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Unionization push at Canadian Starbucks gaining steam but facing similar barriers to U.S. efforts

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Unionization among Canadian Starbucks employees is starting to gain traction, organizers say, but much like their U.S. counterparts, workers face barriers and alleged anti-union activity by the coffee giant.

More than a year before the recent wave of Starbucks unionization in the U.S. began, a store in Victoria unionized with the United Steelworkers in August 2020 — and workers across the country took note.

Now, there are six unionized locations across B.C. and Alberta, and organizers say there are more in the works.

“I think the pandemic has caused people to look at their lives, their work, their community in a bit of a different way,” said Scott Lunny, USW’s director for Western Canada.

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Since late last year, more than 250 stores south of the border have voted to unionize, according to the U.S. National Labor Relations Board.

But a successful certification vote is just one step in unionizing; workers don’t start paying dues until a contract has been negotiated. And though contract talks with some U.S. stores have begun, no agreements have been reached, The Associated Press has reported.

Last Thursday, workers at more than a hundred U.S. stores went on strike for the day to protest working conditions.

That makes the Victoria store the only location in North America to have a collective agreement with the company.

In some cases, stores in the same geographical area could organize in clusters as one bargaining unit, said Lunny. That’s what happened for two stores in Surrey and Langley, B.C., which successfully certified as one bargaining unit. In Lethbridge, Alta., five stores held an unsuccessful certification vote.

Demonstrators protest outside a closed Starbucks location in Seattle this summer. Hundreds of the coffee chain’s locations in the U.S. have faced union drives in recent months. (David Ryder/Bloomberg)

Lunny said service workers broadly have become interested in unionization over the pandemic and especially in recent months amid higher inflation.

In deciding to unionize, the Victoria workers wanted more support regarding harassment by customers and clearer communication about COVID-19 practices, said shift supervisor and union representative Sarah Broad.

Broad said she’s noticed a big difference since the contract was ratified, with “tenfold” improvements in health and safety. The workers also got wage increases.

But it hasn’t been all smooth sailing. Earlier this year, Starbucks said it would give workers across Canada and other jurisdictions raises and other improvements. However, Broad said a letter was posted in the back room of the Victoria store explaining they wouldn’t be getting the raise because of the union contract.

Starbucks spokeswoman Carly Suppa said in an email this is because the Victoria store’s contract includes annual wage increases.

USW filed a labour complaint on behalf of the Victoria store. It’s one of several labour complaints filed by the union on behalf of Starbucks stores, said Lunny, one of which — accusing the company of disciplining a union organizer in Lethbridge — is still active.

Starbucks workers at a location in Buffalo react as the vote tallies are announced in the location’s vote to unionize. (Joshua Bessex/The Associated Press)

Workers in the U.S. have also been facing alleged anti-union activity, with the labour relations board asking a federal court to intervene in instances where Starbucks fired union organizers.

Suppa said Starbucks has never disciplined an employee for engaging in lawful union activity in the U.S. or Canada.

The raise announced in May was also implemented in the U.S., except for those who voted to unionize or petitioned to hold a union election, The Associated Press reported in May.

In a statement posted to one.starbucks.com, a Starbucks website launched in February, the company said U.S. labour law restricts the improvements it can make to wages and benefits during the unionization process and when a store has unionized, but said the recent improvements will likely be negotiated at the bargaining table.

 

Unionizing efforts come to Starbucks, food service workers

Starbucks is the latest major food service company to see unionizing efforts spread across Canada recently.

York University labour law professor David J. Doorey said while Starbucks’ position has some legal basis under U.S. labour law, it’s also possible the labour board will see the company’s actions as unlawful reprisal for unionizing.

USW’s Lunny said he believes Starbucks always had the capacity to pay higher wages and invest more in health and safety, but “they really didn’t get around to it until there was a threat of unionization.”

“I do think (the raises are) about preventing unionization.”

Suppa said the company continues to invest in wages, benefits, policies, safety and training, and said Starbucks believes it can do more for its employees by working side-by-side instead of across a negotiating table.

On the Canadian version of its informational website, launched in July, the company urges workers to do research before signing a union card and says that if certified, workers will no longer be able to address their concerns with the company directly.

Starbucks workers in Central Canada are also interested in unionization but high turnover has been a barrier to successful drives, said Darlene Jalbert, the organizing co-ordinator for Ontario and Atlantic Canada.

