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    Former Starbucks CEO Howard Schultz Spars With Democrats at Senate Hearing

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    Howard Schultz faced rancor from Senate Democrats at a hearing where he chafed at “propaganda that is floating around” about company labor practices.Howard Schultz was the star witness, but the hearing revealed almost as much about the party in power as it did about the longtime Starbucks chief executive.When Mr. Schultz appeared Wednesday before the Senate Committee on Health, Education, Labor and Pensions, at a session titled “No Company Is Above the Law: The Need to End Illegal Union Busting at Starbucks,” he encountered a Democratic Party much changed since some of his earlier trips to Washington.In 1994, President Bill Clinton invited Mr. Schultz to the White House for a private briefing on the company’s health care benefits. Two years later, the president praised Starbucks when introducing Mr. Schultz at a conference on corporate responsibility. At the time, Bernie Sanders was a backbencher in the House of Representatives.On Wednesday, Mr. Sanders, now chairman of the Senate committee, appeared to regard Mr. Schultz with something bordering on disdain.Before a question, Mr. Sanders, a Vermont independent who caucuses with the Democrats, felt the need to remind Mr. Schultz that federal law prohibits a witness from “knowingly and willfully making” a false statement relevant to an inquiry. The chairman then asked him if he had participated in decisions to fire or discipline workers involved in a union campaign. (Mr. Schultz said he had not.)Mr. Sanders noted that an administrative law judge had found “egregious and widespread misconduct” by Starbucks in its response to the campaign, in which nearly 300 of the roughly 9,300 corporate-owned stores in the United States have voted to unionize. And he chided Mr. Schultz for what he said was the company’s “calculated and intentional efforts to stall, to stall and to stall” rather than bargain with the union in good faith.Senator Bernie Sanders accused Starbucks of “calculated and intentional efforts to stall, to stall and to stall” in contract talks.Kenny Holston/The New York TimesThe hearing was held on the same day Starbucks reported that its shareholders had backed a proposal asking the company to commission an independent assessment of its practices as they relate to worker rights, including the right to bargain collectively and to form a union without interference.Though the proposal is nonbinding, the 52 percent vote in its favor suggests unease among investors over Starbucks’s response to the union campaign.Mr. Schultz, who recently ended his third tour as the company’s chief executive and remains a board member and major shareholder, seemed as mystified as anyone by his personal change of fortune in the capital. He chafed at what he described as “the propaganda that is floating around” the hearing and told Senator Bob Casey, Democrat of Pennsylvania, that “I take offense with you categorizing me or Starbucks as a union-buster.”When another Democrat, Senator Patty Murray of Washington — the home state of Starbucks — said she had heard from constituents about “widespread anti-union efforts,” Mr. Schultz reminded her that they had known each other for years and that she had “many times actually talked about Starbucks as a model employer.”He responded to Mr. Sanders’s accusation that Starbucks was not bargaining in good faith by noting that the company had met with the union over 85 times. (The union points out that most of these sessions ended within 15 minutes; Starbucks says this is because union members sought to take part remotely.) And he denied that Starbucks had broken the law; it has appealed the rulings against it.Aside from the accusations of labor law violations, the question at the heart of the hearing was: Can chief executives be trusted to treat their workers fairly?Mr. Schultz’s answer was an emphatic yes, at least in his case. He highlighted the company’s wide-ranging benefits — not just health care, including for part-time employees, but stock grants, paid sick leave, paid parental leave and free tuition at Arizona State University. He said that the average wage for hourly workers at Starbucks was $17.50, and that total compensation, including benefits, approached $27 an hour.“My vision for Starbucks Coffee Company has always been steeped in humanity, respect and shared success,” he said near the outset of the hearing.Some attending the hearing wore T-shirts signaling their support for the Starbucks union.Kenny Holston/The New York TimesRepublicans on the committee were quick to agree. Senator Rand Paul of Kentucky called Starbucks an “extraordinary tale of a company that started out of nothing and employs tens of thousands of people all making great wages.”Senator Mitt Romney of Utah, a former chief executive, said it was “somewhat rich that you’re being grilled by people who have never had the opportunity to create a single job.” He suggested that while a union might be necessary at companies “that are not good employers,” that was not the case at Starbucks.Democrats’ response came at two levels of elevation. First, they said the company was excluding unionized stores from the benefits that Starbucks had introduced since the union campaign began, such as faster accrual of sick leave and a credit-card tipping option for customers, showing that its commitment to such benefits was tenuous.The National Labor Relations Board has issued complaints calling the denial of benefits to union stores an attempt to discourage workers from organizing. Mr. Schultz said at the hearing that the company couldn’t offer the new benefits at union stores because the law said it must bargain over them first; legal experts have cast doubt on that interpretation.More broadly, Democrats argued that unions acted as a corrective to a basic power imbalance between workers and management. A company might treat workers generously under one chief executive, then harshly under another. Only a union can ensure that the favorable treatment persists, said Senator Edward J. Markey of Massachusetts.Yet in illustrating how far the politics of labor have changed in Washington in recent decades, there was perhaps no better bellwether than Senator John Hickenlooper of Colorado, a former business owner and self-described “extreme moderate.”Mr. Hickenlooper conducted himself more respectfully and deferentially than most of his Democratic colleagues, applauding Mr. Schultz for “creating one of the most successful brands in American history” and declaring that “you know more about economics than I will ever know.” But in his questioning he aligned himself squarely with his party, pointing out that the rise of inequality in recent decades had coincided with the weakening of unions.“I certainly respect the desire to be directly connected with all your employees,” he told Mr. Schultz. “But in many ways that right to organize, and that opportunity for people to be part of a union, is a crucial building block for the middle class and, I think, gave this country stability.” More

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    Amazon Union Prevails in Ruling on Warehouse Access for Organizing

