Starbucks Workers United Prepares For ‘Red Cup Rebellion’ Strike

Starbucks’ annual “Red Cup Day” promotion is typically a day of celebration, kicking off the festive holiday season. Customers line up to receive a free reusable cup when they purchase a holiday drink and the company enjoys a surge in sales. Last year, the Wall Street Journal reported it was the company’s best sales day ever.

Baristas are prepared to form picket lines in protest of the company’s failure to reach a contract agreement.

The strike could impact stores in approximately 25 cities and is described as an “opening salvo” that could escalate if the company doesn’t finalize an acceptable contract. While the company expects minimal disruption to customers should a strike occur – fewer than 1% of its approximately 18,000 company-owned and licensed stores are unionized – SWU has formed a strong coalition of supporters. Over 100 members of Congress have signed a letter urging Starbucks CEO Brian Niccol to end the dispute. If nothing else, the symbolically-named “Red Cup Rebellion” strike threatens to become a PR “nightmare before Christmas.”

Unfair Labor Practice Allegations

SWU is framing the strike around alleged unfair labor practices that it claims are part of a systematic effort to suppress unionization.

“We have heard of a troubling return to union busting, which has impeded the ability of Starbucks workers –many of whom are our constituents – to exercise their statutory and constitutional right to organize,” wrote Senator Bernie Sanders in the letter signed by 26 U.S. Senators.

In an accompanying letter signed by 82 members of the House, Representative Pramilla Jayapal of the House Labor Caucus, wrote, “We urge Starbucks to end its union busting and bargain in good faith to reach a fair contract with its employees.”

However, Starbucks has wind at its back regarding its union dealings after it won a favorable Supreme Court ruling in June 2024. The Court determined that seven Memphis employees were lawfully terminated during unionization efforts. The company maintains a website, one.starbucks.com, that details its union policies.

Unresolved ULPs

Nonetheless, the union maintains over 700 ULP charges remain unresolved, including more than 125 filed since January 2025, around bad faith bargaining, retaliatory firings and discipline and unilateral policy changes, such as a new dress code policy implemented in May requiring baristas to wear solid black tops and black, khaki, or blue denim bottoms.

SWU claimed the policy change “materially differed from both the status quo and what the parties had tentatively agreed to at the bargaining table, thus undermining the Union’s representational status, unilaterally changing terms and conditions of employment, and improperly moving the goalposts for collective bargaining.”

All in all, resolving the outstanding ULP allegations hasn’t been helped by the government shutdown. Even after it opens, the National Labor Relations Board will remain without a quorum for voting, as two Trump administration nominees await final Senate confirmation, and another nominee was rejected by the Senate panel.

Positive Sentiment For Unions Growing

By keeping the focus on unfair labor practices, SWU gains an edge among a growing contingent of customers that side with the workers and favor unionization efforts. An August survey conducted by Pew Research found that a majority of Americans believe the decline in union representation – dropping by half from 20% of workers in 1983 to 10% in 2024 – is bad for working people (62%) and bad for the country (60%).

Notably, the biggest shift has been among Democrats and Democrat-leaning independents. In the most recent survey, 82% of Democrats said a decline in unionization has been bad for the country, up from 69% in 2024, and 85% said it has been bad for working people, up from 74% in 2024.

As for the company, it is officially mum on the ULP allegations, including the SWU claims that Starbucks is the “biggest violator of labor law in modern history.” The fact is any worker can file a ULP with the NLRB at any time, and the sheer number of ULPs filed does not necessarily indicate the validity of the complaint until it goes before an Administrative Law Judge for a ruling.

As it stands, aggrieved workers can flood the zone with complaints, amplifying their message and potentially swaying public opinion against the company.

Salary Demands

While the SWU maintains its focus on the company’s alleged unfair labor practices, Starbucks shines the light on its favorable barista pay and benefit package. “Starbucks already offers the best job in retail, including more than $30 an hour on average in pay and benefits for hourly workers,” shared Jaci Anderson, Starbucks director of global communications.

She added that Starbucks enjoys employee turnover that is half the industry’s average and that it receives over one million job applications a year. “The facts show people like working at Starbucks,” she said.

The New Math Of Pay And Benefits

The union contends that bundling hourly pay with benefits does not compute in the real world, especially since many workers don’t meet the 20-hour-per-week minimum to qualify for benefits. SWU also claims the company offered a 2% hourly increase per year.

