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The Worm in the Coffee Bean: Starbucks' Union-busting, Greenwashing Tactics and the Corporate Social Responsibility Movement

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A few days after putting up my post "Starbucks and the White Whale" -- a reflection on Starbucks' ambition to become a cultural taste-maker -- I received an email from Daniel Gross, a Starbucks union-organizer in New York, pointing out some facts I had got wrong. I had said that "most of Starbucks' employees work part-time." In fact, all of Starbucks' retail employees work part-time (the company includes management in its statistics), with no guarantee even of the twenty hours needed to stay on the company's part-time worker health plan. I had compared Starbucks favorably to WalMart, but a little research revealed that in the area of insurance Starbucks fell short of WalMart, insuring only 42% of its workers (this figure also includes management), against WalMart's 47%.

Even more alarming is Starbucks' union-busting policies. Starbucks new CEO Jim Donald hails from -- you guessed it -- WalMart, as well as Safeway, companies famous for playing hard-ball against unions, and he seems to have imported similar hard-scrabble tactics to the running if Starbucks.

The IWW recently won a settlement against Starbucks from the National Labor Relations Board in response to charges against the company for illegal union-busting policies, including firing workers for union activity. In this agreement, Starbucks admitted no guilt but agreed to the following:

"NOT TO issue adverse performance reviews or deny pay increases to our employees in order to discourage them from joining or supporting Industrial Union 660."

"NOT TO provide employees with free pizza, free gym passes and free baseball tickets in order to encourage employees to withdraw their support for Industrial Union 660"

"NOT TO create the impression among their employees that their union activities are under surveillance or engage in surveillance of employees."

It is not hard to read between the lines of this settlement to figure out what the company did do. It is also not hard to understand why. The presence of a union hurts Starbucks' "progressive" brand by implying that its workers have grievances. The company's official line is that it is already committed to the well-being of its "partners." Why join a union, it tells its employees, when we're looking out for you?

This "noblesse oblige" argument that a corporation can internalize a feeling of obligation toward its workers -- as well as toward the environment -- and regulate itself, is at the heart of the "Corporate Social Responsibility" movement or C.S.R.. The gigantic turnout for the Social Responsibility Conference in New York last week shows just how mainstream C.S.R. has become. The conference included representatives from Chevron, J.C. Penny, Pfizer, McDonalds, Ford Motor, Exxon Mobil and, of course, Starbucks.

Starbucks has long been at the forefront of the C.S.R. movement. The company donates to military personnel, offers community building programs, claims a commitment to sustainable agriculture and to the rights of foreign workers. "More than our logo is green," goes the slogan. Critics complain that Starbucks engages in "green-washing," offering only a minuscule percentage of certified Fair Trade coffee -- and only after public lobbying from human rights organization Global Exchange -- and an even smaller percentage of coffee derived from sustainable coffee farming. They bring up union-busting and low wages. The company's supporters bring up insurance and the fact that the company supports fair trade at all, which goes against its bottom line. They say Starbucks does what it can, balancing a desire to be socially responsible with a need to compete in global markets.

Who's right? Is Starbucks a good corporate citizen -- or a lousy one?

To understand this notion of corporate citizenship, we need to consider the history of the corporation. The first corporations were chartered by the government to accomplish public works requiring pooled capital. The Massachusetts Bay Company was one of these, charged with colonizing the New World. By the early 19th century, American corporations formed to build factories with no long-term goal beyond the accumulation of wealth. The Supreme Court, under John Marshall, protected these new capitalist collectives against state regulation by invoking the "obligation of contracts" clause in the constitution, which states that "no state shall pass any law impairing the obligation of contracts." 1886 brought a landmark decision that still affects our thinking about corporations. In the case of Santa Clara County vs. Southern Pacific railroad, the court defined corporations as "persons" and ruled that they deserved the same protections of "life, liberty and property" accorded citizens under the 14th amendment. The legal metaphor persists to this day under the term "corporate personhood," and contributes to a confusion in America between democracy and capitalism.

A confusion Starbucks exploits when it invokes its good intentions against a need for oversight. Corporations are not people, despite the court's attempt to personify them. A corporation does not have feelings or good intentions, or a conscience, for that matter. It lacks empathy, and no P.R. department or Corporate Responsibility program can substitute for this quintessentially human check on selfishness. Corporations are not evil. But they are not good either. Moral terms do not apply because corporations are not human. Is Starbucks a good corporate citizen? Of course not. It is not a citizen at all. The argument that Starbucks' workers do not need to unionize because the company has their interests in mind presupposes that it has a mind in the first place -- which it doesn't.

Corporations are powerful engines of growth, but we make a grave error when we assign human qualities to them. C.P.R. programs prove that external pressures work. But they do not indicate some intrinsic corporate goodness that should encourage us to let up our guard.