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    Federal labor regulators said that Amazon had illegally barred off-duty employees from work sites and that the policy was aimed at union backers.Federal labor regulators have concluded that Amazon’s policy of restricting the warehouse access of off-duty employees is illegal, backing a contention of the union that has represented workers at a Staten Island warehouse since winning an election there last year.In a written communication sent to the union on Wednesday, a lawyer for the National Labor Relations Board’s Brooklyn region, Brent E. Childerhose, said the regional office had determined that the company broke the law by adopting the access rule last summer in response to union activity, and that it had applied the rule in a discriminatory fashion against union supporters.The Amazon Labor Union contends that the access policy makes it difficult for workers to exercise their right to talk to co-workers about joining or supporting a union.An Amazon spokeswoman, Mary Kate Paradis, said that the company had adopted the rule to protect employee safety and building security, and that it applied the rule fairly and in a way that “has nothing to do with whether an individual supports a particular cause or group.” Employees continue to have access to nonwork areas outside company buildings, she said.Portions of the case will go to a trial before an administrative law judge unless Amazon settles it beforehand. The losing side can appeal the judge’s decision to the labor board in Washington. A lawyer for the union, Seth Goldstein, said that if the labor board prevailed, Amazon might have to roll back the off-duty-access policy at warehouses around the country. The labor board did not immediately respond to a query about the potential impact.The board also said the company had illegally failed to bargain with the union. An N.L.R.B. regional director certified the result in January, but the company is appealing the outcome to the labor board in Washington.The Amazon spokeswoman said it wouldn’t make sense to negotiate changes to how the company operated at the site while Amazon continued to challenge the election’s validity.Amazon has traditionally forbidden workers to remain inside its warehouses, including break rooms, if they are not within 15 minutes of their shift. But the labor board reached a settlement with the company to ease the policy nationally in late 2021, as the union campaign at the Staten Island warehouse, known as JFK8, was gaining momentum.Union organizers attribute their election victory at JFK8 partly to the ability of off-duty employees to talk to co-workers and distribute food and union material in break rooms. They say the loss of such access last summer, not long after their victory, made it far more difficult to reach workers at the warehouse and try to enlist them in a pressure campaign to bring Amazon to the bargaining table.Under the settlement, Amazon was allowed to reinstitute a more restrictive policy after a few months, but the labor board contends that the manner in which it did so was discriminatory and therefore illegal. More

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    Can the United Farm Workers of California Rise Again?

