to be associated with occupational exposure to ethylene oxide,” and “stomach and breast cancers may also be associated with ethylene oxide exposure.”
The Laundress shared the March 31 recall notice across its various social media platforms and on its company website. In its latest announcement, the company expressed regret at the latest recall and said it was working to rectify its processes.
“We again deeply apologize for this situation and look forward to returning soon with a renewed commitment to the highest standards of product safety and quality,” The Laundress said in a statement.
The CPSC and The Laundress recommend that anyone with recalled fabric conditioners stop using the product immediately. Consumers are advised to contact The Laundress for a full refund and then close the container without emptying it and discard it in the trash. There have been no reports of injuries or incidents related to the fabric conditioner recall so far.
Recalled products retailed anywhere between $1 and $20 and were sold over the last decade between 2011 and November 2022, according to the CPSC. They were available both in major stores like Target and through online retailers including Amazon.com and The Laundress website in the U.S. and Canada.
The Laundress notes that consumers who previously requested a refund of Laundress fabric conditioners as part of their December 2022 recall need not file a new refund request. To contact The Laundress, consumers can email customerservice@thelaundress.com or call 800-681-1915 from 9 a.m. to 5 p.m. ET on weekdays.
A full list of The Laundress’ recalled products can be found at TheLaundressRecall.com.
(NEW YORK) — Starting April 1, Twitter users who don’t subscribe to Twitter Blue are going to have to say goodbye to their blue check marks.
Recent changes implemented under Elon Musk, the company’s CEO, mean anyone who subscribes to Twitter Blue gets a blue “check” icon next to their profile. But that wasn’t always the case.
Twitter’s check marks were originally intended to verify the authenticity of prominent accounts. “Blue Checks” appear next to the names of many high-profile celebrities, politicians, journalists, activists and organizations.
“This is a person that the powers that be at Twitter decided is important in some way,” Amanda Silberling, a senior culture reporter at TechCrunch, said about the original check mark status.
In addition to cutting down on scam accounts, Silberling told ABC Audio the checks came to convey a sense of legitimacy on the platform.
“I think in some ways it is a status symbol,” said Silberling. “I was very excited when I got my blue check … people are noticing what I’m doing as a journalist, that makes me feel good.”
Hear ABC Audio’s Mike Dobuski report:
Following a revamp of Twitter Blue last year, now any user who pays a monthly subscription fee automatically gets a check mark – regardless of the relevancy of the account. For months now, new Twitter Blue subscribers enjoyed verified status alongside the “legacy” blue check accounts. But starting in April, the company said any existing blue check accounts that don’t subscribe to Twitter Blue will have to pay up – or lose the check.
“Starting April 1, 2023, we’ll begin winding down our legacy verification program,” reads Twitter’s help page. It goes on to detail the process by which users can receive a blue check. Accounts must be older than 30 days, for example. They also “may not impersonate individuals, groups or organizations to mislead, confuse or deceive others, nor use a fake identity in a manner that disrupts the experience of others on Twitter.”
Musk said charging for verification is part of an attempt to cut down on automated spam accounts, known as “bots.” In a recent tweet, Musk wrote that “paid account social media will be the only social media that matters.”
At the same time, Twitter has rolled out additional gray and gold check marks, intended to verify government and business accounts. The official White House Twitter account, for example, currently displays a gray check mark. ABC News, meanwhile, has a gold check.
But Silberling says tying blue checks to payment still leaves the door open to impersonation and misinformation on the platform.
“The blue check is essentially just going to lose its meaning,” she said, adding that users now bear more responsibility in determining which accounts are real on the platform.
“It’s always a good thing if social media users are aware of what they’re reading, and is it true,” said Silberling. “But also part of the job of social media platforms is to make it more difficult for misinformation to circulate, and I don’t think that Twitter is doing a great job of that right now.”