Starting barista pay averages just over $15 per hour, which is in sharp contrast to the $96 million that CEO Niccol raked in after only four months of work. While most of that was in stock, he still receives a $1.6 million annual salary plus an annual cash bonus ranging from $3.6 million to $7.2 million depending on performance – and much of his performance hinges on the baristas’ work.

According to a SWU spokesperson, the union presented Starbucks with a menu of pay options to choose from, which the company described as “pay increases of 65% immediately and 77% over three years with additional payments on top of this.” The added payments would be related to different aspects of baristas’ work, such as extra pay when opening and closing the store.

However, the union said that “Starbucks is disingenuously adding all of them together and presenting it as one demand.” Effectively, it was like taking all the prices on a restaurant menu, adding them up, and presenting the total as a single number.

Starbucks Still Underperforming

While the SWU pay-option menu has not been made public, the union stated that its proposed contract would cost Starbucks less than one average day’s sales. That may be, but fewer than 4% of Starbucks baristas – about 9,500 in total – are represented by the union. Therefore, the cost to share a comparable pay package across the company’s entire crew of over 200,000 baristas would cost the company a whole lot more.

Starbucks is currently implementing a $1 billion “Back to Starbucks” restructuring plan that includes more than $500 million invested in improving store staffing, training and support. Yet it also meant closing 520 U.S. stores in the fourth quarter, including 59 unionized stores, and displacing an unknown number of workers.

In fiscal 2025, ended on September 28, double-digit increases in store operating expenses, depreciation and amortization, and general and administrative expenses, along with a $653 million restructuring charge, drove North American operating income down by over 40%, from $5.4 billion last year to $3.2 billion this year.

Store operating expenses as a percentage of company-operated store revenues rose from 51.4% last year to 56.4% this, while comparable sales declined by 2%, driven by a 4% shortfall in comparable transactions, which was partially offset by a 2% increase in average ticket.

Net/Net: until Starbucks drives significant topline revenue growth – North American revenues advanced 1.3% in 2025, from $27 billion to $27.4 billion – it’s going to have a hard time squeezing out a more generous pay package for its green-apron brigade.

Negative publicity resulting from a strike is not going to be much help in attracting new customers and bringing back disaffected ones.

“The looming reality of a Starbucks strike threatens to turn a potentially positive Red Cup Day into another negative news story day for CEO Brian Niccol,” observed Stephen Hahn, chief reputation and strategy officer at corporate reputation consultancy, RepTrak.

Improved Store Staffing

Despite the company’s $500 million investment to improve store operations by adding more staff to the roster, especially during busy shifts, SWU claims that it’s not seeing the benefits in stores.

“Understaffing is rampant, leading to longer wait times as customer orders stream in,” it said, pointing to survey of 737 current Starbucks baristas and shift supervisors conducted by the SWU in association with the Strategic Organizing Center. The survey found that over 90% had experienced understaffing at their stores in the past three months and that these staffing issues resulted in longer wait times for customers.

The baristas’ survey findings were confirmed by a Nielsen survey among 3,000 Starbucks customers in August and reported by the SOC. About one-third of customers said they’d had a negative Starbucks experience, with long-wait times in-store and at the drive-thru being the chief issue. In particular, more than three in four Starbucks customers who reported issues said that long wait times have remained the same or worsened since the spring of 2025

Obviously, the kind of turnaround that CEO Niccol is tasked with accomplishing will take some time, possibly years, but the pressure is on. To do it, he needs both his employees and customers on his side.

Negative publicity from a strike could make matters worse, despite company assurances that the union’s plans will not disrupt the vast majority of company-owned and licensed stores over the holiday season.

Pressure Building

Starbucks says it is ready to talk as soon as the union is ready to return to the negotiating table. That the contract dispute has extended into this holiday season is regrettable for all parties, especially after the previous CEO, Laxman Narasimhan, had promised to finalize a contract agreement by the end of 2024.

That deadline went out the window after Niccol joined the company last September. Since then, the union-company relationship seems to have become more contentious.

“It’s not been a banner a year for the reputation of Starbucks – the continuation of a negative news cycle will further erode pervasive feelings of trust and benefit of doubt associated with Starbucks,” shared RepTrak’s Hahn.

Sensing that Starbucks’ corporate sentiment is more Scrooge-like ‘bah humbug’ than holiday cheer and well wishes, he said, “If at all possible, it would seem to be in the best interests of Starbucks management to reach an amicable, expedient, and mutually beneficial settlement with the Starbucks United Workers.

“It’s time for Starbucks to put all the unfavorable news coverage behind it – and to get back to fulfilling its mission – in bringing people together and nurturing the human spirit, one cup of coffee at a time.”