By Starbucks has been battling the National Labor Relations Board on numerous fronts over the last few years.
There was the famous Supreme Court case decided in June 2024, which involved seven Memphis employees fired after they broke company policy by inviting media to their store location to announce their unionization effort. (The high court unanimously sided with Starbucks.)
There was the NLRB’s effort to make Starbucks reopen 23 cafés the corporation had closed, alleging the action was anti-union. (A strange action, but one not without precedent, and it remains ongoing.)
And then there’s the NLRB’s effort to make Starbucks rehire and compensate a pair of fired workers who secretly recorded their supervisors dozens of times, a case that was recently heard by a federal appeals court.
Secretly Recording Coworkers (and Customers)
In June 2021, the NLRB ruled that Starbucks unlawfully fired Echo Nowakowska and Tristan Bussiere, two Philadelphia baristas who in 2019 launched a campaign to organize a citywide union.
Starbucks maintained it fired Nowakowska because she was a bad worker and treated customers poorly. Bussiere was fired, the company said, after spreading a false rumor that another employee was set to be fired. (Both firings occurred in early 2020.)
Administrative Law Judge (ALF) Andrew Gollin sided with the workers. He ordered Starbucks to reinstate the two employees, compensate them for lost wages, and pay expenses stemming from their firings.
Starbucks disagreed with the verdict, and the company took the NLRB to court.
On Friday, the 3rd US Circuit Court of Appeals mostly ruled in favor of NLRB, stating that “substantial evidence supports the Board’s unfair-labor-practice conclusions” and upholding its order of reinstatement and back pay (though the court ruled that NLRB overstepped its authority by directing Starbucks to cover the baristas’ predictable expenses resulting from their terminations).
The phrase “unfair labor practice” is a squishy phrase for a court of law. And while it’s unclear if Nowakowska and Bussiere were fired for union activities (as they and the NLRB contend) or for being poor employees (as Starbucks contended), one point is not disputed by the court or the ALJ: the workers were secretly recording people at work.
In their court filing, Starbucks alleged that Nowakowska and Bussiere “were recording their coworkers (and, inadvertently, customers) without their consent in violation of company policy and Pennsylvania law.”
Neither the ALJ or the court deny the allegation. On the contrary, they affirm it.
“The ALJ found that Nowakowska secretly recorded four meetings with supervisors,” the opinion reads. “Bussiere made about 30 recordings of conversations with management.”
What is in dispute is whether Starbucks knew about the unlawful recording activity before the termination of the employees. Starbucks says it did not, which would bolster its “after-acquired-evidence” defense.
The ALJ disagreed, and the Third Circuit concurred. They said evidence suggests Starbucks “knew or had reason to know” of the recordings prior to the termination of Nowakowska and Bussiere.
“Its contention is therefore unpersuasive,” the court said.
‘Just Threaten to Call the NLRB’
One needn’t have a degree in labor law to see how crazy the NLRB’s decision is, and it’s a good demonstration of why federal bureaucracies shouldn’t be involved in the hiring and firing decisions of individuals and private companies.
I don’t know Echo Nowakowska or Tristan Bussiere, and I certainly wish them no ill will. Yet evidence suggests they were hardly good employees. Court documents say Nowakowska was repeatedly reprimanded for slamming drinks down to customers and treating patrons “in a hostile manner.”
Bussiere, meanwhile, had been written up for refusing to wear his uniform, being late to work, leaving the counter unattended, and failing to stock items.
I suspect anyone running their own business would have little problem firing either of these workers, and would have harsh words for anyone who accused them of “unfair labor practices.” Yet the NLRB has a lengthy history of defending bad behavior in the workplace, and we see evidence of this policy every day (though we may not connect the behavior with the policy).
A year ago, I went to Starbucks with my daughter and we were treated rudely by a young woman. It’s easy to be angry at Starbucks when something like this happens, but NLRB deserves a lot of the blame. After all, it’s difficult to foster a positive culture when companies are legally prevented from firing toxic workers or creating effective guidelines that allow managers to discipline them for bad behavior.
And from reading court documents, Nowakowska and Bussiere sound like poor employees. Consider this email that their managers, written in January 2020:
[Bussiere] & [Nowakowska] think they can do what ever they want & just threaten to call NLRB if anybody says anything to them[.] I’m more than willing to deal with the backlash that would come with terminating the two of them because it doesn’t matter if we terminate now or 1 year from now[;] they will still call NLRB & spew vicious lies just like they do now while we pay them & give them benefits.
‘The Power and the Right to Commit Wrongs’
Economists have long observed that one of the biggest problems with labor unions is that they hurt productivity (in many cases they do so intentionally, the economist George Reisman has observed).
We often think of such losses in productivity in terms of capital machinery. An obvious example is dockworkers opposing automation that would improve efficiency but “hurts families” because it makes union workers more expendable.
But unions (and the labor boards that protect them) harm productivity in other ways. The Starbucks saga involving malcontents Nowakowska and Bussiere shows this, and calls to mind something Ludwig von Mises observed about unions.
“They and their members and officials have acquired the power and the right to commit wrongs to person and property,” Mises wrote in 1965, “and to commit many other acts which no one can do with impunity.”
I worked as a bartender and server for years myself, and I have little doubt that had I or any of my coworkers been blatantly rude or hostile to customers it would not have been tolerated. We would have been booted, and justly so.
The mere act of being in a union or trying to form a union should not give workers “the power and the right to commit wrongs,” but that’s what happens in many cases, and it certainly appears to have happened with Nowakowska and Bussiere, who seem to believe they were entitled to their job and were basically untouchable because they were attempting to form a union.
But both the ALJ and the Third US Circuit Court of Appeals sided with them in their dispute with Starbucks and is forcing the company to give them their jobs back. That is a miscarriage of justice.
Fortunately, a federal court recently ruled that tenure protections ALJs have long enjoyed are unconstitutional.
Judges who place the rights of unions ahead of private businesses should be a priority for the incoming administration. But overhauling or dismantling the National Labor Relations Board altogether is reportedly under consideration, and it’s an idea that should seriously be considered.