(NEW YORK) — Encircled by camera-wielding supporters and journalists, Chris Smalls popped a bottle of champagne one year ago today to celebrate a watershed election that established the first-ever U.S. union at Amazon — but the celebratory times for the union wouldn’t last.
Smalls, a former warehouse worker at the company’s facility in Staten Island, New York, and the president of the Amazon Labor Union, or ALU, launched the campaign alongside his co-workers, raising money on GoFundMe as they sought improved pay, benefits and working conditions at the facility.
The independent union overcame well-resourced opposition from the company and helped propel a surge of labor organizing across the country, some experts said.
However, the ALU encountered difficulties almost immediately. In the months following the victory, labor campaigns were defeated overwhelmingly in elections at two other Amazon warehouses in New York.
Meanwhile, sharp divisions emerged within the ALU, according to interviews with four current and former workers at the Staten Island facility.
Amazon has also mounted an ongoing legal challenge against the results of the union election, leaving the labor organization far from signing a collective bargaining agreement that it hopes will deliver a base pay of $30 per hour and other improvements at the facility.
The New York Times first reported on the divisions within the ALU.
“No matter how it ends, this was a significant moment,” Joshua Freeman, a professor emeritus of labor history at Queens College at the City University of New York. “It contributed to a wave of union organization efforts all over the country.”
“Obviously, there have been a lot of bumps in the road since a year ago,” Freeman added.
In a statement to ABC News, Amazon Spokesperson Eileen Hards said the company respects workers’ right to unionize but it contests the results of the election last year at the Staten Island warehouse, also known as JFK8.
“Our employees have the choice of whether or not to join a union,” Hards said. “They always have.”
“We strongly disagree with the outcome, and as we showed throughout the JFK8 Objections Hearing with dozens of witnesses and hundreds of pages of documents, both the NLRB and the ALU improperly influenced the outcome of the election and we don’t believe it represents what the majority of our team wants,” she added.
“They appeal everything and we continue to fight that legal battle,” Smalls told ABC News about Amazon’s ongoing challenges to the union vote. “It’s been ruling in our favor and we don’t see it reversing the other way.”
The headline-grabbing union victory at Amazon last April accelerated an upsurge of labor organizing that took hold nationwide during the pandemic, as a tight job market and sky-high prices helped fuel activism among workers at high-profile companies like Starbucks and Apple.
Over a yearlong period ending in September, petitions for union representation jumped 53%, NLRB data showed. Moreover, last year labor unions reached their highest level of public support across the U.S. since 1965, a Gallup poll showed.
“Amazon workers took the brave step to unionize a year ago,” said Seth Goldstein, a partner at Julien, Mirer, Singla, & Goldstein who represents the ALU. “No one thought that was possible.”
After the union victory, however, Amazon filed objections with the National Labor Relations Board seeking to overturn the outcome, including allegations that NLRB officials showed a favorable bias toward the workers and that union leaders bribed colleagues in an effort to win their support.
“Amazon’s abuse of the legal process is simply a stalling tactic that is meant to delay our negotiations and cause workers to lose faith in the process,” the ALU said about the allegations in September.
So far, those legal challenges by Amazon have failed. In September, a hearing officer for the NLRB recommended that the vote should stand. A few months later, in January, the NLRB officially certified the ALU, putting Amazon under a legal obligation to bargain in good faith. Amazon appealed the ruling.
Goldstein said he is confident the ALU will ultimately overcome the legal challenge. However, the court battle has delayed the start of negotiations on a collective bargaining agreement between workers and management. And even after negotiations begin, the back-and-forth could stretch on for more than a year before a contract is signed, he added.
“We all knew that this would unfortunately get bogged down,” he said. “I’m not surprised — I’m saddened.”
Such delay is typical for a first union contract, but it can fray labor solidarity, some experts said. The average length of time before a new union signs its first contract is 409 days, according to a Bloomberg Law analysis in 2021.
“It’s hard to keep a group together if you’re not improving their lives in a concrete way,” said Freeman, of the City University of New York. “You can do it for a while but at some point people roll their eyes.”
