Veteran Starbucks boss Howard Schultz is stepping down from the company’s board of directors after forty years at the coffee house. According to sources, he realized he had become a “distraction” for the chain.
Schultz, 70, bought the company from co-founders Jerry Baldwin, Zev Siegl and Gordon Bowker in the early 1980s, a decade after it launched in Seattle.
But on Wednesday, Starbucks unexpectedly announced that Schultz would step down from the board, ending his four-decade reign.
Schultz’s departure is partly due to concerns that his outspoken anti-union stance was becoming a “distraction,” and that the controversy was not helping the brand.
“The company has changed a lot since Howard’s heyday,” a source said The New York Post.
“There’s no point in him being part of it anymore.”
Howard Schultz is photographed in March testifying about his company’s resistance to unionization
Schultz is seen in Italy in 1983, on a research trip. Upon his return, he tried to convince the three founders of Starbucks to offer traditional espresso drinks in addition to whole bean coffee
Schultz pushed the company to become the largest coffeehouse chain in the world, serving three roles as chairman and CEO. He retired in 2000 and then returned in 2008; resigned in 2017 and returned as interim CEO from 2022 to March 2023.
In his last stint, Schultz has faced pressure from shops wanting to unionize. At least 293 of Starbucks’ 9,000 U.S. stores have voted to unionize as of the end of 2021, according to the National Labor Relations Board.
Starbucks Workers United, the union that aims to unite stores, has not yet reached a contract agreement with the company for any Starbucks store.
The young group celebrated Schultz’s departure by tweeting Tuesday: “Howard Schultz led one of the worst union-busting campaigns in modern American history, culminating in him testifying before the Senate about Starbucks’ illegal actions.
“We hope this is an opportunity for Starbucks to change course and put the union fraud behind it.”
Starbucks’ anti-union stance appears to be continuing under the company’s new CEO, Laxman Narasimhan, who was hand-picked by Schultz and took over the company in March – shortly before Schulz testified in the Senate.
“I continue to believe that a direct relationship with our partners is the best path forward,” Narasimhan said.
Schultz is seen in 2002, opening Starbucks in Japan
Schultz – who will now become ‘chairman emeritus’ – has spoken out against plans for Starbucks employees to unionize. He said the company was “under fire from the union organization.”
Judges and prosecutors have accused the company of violating labor laws, and in March Schultz appeared before Congress to defend the company’s position.
During an often testy two-hour appearance before the Senate Health, Education, Labor and Pensions Committee, Schultz said a union was unnecessary because the coffee company already offers good wages and benefits, and only about one percent of its 250,000 U.S. employees Starbucks have chosen to join a union.
“We have done everything we can to respect our partners’ right under the law to join a union,” Schultz said.
“But conversely, we have consistently expressed our preference, without breaking any law, to communicate to our people what we believe is our vision for the company.”
Bernie Sanders, a Vermont independent who has been an outspoken supporter of Starbucks union organizers, accused the company of stalling.
He said multiple federal courts and administrative law judges at the NLRB have found Starbucks guilty of hundreds of labor law violations, including firing labor organizers and illegally closing unionized stores.
Schultz is seen in March 2019, considering an independent run for the White House. In June 2019, he announced that he would not run for president
“The fundamental question we face today is whether we have a legal system that applies to everyone, or whether billionaires and big corporations can break the law with impunity,” Sanders said.
But Schultz defended the company, noting that Starbucks’ average starting salary is $17.50, while the minimum wage in Vermont is $13.18.
“I think unions have played an important role in corporate America for years,” Schultz told the committee.
‘In the 1950s and 1960s, unions generally worked on behalf of people in a company where people were not treated fairly.
‘We don’t believe we are that kind of company. We don’t do anything shameful. We put our people first.’
Sen. Tina Smith, a Minnesota Democrat, questioned Schultz’s respect for workers, noting that the company has refused to add new benefits — such as credit card tips or raises — to unionized stores.
“You are a billionaire and they are your employees. The imbalance is extreme,” Smith said.
Schultz angrily responded that it was unfair to repeatedly call him a “billionaire.”
“I grew up in federally subsidized housing. My parents never had a house. Yes, I have billions of dollars. I earned it. No one gave it to me,” he said.
On Wednesday, Schultz said he supported the company’s new bosses.
“I look forward to supporting this next generation of leaders to lead Starbucks into the future as a customer, supporter and advocate in my role as Chairman Emeritus,” he said.