Chief economist Brian Callaci praises members of the Starbucks Workers United for their courageous fight in the union campaign against the chain by demanding legal rights under the National Labor Relations Act (NLRA)

On February 27, after over two years of gutsy and strategic organizing, Starbucks Workers United forced Starbucks to surrender to its workers’ wishes and recognize their legal right to a union under the National Labor Relations Act (NLRA). The baristas’ union and the company have agreed to a national framework for contract bargaining and for recognizing the wishes of workers at non-union stores to join the union. Earlier that month, after twelve years of similarly courageous fighting, workers in another union campaign against chain restaurants, Fight for $15, celebrated a different kind of victory: the creation of a tripartite Fast Food Council—bringing together workers, industry, and government—that will regulate wages in the fast food industry in California. The sector-wide minimum wage of $20 per hour went into effect on April 1.

While Starbucks workers still have a long way to go to win a good contract and organize thousands of remaining non-union stores, they have already achieved what in recent decades has been nearly impossible: unionizing a large national corporation from scratch under federal labor law. It seems that for employees of corporations like Starbucks, the NLRA still functions, barely, if the conditions are just right.

By contrast, the Fast Food Council was created entirely outside of federal labor law. In the years leading up to the council’s creation, the SEIU-led Fight for $15 won major gains for fast food workers. It transformed public policy around the minimum wage and secured massive legislative wage gains for millions of workers, and it is now setting up an entire wage-regulation apparatus, including worker representation, in the state of California. Yet all this was achieved without winning an NLRB-certified union election or bargaining a contract at a single fast-food restaurant.

Why were Starbucks workers able to unionize under federal labor law, while those at Dunkin’ Donuts were not? One key reason is that, unlike Dunkin’ Donuts or most other fast-food chains, Starbucks is vertically integrated, meaning the parent brand owner also directly owns and operates the restaurants. This gives the union a single corporate entity to target for organizing, to pressure for demands, and to hold accountable in the eyes of the public and the law. Of course, U.S. labor protections being what they are, Starbucks workers still had to rely on tactics outside the formal machinery of the National Labor Relations Board (NLRB) to bring Starbucks to the table. These included campaigning for board seats and working with college students to get Starbucks off campuses. Yet for all that, the result will still be a union contract between one union and one employer, bargained under the auspices of the NLRB.

Meanwhile, most of the chain restaurants targeted by Fight for $15 are franchised. This allows Dunkin’ Donuts to insist that its workers are actually employed not by the corporation itself, but by the thousands of independent franchisees who own and operate its restaurants—and therefore Dunkin’ has no duty to recognize or bargain with any union. Corporate franchisers like Dunkin’ minutely control every aspect of the franchisees’ business to make them all look and feel the same, and they siphon off a generous share of the franchisee profits that unions would target to fund wage increases. This separation of legal employment status from economic power and control throws up all but insurmountable barriers to workers trying to unionize their franchised chains under federal labor law.

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