While the ALU fights Amazon in court, the union also aims to put pressure on the company through organizing within the Staten Island facility and building support among workers at other warehouses as well as leaders within the wider labor movement, Goldstein said.
However, the visible presence of union support within the Staten Island warehouse has diminished significantly since the victory last year, according to three longtime workers at the facility.
“Right after the election, there were about a dozen people I saw on the first floor wearing ALU t-shirts and yellow ‘organizer’ vests,” Natalie Monarrez, a worker who considers herself pro-union and initially organized with the ALU but ultimately voted against unionization due to concerns regarding its leadership, told ABC News.
“In the past few months, I haven’t seen any ALU t-shirts or yellow vests,” she added.
Smalls, who has traveled nationwide over the past year to speaking engagements and meetings with Amazon workers at other warehouses, has received criticism from some union activists over a perceived lack of focus on organizing within the Staten Island facility, he said.
“Whenever I’m in town, I meet with workers. I can’t organize with them inside the building. I can’t hold their hands,” Smalls, who was terminated by Amazon in 2020, said. “The requirement of any union president is to travel and amplify the workers. That’s exactly what I do.”
Smalls was fired after being accused of violating COVID-19 safety protocols, but he has alleged retaliation. Amazon denied that retribution played a role in the firing and said Smalls had received “multiple warnings” for violating social distancing guidelines.
Another sharp divide within the union centers on the governance structure that underlies its decision-making and leadership.
An initial version of the union’s constitution, filed with the Department of Labor last June, ordered that the first union elections should take place 60 days after certification of the union, a step that precedes contract negotiations; or in 2024 if the union had yet to be certified by then, according to the document.
However, a new version of the constitution, filed in December, pushed an initial election back to 90 days after the union signs its first contract, the document said. The union may not sign a contract for more than a year, leaving officers, like Smalls, in their current positions without risk of an election challenge.
At a union meeting in December, Smalls offered attendees an ultimatum regarding the new version of the constitution. “If you can’t organize by this structure and this document, this ain’t for you,” he said. “This is the law from here on out.” Some members walked out of the meeting in protest.
When asked about the meeting, Smalls said: “No one is above the constitution, including me. They don’t want to follow the rules — there’s the door. They chose the door.”
Nicole Druda, who began working at the Staten Island facility in 2021, said she voted against unionization in part because she had become disenchanted by a union that represented her at a previous job. But she said she spoke to an ALU organizer in November and began supporting the union this year.
“I really want something that will benefit me as an employee,” she said. “And as somebody who wants to be more politically active, this could help workers in general across the country get more of a voice.”
Smalls said he expects the union to reach an agreement with Amazon on a first contract within the next year.
“I don’t want to do this forever,” he added. “I’ve been laser focused on this. The only thing I have is a contract in my vision — nothing more, nothing less. A contract for the workers so we can move on to the next thing.”
Jetson Electric Bikes recalls 42-Volt Rogue Self-Balancing Scooters/Hoverboards due to fire hazard. — CPSC
(WASHINGTON) — After two deaths, approximately 53,000 hoverboards are being recalled due to fire risks, the U.S. Consumer Product Safety Commission (CPSC) said Thursday.
The voluntary recall impacts certain Jetson Rogue self-balancing scooters — also known as hoverboards — which were sold at Target and on the company’s website.
CPSC said a 10-year-old girl and her 15-year-old sister died from an April 2022 fire in Hellertown, Pennsylvania. Local officials determined that a 42-volt Jetson Rogue was the point of origin of the fire, according to a news release from CPSC, which also said “the cause of the fire was undetermined.”
But the agency said the lithium-ion battery packs in the hoverboards can overheat, posing a fire hazard. CPSC also said it was aware of other reports of the recalled scooters “burning, sparking or melting, several of which involved reports of flames.”
CPSC advised consumers to “immediately” stop using and stop charging the recalled 42-volt version of the self-balancing scooters and contact Jetson for a full refund.
