Starbucks boosts parental leave as it faces union organising push

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Starbucks has more than doubled paid leave for new parents working at 10,000-plus US stores, a policy change under new chief executive Brian Niccol as the company manages a union-organising push among baristas. 

The improved benefit of up 18 weeks of paid leave will be available to the more than 200,000 baristas, store managers and other retail employees who work at company-operated stores. They currently receive six weeks of paid leave.

Niccol is in the early stages of an effort to turn around falling sales at the world’s largest coffee shop chain since he was hired from Chipotle Mexican Grill earlier this year.

The company is also in the middle of talks to reach a first set of contracts with Workers United, a labour union that has organised more than 525 stores in the US. Workers United on Monday said Starbucks increased parental leave after the union first proposed it last month.

Niccol has visited stores in dozens of markets since he joined in September. “Our benefit was already the best in retail, but after hearing from some partners who shared the leave as new parents wasn’t adequate, we reviewed the programme and have decided we’re making a change,” he said in a message posted online on Monday. 

Beginning in March, store employees who have given birth will be entitled to up to 18 weeks of fully paid leave. Twelve weeks of paid leave will be available to their spouses, partners and employees who are parents through adoption, foster placement or other means besides giving birth. 

The improved benefits bring parental leave for baristas roughly in line with the benefit already available to Starbucks corporate employees. Any US store employees who work at least 20 hours a week would be eligible for the longer parental leave, Starbucks said.

Michelle Eisen, a Starbucks barista and Workers United bargaining delegate, said the union last month had proposed to double parental leave for store employees.

“Without responding to our proposal, the company declared they are expanding leave to all baristas. We are proud of this victory for all baristas,” Eisen said in a statement. “Starbucks is showing that they have heard our demands and are reacting to our growing organising movement.”

Starbucks did not address whether it had made the change in response to a union bargaining demand.

Store operating expenses, including wages and benefits, totalled $12.5bn at Starbucks’ North American locations in the fiscal year that ended in September. A Starbucks spokesperson declined to estimate the additional cost of the improved benefits. Shares of Starbucks fell by 3.2 per cent after the announcement on Monday.   

The new leave policy will apply to the 10,000 stores Starbucks owns in the US, but not the nearly 7,000 licensed stores that are operated independently.

Starbucks has long advertised good pay and benefits compared with other food and beverage outlets. But its baristas have complained of being underpaid and overwhelmed by complex drink orders arriving at the counter and through the Starbucks app.