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    Veronica Mota marched under the sweltering sun, hoisting a cloth banner of Our Lady of Guadalupe above her head for miles.“Sí, se puede,” she chanted in unison with dozens of other farmworkers, who waved U.S. and Mexican flags as they walked along two-lane roads lined by dense orange groves in the Central Valley of California.The banner, flags and rallying cry — “Yes, we can” — echoed back more than half a century to when Cesar Chavez, a co-founder of the United Farm Workers union, led agricultural workers on a pilgrimage along a similar route to meet lawmakers in Sacramento.“We are a legacy of Cesar Chavez,” said Ms. Mota, 47, who, when blisters began to form on her feet during the 24-day trek in August, gathered strength by thinking of how the march in the 1960s led to groundbreaking farmworker reforms and propelled the U.F.W. to national prominence.“We can achieve what we want,” Ms. Mota said.What the farmworkers wanted last summer was for Gov. Gavin Newsom to sign into law a bill that they argued would make it easier and less intimidating for workers to vote in union elections — a key step, they believed, in rebuilding the size and influence of a now far less prolific U.F.W. But changing a rule is not the same as changing the game. The question now is whether the U.F.W. can show it has not irretrievably lost its organizing touch and can regain the ability to mobilize public opinion on its behalf as it did under Mr. Chavez.The union is a shadow of what it was decades ago. Membership hovers around 5,500 farmworkers, less than 2 percent of the state’s agricultural work force, compared with 60,000 in the 1970s. In the same period, the number of growers covered by U.F.W. contracts has fallen to 22 from about 150. The march last summer stood as a reckoning of sorts for a union desperate to regain its relevance.California’s fields provide about half of the produce grown in the United States for domestic consumption.Mark Abramson for The New York TimesFarmworkers at an orange grove outside Fresno.Mark Abramson for The New York TimesU.F.W. officials say they have secured contracts focusing on health coverage.Mark Abramson for The New York TimesLabor organizing has rebounded nationwide in the last few years, with unions winning elections at an Amazon warehouse on Staten Island and at least 275 Starbucks stores, and among white-collar workers in the tech and media industries. But in California’s fields, which supply about half of the produce grown in the United States for the domestic market, such efforts have found little traction.It has been more than five years since the U.F.W. mounted an organizing drive and election petition in the state — at Premiere Raspberries in Watsonville. The U.F.W. unionization vote succeeded, but the company refused to negotiate a contract and in 2020 announced plans to shut down and lay off more than 300 workers.Ms. Mota, who has worked seasonal jobs around the state for two decades, has seen her wages drop by about $6,000 over the last several years. She is now earning around $15,000 a year. She said that on farms without union contracts, bosses sometimes make veiled threats about cutting hours, refuse to give workers breaks in 100-plus degree weather and turn a blind eye to dangerous conditions.“Where we do not have a union contract, there is no respect,” she said in Spanish on a recent morning from her ranch-style home in the farming town of Madera.But the bill backed by Ms. Mota, which Mr. Newsom signed into law after the marchers arrived in Sacramento, has fueled a cautious optimism. Backers say the ability to more freely organize will help them gain more influence.“There is new energy, new legislation and attention from the public in terms of workers’ rights,” said Christian Paiz, a professor of ethnic studies at the University of California, Berkeley, who has researched farm labor in the state. “We could be on the front lines of a renaissance.”The Shadow of Cesar ChavezFarmworkers have, for generations and by design, existed on the fringes of the American work force.The National Labor Relations Act of 1935 excluded farm and domestic workers from federal protections — a decision, rooted in racism, that ensured that the Black, Latino and Asian people whose work opportunities were largely limited to those two industries were not covered.But by the 1960s, momentum for change was building.Farm workers on their march from Delano to Sacramento in 1966.Jon Lewis/Beinecke Rare Book and Manuscript Library, Yale UniversityMr. Chavez, who was a farm laborer picking avocados and peas before becoming a grass-roots organizer, teamed up with Dolores Huerta, a young workers’ rights activist from the Central Valley, and in 1962 they founded the National Farm Workers Association. It became the U.F.W.Labor Organizing and Union DrivesA New Inquiry?: A committee led by Senator Bernie Sanders will hold a vote to open an investigation into federal labor law violations by major corporations and subpoena Howard Schultz, the chief executive of Starbucks, as the first witness.Whitney Museum: After more than a year of bargaining, the cultural institution and its employees are moving forward with a deal that will significantly raise pay and improve job security.Mining Strike: Hundreds of coal miners in Alabama have been told by their union that they can start returning to work before a contract deal has been reached, bringing an end to one of the longest mining strikes in U.S. history.Gag Rules: The National Labor Relations Board has ruled that it is generally illegal for companies to offer severance agreements that require confidentiality and nondisparagement.Three years later, it was a key force behind the Delano grape workers’ strike, in which thousands of Mexican and Filipino farmworkers walked off their jobs, demanding raises from $1.25 to $1.40 an hour, as well as elections that could pave the way for unionization.As the striking farmworkers made their way along the 335-mile trek in 1966, which started in Delano, the group grew steadily, and other unions began to pledge their support.In the Bay Area, longshoremen had refused to load shipments of grapes that hadn’t been picked by unionized workers and, before long, a statewide pressure campaign had become a national one.Weeks after the march began, a lawyer for Schenley Industries, a large Central Valley grape grower that was a target of the boycott, contacted Mr. Chavez, and the company soon agreed to negotiate a contract. It officially recognized the U.F.W., making it the first major corporation to acknowledge a farm union.The grape workers’ strike stretched into the summer of 1970, when widespread consumer boycotts forced major growers to sign on to collective bargaining agreements between the union and several thousand workers.In the years that followed, Mr. Chavez forged a relationship with Gov. Jerry Brown, a Democrat, and helped champion the California Agricultural Labor Relations Act of 1975, which established the right to collective bargaining for farmworkers and created a board to enforce the act and arbitrate labor fights between workers and growers. It was the first law in the country guaranteeing protections to farm workers.Cesar Chavez, center, leader of the National Farm Workers Association, outside a farm in 1966, with supporters bearing signs proclaiming “Strike.” The association was a predecessor of the United Farm Workers.Paul Fusco/Magnum PhotosBut the union’s gains soon began to erode. Mr. Brown’s Republican successor, George Deukmejian, and his appointees made changes to the farm labor board in the 1980s and cut funding, arguing that the adjustments were necessary to correct an “easily perceived bias” in favor of farm workers and the U.F.W. and against growers. And even when the union has won elections, it has often faced legal challenges from growers that can drag on for years.The law that Mr. Newsom signed last year, Assembly Bill 2183, was the union’s biggest legislative victory in years. It paved the way for farmworkers to vote in union elections without in-person election sites. For years, U.F.W. officials argued that dwindling membership numbers stemmed from fears about voting in person at sites often held on properties owned by the growers.The bill faced opposition from growers, who contended that the measure would allow union organizers to unfairly influence the process. Mr. Newsom initially voiced reticence, but signed the measure into law after then-House Speaker Nancy Pelosi and President Biden publicly pushed him to do so.“In the state with the largest population of farmworkers, the least we owe them is an easier path to make a free and fair choice to organize a union,” Mr. Biden said at the time.Supporters of the measure highlight how the demographics of farmworkers have changed over the years. In the 1970s, under Mr. Chavez, many farmworkers were U.S. citizens, but migration from Mexico and Central America in the decades that followed created a work force composed primarily of undocumented workers. Because they lack immigration papers, supporters say, they are especially vulnerable. (Undocumented workers can be covered by labor agreements.)In signing the measure, Mr. Newsom and the U.F.W. agreed to support follow-up compromise legislation that would guard farmworker confidentiality during elections and place limits on card-check voting, a method in which employees sign cards in favor of unionizing.‘We Are Ignored’Last summer, as she marched past vineyards and groves of mandarin oranges, Ms. Mota thought of the harvest cycle that has defined much of her life.She reflected on the dormant season, in December and January, when she prunes pistachio and almond trees, and the rainy months, when it’s sometimes hard to find work. But then comes the prosperous citrus and grape harvests, through the spring and the fall, which always make her think of the families who will eventually toast with wine squeezed from the fruit she plucked from the vine.