Are we exclusive? Starbucks cannot restrict unionized employees to unionized store

An arbitrator held that Starbucks must maintain its status quo "Borrowing" staffing model at a recently unionized Ontario location, ruling out the "Exclusivity" model it sought for its first collective agreement with the union.

Starbucks' staffing model becomes the subject of interest arbitration

A recent interest arbitration¹ award dealt with the final unresolved item between Starbucks and the United Steelworkers, District 6 (USW) in relation to one of Starbucks' first unionized locations in Ontario.

Starbucks owns and operates approximately 978 stores in Canada and employs approximately 19,000 non-managerial baristas and shift supervisors. The USW was certified as the bargaining agent for the Ontario location in issue in 2023. This certification is only the 14^th location certified in Canada, and the fifth in Ontario.

Starbucks uses a staffing model whereby employees from one store can pick up shifts at other stores in the same region. This widespread practice is called "Borrowing." At issue was whether the parties' first collective agreement would contain a clause enabling employees in the bargaining unit at the unionized store to work in other non-unionized

Starbucks locations, and whether employees from non-unionized locations could work at the unionized store.

The USW wanted the collective agreement to recognize and continue the Borrowing practice. Starbucks opposed Borrowing, arguing it would create "unsurmountable administrative and labour relations challenges." Starbucks proposed language ensuring "Exclusivity," confining unionized workers to the unionized store, and not permitting non-unionized employees to work at that location.

Notably, at the time of the hearing, three Starbucks locations in Western Canada had concluded collective agreements. Those three agreements all include Exclusivity clauses and are silent on Borrowing. None of the unionized Ontario locations have yet concluded a collective agreement.

Ontario Board of Arbitrators decides that maintaining existing staffing model is required

The majority of the Board of Arbitration upheld the status quo, requiring Starbucks to continue "Borrowing" under the collective agreement. In her decision, Arbitrator Knopf concluded that Starbucks' proposal for Exclusivity would leave employees with fewer rights than they had before they joined the union, diminish their opportunities for compensation and benefits and undermine confidence in the process of collective bargaining.

As a result, unlike its collective agreements in Western Canada, Starbucks' first collective agreement in Ontario will operate on a Borrowing model, not an Exclusivity model.

Takeaways

Multi-location employers reliant on a staffing model similar to the Starbucks Borrowing model may face unique staffing challenges if individual locations are unionized. Administering employees who can move freely between unionized and non-unionized locations may be complicated from a human resources and labour relations perspective. The outcome in this case demonstrates that a large employer may even face a patchwork of staffing models across a province or across the country. The possibility of this outcome makes staffing models a key issue to prioritize in bargaining, before the decision is left with a third party.

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