In a statement, Jetson said the voluntary recall was “out of an abundance of caution.”
“The safety and quality of all our products is our top priority,” the company said, “and our team is committed to ensuring our products meet all industry standards and regulatory requirements.”
(SEATTLE) — Seattle will provide paid sick and safe leave for most gig workers under a new law, becoming the first U.S. city to guarantee such benefits on a permanent basis for app-based employees.
Workers who perform tasks for companies like Instacart, Postmates and DoorDash will accrue a day of paid sick leave for every 30 days they do work in Seattle. While on leave, workers will receive pay based on their average daily compensation.
The law permanently enshrines a temporary measure that mandated paid sick and safe leave for some food delivery workers in Seattle during the pandemic, when many customers stuck at home came to depend on delivery services. That measure was set to expire on May 1.
“A healthy workforce leads to a healthy community, and no one should have to choose between taking a sick day to care for themselves — or their families — and making rent,” Seattle Mayor Bruce Harrell said in a statement.
“Gig workers stepped up to serve our city during the pandemic and are an essential part of our workforce and economy, and this important legislation ensures the rights of our app-based workers remain protected,” Harrell added.
The new law expands the type of workers covered from food delivery employees to those working for a slew of apps covering a range of “on-demand” tasks. Gig workers who set their own pay will not be covered.
App-based drivers for Uber and Lyft are already guaranteed paid sick days under state law, according to a press release from the mayor’s office.
Workers protected by the law will be allowed to take time off to care for their own health or that of a loved one, go to a doctor’s appointment or pick up a child in the event of a school closure, among other activities, the mayor’s office said.
The legislation marks the latest advance for gig workers as some city, state and federal officials push for some app-based workers to either be classified as employees or receive benefits akin to those that companies must offer part-time or full-time staff.
In a statement, Instacart said it is open to collaboration with lawmakers on enhanced worker protections but that the new law could lead to higher prices for its customers.
“Instacart is committed to providing shoppers what they need to earn on their terms, and we continue to make shopper health and safety a top priority,” the company said. “Instacart is willing to work with any policymaker that prioritizes the health and safety of shoppers who choose to earn income through our platform.”
“However, at a time of high inflation and tightening household budgets, it is critical that policymakers also take into account the rising financial burden their misguided policy proposals could have on their constituents,” the company added.
In 2022, the Biden administration proposed a rule change that would make it easier for gig workers to be classified as employees, giving them access to minimum wage protections and other benefits.
Meanwhile, over the past five years, legislators in nine states have proposed laws that would guarantee portable benefits for gig workers that would travel with them from one app-based company to the next, according to the National Conference of State Legislatures.
At the outset of 2020, California implemented a measure called Assembly Bill 5, which eased the standards used for classifying gig workers as full-time employees, affecting at least one million workers.
Months later, a state referendum approved by California voters excluded Uber and Lyft workers from the new standards, returning them to the category of independent contractors.
In Seattle, gig worker advocates celebrated the new legislation guaranteeing paid sick and safe days.
“The gig economy is booming thanks to workers,” Danielle Alvarado, the executive director of the nonprofit Working Washington, said in a statement.
“We are proud that Seattle has recognized the importance of making sure gig workers can stay home when they are sick or need to take care of a loved one,” Alvarado added. “When gig workers are protected, we all are.”
(NEW YORK) — Embattled crypto executive Sam Bankman-Fried now faces an additional criminal charge of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act, according to a superseding indictment unsealed Tuesday in the Southern District of New York.
The new charge brings to 13 the total number of counts Bankman-Fried faces, all stemming from alleged corruption in the operations of the crypto companies he founded: FTX and Alameda Research.
Bankman-Fried pleaded not guilty on Thursday to this newest count and four others unsealed in a prior indictment in late February. Bankman-Fried had previously pleaded not guilty to the other eight charges he faces.
“We will be challenging the new charges when motions are filed,” a spokesperson for Bankman-Fried told ABC News.