“I love for my hands to harvest a fruit and then seeing those fruits and vegetables in the restaurant,” Ms. Mota said.U.F.W. supporters marched last year to urge Gov. Gavin Newsom to sign a bill that would make it easier for workers to vote in union elections.Jessica Christian/San Francisco Chronicle, via Associated PressShe thought, too, about the invisibility and dangers of her work — the tiny teeth marks etched into her leather boot by a snake bite, the molehill where she badly sprained her ankle, the co-worker airlifted to San Francisco with injuries.“We are ignored,” she said.Still, she didn’t feel that way during the march, where in many towns people greeted them with snacks, Gatorade and full meals. While the group was in Stockton, an inland port city, Ms. Huerta, now 92, stood before the crowd wearing a baseball cap emblazoned with the words, “Sí se puede.”“You all have made me so proud,” she told them.Ms. Huerta, who helped negotiate the first farmworker contract with Schenley, left U.F.W. leadership more than two decades ago to pursue other causes. But in an interview, she said the need for unionization remained as high as it was when she helped start the union.“Farmworkers wanted the support and still want the support,” said Ms. Huerta, who attributed the dearth of contracts to a refusal by growers to bargain in good faith.Despite setbacks in recent decades, U.F.W. officials say they have continued to secure contracts that focus on health care benefits, wage increases and cultivating a respectful culture between farmworkers and employees. At Monterey Mushrooms, which has operated under a contract since the 1980s, U.F.W. officials say the average annual income for a mushroom picker is $45,000 and includes vacation time and a pension. (The statewide average for farmworkers is between $20,000 and $25,000 a year, according to the U.S. Labor Department.)“With a union contract, workers are educated about their rights and empowered to defend them,” said Teresa Romero, the union’s president.Issues might vary from farm to farm, Ms. Romero said. “In one workplace it may be low wages, in another it may be unsafe conditions, in still another it may be the workplace culture — having to pay bribes or endure sexual harassment to get work or having a particular supervisor who is racist or cruel,” she said. “We understand the immense risks that workers are taking when speaking up on the job; it takes courage for workers to form their union.”Dolores Huerta, a founder of the U.F.W., at a rally in the 1970s.Cathy Murphy/Getty ImagesMs. Romero said she was confident that the new state law — along with a streamlined federal process to protect workers involved in labor disputes surrounding immigration threats from employers — would translate into more bargaining power and more contracts.A Question of StrategySome labor watchers are skeptical of the union’s ability to reinvigorate itself.Miriam Pawel, an author who has written extensively about the union and Mr. Chavez, said the U.F.W.’s decline reflected a shortfall in organizing efforts in the communities where farmworkers live.“It’s evolved more into an advocacy organization and walked away from the more difficult work of organizing,” Ms. Pawel said. Referring to the 1975 labor relations act, she added, “They have the most favorable labor law in the country and have barely taken advantage.”Ms. Pawel cited a 2016 state law mandating that agricultural employers pay overtime if people worked more than eight hours in a day. The union lobbied for the measure, but growers warned that they couldn’t afford to pay overtime and would adjust schedules to avoid doing so. The new overtime rule has been phased in over the years, and some farmworkers have voiced anger about losing hours.“If the union were stronger in the fields, and at organizing, it could have won elections and demanded better overtime provisions in contracts,” Ms. Pawel said.Ms. Romero pushed back against such criticism, arguing that, until Mr. Newsom signed A.B. 2183 in September, many farmworkers had justified fears that, if they sought unionization, their bosses would fire them or even try to get them deported.Indeed, a report by the University of California, Merced, Community and Labor Center found that 36 percent of farmworkers said they would not file a report against their employer for failing to comply with workplace safety rules and that 64 percent cited fear of employer retaliation or job loss.And since the bill’s passage, the Farm Employers Labor Service, a trade group that staunchly opposed the law, has placed advertisements on Spanish-language radio stations, warning about what it means to be in a union. In one ad, a man shouts: “Signing a union petition can lead to the union stealing 3 percent of your salary! Do not let them!”Those messages deeply concern Ms. Romero.“Filing for an election when workers are not protected from genuine risks of retaliation will only lead already poor people into further hardship,” she said. “This is the implicit threat that the growers’ power depends on.”‘They Just Want to Work’Joe Del Bosque at his melon farm in Firebaugh, Calif. He has never had a union contract and plans to keep it that way.Mark Abramson for The New York TimesMany California growers say they can be better bosses without unions.On a recent afternoon off Interstate 5 in the small city of Firebaugh, Joe Del Bosque stared out at bare fields on the melon farm he has owned since 1985. A thick fog hung over the area, and the ground was puddled from rain water. It was the quiet season on the farm, where he employs more than 100 farmworkers annually.Mr. Del Bosque said that when he was a boy, his parents, legal U.S. residents, traveled from a town near the California-Mexico border to the Central Valley to pick melons every summer. As a farm owner, he has never had a union contract, and aims to keep it that way.He provides his employees with good conditions and fair wages, he said, without their having to pay union dues. “From my experience, workers who are moving around from season to season do not want the extra hands involved,” he said of the union. “They just want to work.”He said he had little trouble finding field hands, including migrants who move from farm to farm with each season. And he noted that in the Salinas Valley — closer to the coast, where housing is more expensive — many growers rely on H-2A visas, which let them bring workers, often from Mexico, for just a few months of the year.That impermanence, he said, works against the U.F.W. “If the workers are here only a few months a year and then leave the state, how are you going to organize?” he said.Mr. Del Bosque said that he respected the U.F.W.’s history and the groundwork of Mr. Chavez and Ms. Huerta, but that he opposed A.B. 2183. The law, he contends, will allow the U.F.W. to unfairly sway farmworkers at their kitchen tables and behind closed doors.“That’s the intimidation factor,” Mr. Del Bosque said.A New Spirit of ActivismAsuncion Ponce began harvesting grapes in the late 1980s. He says bosses on unionized farms “don’t mess with you.”Mark Abramson for The New York TimesWhile the impact of the law remains unclear, it has buoyed the spirits of some farmworkers.Asuncion Ponce started harvesting grapes along the rolling green hills of the Central Valley in the late 1980s. Through the decades, Mr. Ponce has worked on several farms with U.F.W. contracts. Bosses on those farms, he said, seemed aware that if they harassed or mistreated workers, the union would step in.“They don’t mess with you any more,” he said, “because they think there could be problems.”Even so, he has seen his financial security decline. He averaged $20,000 a year in the 1990s and 2000s, he said, but these days he brings in around $10,000 a year picking grapes and pruning pistachio trees. His eight-hour shifts are no longer supplemented by overtime, as growers have cut hours — partly as a result of the overtime bill U.F.W. leaders supported.Occasionally, Mr. Ponce said, he relied on third-party contractors, who growers sometimes employ, to find him available work. But he said he was optimistic that with the new legislation he would land a full-time job on a union farm.On a recent evening, the 66-year-old sipped coffee and decompressed after a shift at a farm outside of Fresno. His feet ached and his flannel shirt was stained with fertilizer, but he is happy that his job lets him spend all day outdoors — a passion born in his hometown in the Mexican state of Puebla, where he harvested corn and anise.He smiled softly under his white mustache as he spoke about the legacy of Mr. Chavez, which inspired him to join for several legs of the pilgrimage last summer.“I marched for many reasons,” he said in Spanish. “So we are not as harassed and mistreated as we are now in the fields, so benefits and better treatment come our way.”For Ms. Mota, joining the march helped awaken a new spirit of activism.Over the years, she said, she felt afraid to talk about unionizing at work, but now she tells any colleagues who will listen about the advantages she sees: the ability to negotiate a better salary, benefits and a respect for seniority.Her viewpoint was shaped in her early years as a farmworker. “Throughout the years I have realized that we are marginalized,” she said. “They don’t value us.”Once, she said, she watched as a farmer grabbed a knife used to harvest cantaloupe and put it to the cheek of another worker. He glared into the farmworker’s eyes, she said, and called the workers his slaves.“You feel humiliated,” she said, fighting back tears.She is convinced that having a strong union is the only answer. “We deserve a dignified life in this country,” she said.“Throughout the years I have realized that we are marginalized,” Veronica Mota said.Mark Abramson for The New York Times More