It’s easier to certify in B.C. and some other jurisdictions, said economist and labour expert Jim Stanford, because they have “one-step” certification where a certain majority of signatures counts as certification.

In Alberta and Ontario, signatures are just a first step — the vote to certify can happen days, weeks or even months later, he said.

Sector is notoriously hard to unionize

Starbucks is a mix of corporate-run locations and licensed locations, such as the ones in grocery stores. There are almost 1,000 corporate locations in Canada and almost 500 licensed locations, where the employer is not Starbucks but the licensing company.

Stanford said hospitality is difficult to unionize — and keep unionized — in part because of turnover, but also because of the often-fragmented nature of companies like Starbucks, including the mix of corporate and licensed stores.

Though the Victoria store was the only unionized one in Canada when it certified, there were a handful of unionized Starbucks locations in the past.

Stanford said though Starbucks employees are getting a lot of attention for their efforts, workers across all industries are turning to unions in the wake of the pandemic.

Broad said she thinks the movement in the U.S. is helping fuel interest in Canada.

“I’m really hoping to see it spread across all of the provinces. And just for it to be more of a norm.”

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DoorDash laying off 1,250 people, about 6% of its workforce – CBC News

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DoorDash Inc. said on Wednesday it was cutting about 1,250 jobs, or six per cent of its total workforce, as the food-delivery company looks to keep a lid on costs to cope with a slowdown in demand.

DoorDash went on a hiring spree to cater to a flood of orders from people stuck at home during the height of the pandemic, but a sudden drop in demand from inflation-wary customers has left the company grappling with ballooning costs.

“We were not as rigorous as we should have been in managing our team growth … That’s on me. As a result, operating expenses grew quickly,” chief executive Tony Xu said in a memo to employees that was posted on the company’s website.

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“Given how quickly we hired, our operating expenses — if left unabated — would continue to outgrow our revenue.”

DoorDash has about 20,000 employees worldwide, and “some of the affected employees are based in Canada,” the company told CBC News in a statement, without elaborating.

The company joins a growing list of technology firms, including Amazon, Facebook-owner Meta, Twitter, Shopify and others that have laid off thousands of employees in recent weeks as they brace for a potential economic downturn.

British food delivery company Deliveroo said in late October that sales growth would be at the lower end of its previous forecast. In September, Winnipeg-based food delivery app SkipTheDishes laid off 350 workers.

Earlier this month, DoorDash reported a bigger-than-expected quarterly net loss of $295 million US, raising questions about the growth prospect of delivery firms as economies reopen. The company’s shares have lost two thirds of their value this year.

“Greater emphasis on its cost structure is a welcoming sign, especially given the potential for consumer spending to deteriorate faster than expected,” said Angelo Zino, analyst at CFRA Research.

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'I didn't ever try to commit fraud on anyone,' FTX founder Sam Bankman-Fried says – CBC News

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The man at the centre of collapsed cryptocurrency exchange FTX made his first public appearance since the saga began, telling a New York audience on Wednesday that it was never his intention to commit fraud.

Sam Bankman-Fried, the 30-year-old founder of FTX, appeared at the New York Times’ Dealbook Summit on Wednesday, for an interview with journalist Andrew Ross Sorkin about what happened to cause his cryptocurrency firm to collapse into bankruptcy earlier this month.

The firm, once worth more than $32 billion US, entered bankruptcy protection on Nov. 11 after a whirlwind series of days that saw it go from trying to solve a liquidity crunch by merging with a rival, to having that deal fall apart and succumbing to a run on the bank as traders pulled out $6 billion in funds within three days.

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Filings show the company owes almost $10 billion to various creditors, and at least $1 billion worth of customer deposits are missing. 

Among numerous allegations, customer deposits at FTX appear to have been used as capital and collateral for loans for an investment firm called Alameda affiliated with him — an allegation that amounts to fraud, and one that he pushed back against strongly.

‘Deeply sorry’ 

“I didn’t ever try to commit fraud on anyone,” he told Sorkin, “I didn’t knowingly co-mingle funds.”

While he acknowledged mistakes were made, Bankman-Fried rejected repeated attempts to characterize what happened at his cryptocurrency firm as being in any way malicious or illegal.