Bankman-Fried is due back in court June 15.
Bankman-Fried allegedly agreed to pay $40 million in cryptocurrency to foreign officials in China so they would unfreeze certain trading accounts on two of China’s largest crypto exchanges that belonged to Alameda, according to the superseding indictment.
The accounts had been frozen in 2021 by Chinese authorities as part of an investigation of a certain Alameda trading counterparty.
“After the accounts were frozen, Samuel Bankman-Fried, the defendant, and others operating at his direction, considered and tried numerous methods to unfreeze the accounts,” the indictment said. “After months of failed attempts to unfreeze the accounts, Samuel Bankman-Fried, the defendant, discussed with others and ultimately agreed to and directed a multi-million dollar bribe to seek to unfreeze the accounts.”
The alleged bribe payment was carried out in November 2021, at which time the accounts were unfrozen, prosecutors said, and Bankman-Fried resumed trading with the estimated $1 billion that remained in those accounts.
Bankman-Fried has pleaded not guilty to eight criminal charges. He has yet to enter a plea on this newest count and four others unsealed in a previous superseding indictment in late February.
Bankman-Fried has been free on a $250 million personal recognizance bond and under court orders to live with his parents. On Thursday, the judge overseeing the case will consider additional restrictions on Bankman-Fried’s bail after federal prosecutors raised concerns about his internet activities and his contact with current and former FTX employees.
According to a new court filing, Bankman-Fried’s parents have agreed to not allow him to use their phones and laptops and to install monitoring software on those devices that will photograph the device’s user every five minutes.
If the judge agrees, Bankman-Fried will not be allowed to contact current or former FTX and Alameda employees, use Signal or other encrypted messaging apps or use a VPN to access the internet.
He will be given a new laptop configured to allow access only to pre-approved websites, which are necessary for the preparation of the defense or for personal use, and do not pose a risk to the community.
(NEW YORK) — Roku plans to lay off another 200 workers, or 6% of its workforce, the video-streaming company said in a government filing on Thursday, just months after a prior round of layoffs in the fall that slashed 200 jobs.
The company’s revenue surged during the pandemic when customers stuck indoors came to rely on at-home entertainment.
However, the return of consumer habits more closely resembling pre-pandemic life has posed a challenge for the San Jose, California-based company.
The round of layoffs, which the company described as a “restructuring plan,” aims to “lower the Company’s year-over-year operating expense growth and prioritize projects that the Company believes will have a higher return on investment,” the government filing said.
The layoffs will cost the company between $30 and $35 million due to severance payments and other employee benefits, the filing said.
The company’s revenue stood essentially unchanged over the last three months of 2022 compared with the same period a year ago, according to an earnings report released last month.
Roku had previously warned of a difficult business environment expected at the end of last year due to a slowdown in ad spending and the adverse effects of inflation.
Shares of Roku ticked up about 1.5% in early trading on Thursday.
(NEW YORK) — Artificial intelligence-driven language models have garnered millions of users in recent months, instantly whipping up viral sensations like a biblical verse about how to remove a peanut butter sandwich from a VCR.
However, the AI-enhanced chat bots pose significant dangers that far outweigh the benefits, according to a group of tech leaders, including entrepreneur Elon Musk, who signed an open letter on Wednesday calling for a six-month pause in the development of AI systems and a major expansion of government oversight.
“AI systems with human-competitive intelligence can pose profound risks to society and humanity,” the letter said.
“Recent months have seen AI labs locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one – not even their creators – can understand, predict, or reliably control,” the letter added.
Earlier this month, artificial intelligence company OpenAI released the latest version of ChatGPT, the AI-powered language model that became an internet sensation late last year.
GPT-4, the latest model, can understand images as input, meaning it can look at a photo and give the user general information about the image; and it can write code in all major programming languages, among other advances.
The open letter released on Wednesday calls on AI labs to immediately pause the training of AI systems more powerful than GPT-4.