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    You’re Now a ‘Manager.’ Forget About Overtime Pay.

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    New evidence shows that many employers are mislabeling rank-and-file workers as managers to avoid paying them overtime.For four years beginning in 2014, Tiffany Palliser worked at Panera Bread in South Florida, making salads and operating the register for shifts that began at 5 a.m. and often ran late into the afternoon.Ms. Palliser estimates that she worked at least 50 hours a week on average. But she says she did not receive overtime pay.The reason? Panera officially considered her a manager and paid her an annual salary rather than on an hourly basis. Ms. Palliser said she was often told that “this is what you signed up for” by becoming an assistant manager.Federal law requires employers to pay time-and-a-half overtime to hourly workers after 40 hours, and to most salaried workers whose salary is below a certain amount, currently about $35,500 a year. Companies need not pay overtime to salaried employees who make above that amount if they are bona fide managers.Many employers say managers who earn relatively modest salaries have genuine responsibility and opportunities to advance. The National Retail Federation, a trade group, has written that such management positions are “key steps on the ladder of professional success, especially for many individuals who do not have college degrees.”But according to a recent paper by three academics, Lauren Cohen, Umit Gurun and N. Bugra Ozel, many companies provide salaries just above the federal cutoff to frontline workers and mislabel them as managers to deny them overtime.Because the legal definition of a manager is vague and little known — the employee’s “primary” job must be management, and the employee must have real authority — the mislabeled managers find it hard to push back, even if they mostly do grunt work.The paper found that from 2010 to 2018, manager titles in a large database of job postings were nearly five times as common among workers who were at the federal salary cutoff for mandatory overtime or just above it as they were among workers just below the cutoff.“To believe this would happen without this kind of gaming going on is ridiculous,” Dr. Cohen, a Harvard Business School professor, said in an interview.Under federal law, employers are required to pay time-and-a-half overtime to salaried workers after 40 hours if they make about $35,500 or less.Scott McIntyre for The New York TimesDr. Cohen and his co-authors estimate that the practice of mislabeling workers as managers to deny them overtime, which often relies on dubious-sounding titles like “lead reservationist” and “food cart manager,” cost the workers about $4 billion per year, or more than $3,000 per mislabeled employee.And the practice appears to be on the rise: Dr. Cohen said the number of jobs with dubious-sounding managerial titles grew over the period he and his co-authors studied.Federal data appear to underscore the trend, showing that the number of managers in the labor force increased more than 25 percent from 2010 to 2019, while the overall number of workers grew roughly half that percentage.From 2019 to 2021, the work force shrank by millions while the number of managers did not budge. Lawyers representing workers said they suspected that businesses mislabeled employees as managers even more often during the pandemic to save on overtime while they were short-handed.“There were shortages of people who had kids at home,” said Catherine Ruckelshaus, the general counsel of the National Employment Law Project, a worker advocacy group. “I’m sure that elevated the stakes.”But Ed Egee, a vice president at the National Retail Federation, argued that labor shortages most likely cut the other way, giving low-level managers the leverage to negotiate more favorable pay, benefits and schedules. “I would almost say there’s never been a time when those workers are more empowered,” he said. (Pay for all workers grew much faster than pay for managers from 2019 to 2021, though pay for managers grew slightly faster last year.)Experts say the denial of overtime pay is part of a broader strategy to drive down labor costs in recent decades by staffing stores with as few workers as possible. If a worker calls in sick, or more customers turn up than expected, the misclassified manager is often asked to perform the duties of a rank-and-file worker without additional cost to the employer.“This allows them to make sure they’re not staffing any more than they need to,” said Deirdre Aaron, a former Labor Department lawyer who has litigated numerous overtime cases in private practice. “They have assistant managers there who can pick up the slack.”Ms. Palliser said that her normal shift at Panera ran from 5 a.m. to 2 p.m., but that she was often called in to help close the store when it was short-staffed. If an employee did not show up for an afternoon shift, she typically had to stay late to cover.Gonzalo Espinosa said that he had often worked 80 hours a week as the manager of a Jack in the Box but that he had not received overtime pay.Max Whittaker for The New York Times“I would say, ‘My kids get out of school at 2. I have to go pick them up, I can’t keep doing this,’” said Ms. Palliser, who made from about $32,000 to $40,000 a year as an assistant manager. She said her husband later quit his job to help with their child-care responsibilities.She won a portion of a multimillion-dollar settlement under a lawsuit accusing a Panera franchisee, Covelli Enterprises, of failing to pay overtime to hundreds of assistant managers. Panera and representatives of the franchise did not respond to requests for comment.Gassan Marzuq, who earned a salary of around $40,000 a year as the manager of a Dunkin’ Donuts for several years until 2012, said in a lawsuit that he had worked roughly 70 hours or more in a typical week. He testified that he had spent 90 percent of his time on tasks like serving customers and cleaning, and that he could not delegate this work “because you’re always short on staff.”Mr. Marzuq eventually won a settlement worth $50,000. A lawyer for T.J. Donuts, the owner of the Dunkin’ Donuts franchise, said the company disputed Mr. Marzuq’s claims and maintained “that he was properly classified as a manager.”Workers and their lawyers said employers exploited their desire to move up the ranks in order to hold down labor costs.“Some of us want a better opportunity, a better life for our families,” said Gonzalo Espinosa, who said that in 2019 he often worked 80 hours a week as the manager of a Jack in the Box in California but that he did not receive overtime pay. “They use our weakness for their advantage.”Mr. Espinosa said his salary of just over $30,000 was based on an hourly wage of about $16 for a 40-hour workweek, implying that his true hourly wage was closer to half that amount — and well below the state’s minimum wage. The franchise did not respond to requests for comment.The paper by Dr. Cohen and his co-authors includes evidence that companies that are financially strapped are more likely to misclassify regular workers as managers, and that this tactic is especially common in low-wage industries like retail, dining and janitorial services.Still, lawyers who bring such cases say the practice also occurs regularly in white-collar industries such as tech and banking.When companies are financially strapped or in low-wage industries like retail and fast food, they are more likely to misclassify regular workers as managers, a recent report found.Max Whittaker for The New York Times“They have a job title like relationship manager or personal banker, and they greet you, try to get you to open account,” said Justin Swartz, a partner at the firm Outten & Golden. “They’re not managers at all.”Mr. Swartz, who estimated that he had helped bring more than two dozen overtime cases against banks, said some involved a so-called branch manager inside a big-box store who was the only bank employee on site and largely performed the duties of a teller.The practice appears to have become more difficult to root out in recent years, as more employers have required workers to sign contracts with mandatory arbitration clauses that preclude lawsuits.Many of the cases “are not economically viable anymore,” said Mr. Swartz, citing the increased difficulty of bringing them individually through arbitration.Some lawyers said only an increase in the limit below which workers automatically receive overtime pay is likely to meaningfully rein in misclassification. With a higher cutoff, simply paying workers overtime is often cheaper than avoiding overtime costs by substantially increasing their pay and labeling them managers.“That’s why companies fought it so hard under Obama,” said Ms. Aaron, a partner at Winebrake & Santillo, alluding to a 2016 Labor Department rule raising the overtime limit to about $47,500 from about $23,500. A federal judge suspended the rule, arguing that the Obama administration lacked the authority to raise the salary limit by such a large amount.The Trump administration later adopted the current cutoff of about $35,500, and the Biden administration has indicated that it will propose raising the cutoff substantially this year. Business groups say such a change will not help many workers because employers are likely to lower base wages to offset overtime pay. More