“I am deeply sorry about what happened,” he said. “I was excited about the prospects of FTX a month ago, I saw it as a thriving, growing business.”

Bankman-Fried has seen his personal net worth evaporate in the debacle, from more than $26 billion a year ago to “close to nothing” today — and he insisted that he doesn’t have any of the money that has vanished.

“I don’t have any hidden funds here. Everything I have, I am disclosing,” he said. 

“I’m down to one working credit card … [and] hundreds of dollars or something like that, in a bank account.”

WATCH | Former regulator weighs in on FTX debacle: 

Former regulatory executive weighs in on FTX collapse

19 days ago

Duration 4:04

Charley Cooper, a former executive at commodities regulator the CFTC, says the collapse of FTX is a good lesson of the inherent dangers of the cryptocurrency space.

He says, to his knowledge, there are enough funds at FTX to give users their money. But his hands are tied since he no longer has a formal role at the company since it entered bankruptcy proceedings.

“I believe that withdrawals could be opened up today and everyone could be made whole,” he said.

John Jay Ray III, the restructuring expert who has been handling FTX’s bankruptcy proceedings has said in legal filings that Bankman-Fried appears to have treated the company as his “personal fiefdom” and has called the fiasco a “complete failure of corporate controls.”

Bankman-Fried has been active on Twitter since the debacle first started, but his appearance on Wednesday marks his first public appearance since the saga began.

There was speculation he was going to appear in person, but ultimately he appeared via video link from the Bahamas, where he lives.

Legal problems

Sorkin asked Bankman-Fried if he did not appear in person because he is worried about being within the reach of U.S. agencies including the Department of Justice and the Securities and Exchange Commission, both of which are probing what happened at FTX.

Bankman-Fried appeared to side-step that question, remarking instead that, to his knowledge, he can still legally enter the U.S. 

“I’ve seen a lot of the hearings that have been happening [and] would not be surprised if some time I am out there talking about what happened,” he said, adding that he “does not personally think” he has any criminal liability to worry about.

That being said, he said his legal team is “very much not” supportive of his decision to appear at the summit and speak publicly about what happened at FTX. His lawyers advice was “to recede into a hole,” he joked.

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Investors focus on Powell's comments which put gold back into rally mode – Kitco NEWS

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Today gold futures are trading solidly higher as market participants react to Chairman Jerome Powell’s speech at the Hutchings Center on Fiscal and Monetary Policy, held at the Brookings Institution in Washington. Market participants focused intently on his remarks which alluded to a dynamic change in the Federal Reserve’s monetary policy.

“Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down … The time for moderating the pace of rate increases may come as soon as the December meeting.”

However, it must be noted that the reaction by investors at large seems to focus on what they had hoped to hear which is the Fed will begin to raise rates at a slower pace rather than his nuanced message that the time required for the Federal Reserve to achieve their goal will take much longer.

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“It is likely that restoring price stability will require holding policy at a restrictive level for some time … History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”

As of 6:16 PM EST gold futures basis of the most active February, 2023 Comex contract is fixed at $1784.60 After factoring in today’s double-digit advance comprised of dollar weakness, buyers in the market along with the rollover from the December to February contract month.

Chairman Powell’s speech today diminished the concern of investors as they reacted to other members of the Federal Reserve who have been extremely vocal about upcoming interest rate hikes. Specifically, recent remarks by James Bullard underscored the hawkish intent of the Federal Reserve. Last week he commented on the need for the Federal Reserve’s benchmark rate to go as high as 7% to deal with inflation. This week he said that “the Federal Reserve will likely need to keep its benchmark policy rate north of 5% for most of 2023 and into 2024 to succeed in taming inflation.”

Chairman Powell’s statements were not in conflict in any way with those made earlier by James Bullard and other members of the Federal Reserve in his prepared speech. However, the chairman was able to deliver this message in a much softer tone. Chairman Powell in essence cemented a 50-basis point rate hike at the December FOMC meeting. However, he stressed that slowing the pace of rate hikes would require that the Fed maintains a restrictive monetary policy for a longer period.

Gold’s recent rally from $1621 to just shy of $1800 is a reflection of a major change in the market sentiment of investors. It suggests that investors are focusing intently on inflation and that lowering inflation to restore price stability will be a multi-year process.

For those who would like more information simply use this link.

Wishing you as always good trading,

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