In addition to Musk, prominent figures signed onto the letter include Apple Co-founder Steve Wozniak, former Democratic presidential candidate Andrew Yang and Marc Rotenberg, the president of the nonprofit Center for AI and Digital Policy.
In all, the letter features more than 1,000 signees, including professors, tech executives and scientists.
The letter arrives roughly a month after Microsoft released a newly AI-enhanced version of its search engine Bing for some users.
Microsoft declined to comment on the letter. Open AI did not immediately respond to a request for comment from ABC News.
Describing conversations with the chatbot that lasted as long as two hours, some journalists and researchers warned that the AI could potentially persuade a user to commit harmful deeds or steer him or her toward misinformation.
In a series of blog posts, Microsoft acknowledged unexpected results and placed limits on the tool.
“We’ve updated the service several times in response to user feedback, and per our blog are addressing many of the concerns being raised, to include the questions about long-running conversations,” a Microsoft spokesperson previously told ABC News.
In January, Microsoft announced it was investing $10 billion in OpenAI, the artificial intelligence firm that developed Chat GPT.
The move deepened a longstanding relationship between Microsoft and OpenAI, which began with a $1 billion investment four years ago.
The open letter called on AI developers to work with policymakers to improve oversight of artificial intelligence technology, and called on the industry to shift its priorities as it works to enhance AI.
“AI research and development should be refocused on making today’s powerful, state-of-the-art systems more accurate, safe, interpretable, transparent, robust, aligned, trustworthy, and loyal,” the letter said.
(WASHINGTON) — Starbucks’ former CEO Howard Schultz on Wednesday denied breaking the law in response to sharp criticism from Sen. Bernie Sanders, I-Vt., who accused the company of “the most aggressive and illegal union busting campaign in the modern history of our country.”
In response to questions from Sanders during a Senate hearing, Schultz affirmed the right of workers to choose whether to unionize and defended the company’s actions.
Starbucks “has not broken the law,” Schultz said. “Let me set the tone for this very early on.”
Schultz, who served as Starbucks CEO for over 20 years across three stints, said Starbucks has negotiated in “good faith” with employees as they’ve sought to unionize and obtain collective benefits.
More than a dozen decisions from federal officials have found that the company violated labor law in its response to a wave of union campaigns at its stores, according to the National Labor Relations Board, a federal agency.
Roughly 290 of almost 9,000 company-owned stores in the U.S. have voted to unionize. However, workers have yet to sign a union contract at a single location.
Earlier this month, an administrative judge ruled that Starbucks had committed “egregious and widespread misconduct” in its effort to prevent unionization at some of its stores.
The judge, Michael A. Rosas, mandated the company reinstate several workers and Schultz read a notice to employees, among other remedies.
More than 500 formal allegations of labor law violations have been filed against Starbucks with regional offices of the NLRB, the agency said this month.
In all, 13 decisions have ordered remedies for unfair labor practices committed by Starbucks, including the reinstatement of 22 employees, the NLRB said. Some of those decisions have been appealed, the agency added.
Schultz characterized the findings against Starbucks as “allegations,” adding that the company is “confident that those allegations will be proven false.”
Workers United, the labor organization organizing Starbucks workers, said in a statement that it welcomed the Senate hearing as a venue for Schultz to face accountability for his response to the union campaign.
“We’re hopeful for change,” a Workers United spokesperson said. “We’re hopeful that this hearing moves the needle forward for baristas and workers all across the country.”
“We look forward to Howard Schultz being held accountable for his actions and being forced to answer to his unprecedented union-busting campaign under oath,” the spokesperson added.
Starbucks workers achieved an unprecedented wave of unionization at the company last year but the pace of union victories fell significantly over the course of last year.
Over the first half of 2022, the National Labor Relations Board received union election petitions from an average of 47 Starbucks stores per month; but over five months ending in November, that election rate dwindled to 11 stores per month, according to data from the NLRB.