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    Starbucks Violated Labor Law in Buffalo Union Drive, Judge Rules

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    The decision cited “egregious and widespread misconduct,” including illegal monitoring and firing of workers. Starbucks signaled that it would appeal.In a sweeping decision, an administrative judge in New York ruled on Wednesday that Starbucks had violated federal labor law dozens of times in responding to a union campaign in the Buffalo area shortly after the campaign began roughly 18 months ago.Michael A. Rosas, a judge for the National Labor Relations Board, concluded that Starbucks had illegally monitored, disciplined and fired employees engaged in union organizing; added workers to stores to dilute support for the union; and promised new benefits to workers in an attempt to defuse support for the union.The ruling mandates the reinstatement of seven Buffalo-area workers who the judge concluded were unlawfully discharged from the company, and back pay and damages to more than two dozen workers who the judge concluded had suffered retaliation that affected their compensation, such as a reduction of hours.In addition, the judge ordered the chief executive of Starbucks, Howard Schultz, to read or be present for the reading of a notice, more than 10 pages long, promising to refrain from committing a series of labor law violations in the future, and to make and distribute a video of the reading.Because of the company’s “egregious and widespread misconduct demonstrating a general disregard for the employees’ fundamental rights,” Judge Rosas wrote, it was necessary to issue a broad order requiring Starbucks “to cease and desist from infringing in any other manner on rights guaranteed employees.”“This is truly a historic ruling,” Gary Bonadonna Jr., the regional head of Workers United, the union organizing Starbucks, said in a statement. “We will continue to fight and hold billionaires like Howard Schultz accountable for their actions. We will not rest until every Starbucks worker wins the right to organize.”The ruling can be appealed to the labor board in Washington, and to federal court after that, and Starbucks indicated that it might do so. “We believe the decision and the remedies ordered are inappropriate given the record in this matter and are considering all options to obtain further legal review,” the company said in a statement.The organizing campaign notched its first victory in Buffalo in 2021. Since then, more than 280 of the roughly 9,300 corporate-owned Starbucks locations in the United States have unionized. The ruling covers the period from August 2021 to July 2022, by which point the campaign had spread from the Buffalo area to dozens of stores nationwide.In the early months of the campaign, Starbucks workers complained that executives and other company officials were converging on Buffalo in an attempt to undermine their unionization effort.Judge Rosas found that Starbucks had violated labor law by “having high-ranking company officials make repeated and unprecedented visits to stores in order to more closely supervise, monitor or create the impression that employees’ union activities are under surveillance.”He also ordered the company to bargain with the union at a Buffalo-area location where the union lost an election in December 2021, concluding that the scope of the violations at the store tainted the vote and made a rerun of the election an “insufficient” remedy.It is rare but not unprecedented for a judge to effectively order in a union upon concluding that it had support among workers but that a fair vote is nearly impossible. More

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    Labor Board Curbs Gag Rules in Severance Agreements

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    The National Labor Relations Board said severance pacts requiring confidentiality and nondisparagement violated a law on collective worker activity.The National Labor Relations Board has ruled that it is generally illegal for companies to offer severance agreements that prohibit workers from making potentially disparaging statements about the employer or from disclosing details of the agreement.The ruling by the board, which has a Democratic majority, overturns a pair of 2020 decisions, when the board was controlled by Republicans and found that such severance agreements were not illegal on their face. It continues the labor board’s worker- and union-friendly trajectory under appointees of President Biden.The earlier decisions held that the severance agreements were illegal only if accompanied by other circumstances making them suspect, such as the possibility that they were being used to cover up the illegal firing of employees who tried to form a union.Still, Anne Lofaso, a professor of labor law at West Virginia University, said the latest decision was limited to rights under the National Labor Relations Act, such as employees’ rights to draw attention to unsafe working conditions, or to engage in other activities that protect or benefit workers as a group.She said an employer could still offer workers a severance agreement requiring them to give up their right to sue over, say, race discrimination under the Civil Rights Act of 1964.In the ruling, issued Tuesday, the board said it was returning to longstanding precedent. The 2020 standard, it said, ignored the fact that a severance package with confidentiality or nondisparagement provisions could on its own “unlawfully restrain and coerce” workers’ labor rights.“It’s long been understood by the board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights,” the board’s chairman, Lauren McFerran, said in a statement.Charlotte Garden, a professor of labor law at the University of Minnesota, said the 2020 approach had effectively tried to “narrow the rule to situations where an employer was trying to cover up their own previous unlawful activity and prohibit employees from talking about it.” The current ruling, she added, takes a broader view of when employees have the right to speak out.The case involved a Michigan hospital that permanently furloughed 11 union members during the pandemic. To receive severance benefits, they were required to sign an agreement that barred them from making statements that could disparage the hospital and from sharing the terms of the agreement.In furloughing the workers and offering them the agreement, the hospital also bypassed the union, depriving it of a chance to negotiate the terms, according to Tuesday’s ruling.In his dissent, Marvin Kaplan, the board’s lone Republican, argued that offering the severance agreement was illegal because the hospital circumvented the union, but not specifically because of its nondisclosure and nondisparagement provisions.Under Mr. Biden’s appointees, the labor board has moved relatively quickly to reinstate workers who it determines have been fired illegally. It has also issued rulings effectively expanding the financial remedies available to such workers and making it easier for a subset of employees within a workplace to unionize. More

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    Judge Finds Amazon Broke Labor Law in Anti-Union Effort

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    The ruling, on charges brought by the National Labor Relations Board, involved actions at two Staten Island warehouses before union votes last year.Amazon violated labor law in advance of unionization elections last year at two warehouses on Staten Island, a federal administrative judge has ruled.The judge, who hears cases for the National Labor Relations Board, ruled on Monday that Amazon supervisors had illegally threatened to withhold wage and benefit increases from employees at the warehouses if they voted to unionize. The judge, Benjamin W. Green, also ruled that Amazon had illegally removed posts on a digital message board from an employee inviting co-workers to sign a petition being circulated by the Amazon Labor Union. The union sought to represent workers at both warehouses.The ruling ordered Amazon to stop the unfair labor practices and to post a notice saying it would not engage in them.In the same ruling, the judge dismissed several accusations brought in a complaint by the labor board’s prosecutors, including charges that Amazon indicated take-home pay would fall if workers unionized; that Amazon promised improvements in a program that subsidizes workers’ educational expenses if they chose not to unionize; and that Amazon indicated that workers would be fired if they unionized and failed to pay union dues.The judge found that these accusations were either overstated or, in the final instance, that the action was not illegal.Amazon can appeal the ruling to the labor board in Washington.“We’re glad that the judge dismissed 19 — nearly all — of the allegations in this case,” Mary Kate Paradis, an Amazon spokeswoman, said in a statement, adding: “The facts continue to show that the teams in our buildings work hard to do the right thing.”The union declined to comment.The violations occurred at a vast Amazon warehouse known as JFK8, where workers voted to unionize in an election whose results were announced in April, and at a smaller, nearby warehouse known as LDJ5, where workers voted down a union the next month.In the weeks before the elections, Amazon summoned employees at the warehouses to dozens of anti-union meetings at which supervisors questioned the credibility of the Amazon Labor Union, emphasized the costliness of union dues and warned that workers could end up worse off under a union.The judge’s ruling set aside a broader question brought by labor board prosecutors: whether employers can force workers to attend such meetings.The meetings are legal under labor board precedent and common among employers facing union campaigns. But the board’s general counsel, Jennifer Abruzzo, has argued that the precedent is in tension with federal labor law and had sought to challenge it.Judge Green concluded that he lacked the authority to overturn the precedent. “I am required to apply current law,” he wrote. Ms. Abruzzo’s office can file an appeal asking the labor board in Washington to overturn the precedent. More

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    U.S. Moves to Bar Noncompete Agreements in Labor Contracts

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    A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival.In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees’ ability to work for a rival.The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hairstylists, doctors and software engineers.Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of U.S. workers in the private sector, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades.Other studies show that noncompetes protect established companies from start-ups, reducing competition within industries. The arrangements may also harm productivity by making it hard for companies to hire workers who best fit their needs.The F.T.C. proposal is the latest in a series of aggressive and sometimes unorthodox moves to rein in the power of large companies under the agency’s chair, Lina Khan.President Biden hailed the proposal on Thursday, saying that noncompete clauses “are designed simply to lower people’s wages.”“These agreements block millions of retail workers, construction workers and other working folks from taking a better job, getting better pay and benefits, in the same field,” he said at a cabinet meeting.The public will be allowed to submit comments on the proposal for 60 days, at which point the agency will move to make it final. An F.T.C. document said the rule would take effect 180 days after the final version was published, but experts said it could face legal challenges.The agency estimated that the rule could increase wages by nearly $300 billion a year across the economy. Evan Starr, an economist at the University of Maryland who has studied noncompetes, said that was a plausible wage increase after their elimination.Dr. Starr said noncompetes appeared to lower wages both for workers directly covered by them and for other workers, partly by making the hiring process more costly for employers, who must spend time figuring out whom they can hire and whom they can’t.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.He pointed to research showing that wages tended to be higher in states that restrict noncompetes. One study found that wages for newly hired tech workers in Hawaii increased by about 4 percent after the state banned noncompetes for those workers. In Oregon, where new noncompetes became unenforceable for low-wage workers in 2008, the change appeared to raise the wages of hourly workers by 2 percent to 3 percent.Although noncompetes appear to be more common among more highly paid and more educated workers, many companies have used them for low-wage hourly workers and even interns.About half of states significantly constrain the use of noncompetes, and a small number have deemed them largely unenforceable, including California.But even in such states, companies often include noncompetes in employment contracts, and many workers in these states report turning down job offers partly as a result of the provisions, suggesting that these state regulations may have limited effects. Many workers in those states are not necessarily aware that the provisions are unenforceable, experts say.“Research shows that employers’ use of noncompetes to restrict workers’ mobility significantly suppresses workers’ wages — even for those not subject to noncompetes, or subject to noncompetes that are unenforceable under state law,” Elizabeth Wilkins, the director of the F.T.C.’s office of policy planning, said in a statement.The commission’s proposal appears to address this issue by requiring employers to withdraw existing noncompetes and to inform workers that they no longer apply. The proposal would also make it illegal for an employer to enter into a noncompete with a worker or to try to do so, or to suggest that a worker is bound by a noncompete when he or she is not.The proposal covers not just employees but also independent contractors, interns, volunteers and other workers.Lina Khan, the F.T.C. chair, has tried to use the agency’s authority to limit the power and influence of corporate giants.Graeme Sloan, via Associated PressDefenders of noncompetes argue that employees are free to turn down a job if they want to preserve their ability to join another company, or that they can bargain for higher pay in return for accepting the restriction. Proponents also argue that noncompetes make employers more likely to invest in training and to share sensitive information with workers, which they might withhold if they feared that a worker might quickly leave.A ban “ignores the fact that, when appropriately used, noncompete agreements are an important tool in fostering innovation,” Sean Heather, a senior vice president at the U.S. Chamber of Commerce, said in a statement.At least one study has found that greater enforcement of noncompetes leads to an increase in job creation by start-ups, though some of its conclusions are at odds with other research.Dr. Starr said that noncompetes did appear to encourage businesses to invest more in training, but that there was little evidence that most employees entered into them voluntarily or that they were able to bargain over them. One study found that only 10 percent of workers sought to bargain for concessions in return for signing a noncompete. About one-third became aware of the noncompete only after accepting a job offer.Michael R. Strain, an economist at the American Enterprise Institute, said that while there were good reasons to scale back noncompetes for lower-wage workers, the rationale was less clear for better-paid workers with specialized knowledge or skills.“If your job is to make minor tweaks to the formula for Coca-Cola and you’re one of 25 people on earth who knows the formula,” Dr. Strain said, speaking hypothetically, “it makes total sense that Coca-Cola might say, ‘We don’t want you to go work for Pepsi.’”He said that it might be possible to satisfy an employer’s concerns with a less blunt tool, like a nondisclosure agreement, but that the evidence for this was lacking.In a video call with reporters on Wednesday, Ms. Khan said she believed the F.T.C. had clear authority to issue the rule, noting that federal law empowers the agency to prohibit “unfair methods of competition.”But Kristen Limarzi, a partner at Gibson, Dunn & Crutcher who previously served as a senior official in the antitrust division of the Justice Department, said she believed such a rule could be vulnerable to a legal challenge. Opponents would probably argue that the relevant federal statute is too vague to guide the agency in putting forth a rule banning noncompetes, she said, and that the evidence the agency has on their effects is still too limited to support a rule.At the helm of the F.T.C. since last year, Ms. Khan has tried to use the agency’s authority in untested ways to rein in the power and influence of corporate giants. In doing so, she and her allies hope to reverse a turn in recent decades toward more conservative antitrust law — a shift that they say enabled runaway concentration, limited options for consumers and squeezed small businesses.Ms. Khan has brought lawsuits in recent months to block Meta, Facebook’s parent company, from buying a virtual reality start-up and Microsoft from buying the video game publisher Activision Blizzard. Both cases employ less common legal arguments that are likely to face heavy scrutiny from courts. But Ms. Khan has indicated she is willing to lose cases if the agency ends up taking more risks.Ms. Khan and her counterpart at the Justice Department’s antitrust division, Jonathan Kanter, have also said they want to increase the focus of the nation’s antitrust agencies on empowering workers. Last year, the Justice Department successfully blocked Penguin Random House from buying Simon & Schuster using the argument that the deal would lower compensation for authors.One question looming over the discussion of noncompetes is what effect banning them may have on prices during a period of high inflation, given that limiting noncompetes tends to raise wages.But the experience of the past two years, when rates of quitting and job-hopping have been unusually high, suggests that noncompetes may not currently be as big an obstacle to worker mobility as they have traditionally been. Partly as a result, banning them may not have much of a short-term effect on wages.Instead, some economists say, the more pronounced effect of a ban may come in the intermediate and long term, once the job market softens and workers no longer have as much leverage. At that point, noncompetes could begin to weigh more heavily on job switching and wages again.“Doing something like this is a way to help sustain the increase in worker power over the last couple of years,” said Heidi Shierholz, president of the liberal Economic Policy Institute, who was chief economist at the Labor Department during the Obama administration.David McCabe More