Starbucks Corp. paid roughly $11.7 million to its former general counsel Rachel Gonzalez last year, amid a rising unionization drive among baristas and other retail workers in the United States.
On April 4, 2022, Gonzalez’s employment at Starbucks was terminated without cause after the company decided to reinstate former chairman and current CEO Howard Schultz. Until May 20 of last year, she remained a senior consultant at Starbucks, albeit her annual base compensation of $725,000 was cut in half.
Since 2018, Gonzalez has been leading Starbucks’ legal department. The proxy report shows that in addition to her severance pay, Gonzalez received a basic salary of $440,200 and more than $3.6 million in stock awards. Before Gonzalez left, Starbucks’ creator Howard Schultz held the position of chief executive officer. In September 2022, Laxman Narasimhan was tapped to serve as CEO. Reports from the corporation reveal that Narasimhan received an $8.8 million signing bonus.
In a proxy statement filed on January 27, Starbucks reported that its former top lawyer earned almost $440,200 in basic income, more than $3.6 million in stock awards, and over $7.6 million in other remuneration in 2017. For comparison, Gonzalez had a total compensation package of $5.3 million in the fiscal year 2021.
Gonzalez, who is now serving on the Vacasa Inc. board, said in an interview last year that she is still a dedicated Starbucks patron. Gonzalez will get up to $8 million from Starbucks as part of her separation agreement.
Her departure occurred as Starbucks reorganized its upper management to deal with growing labor problems such as shop walkouts and union organizing campaigns; nonetheless, seasoned in-house lawyer Zabrina Jenkins remained acting general counsel. At least 107 strikes took place at the coffee shop in 2022; the most strikes since 2005 were recorded in the United States that year. The retail business had more strikes than any other sector.
Starbucks has tried to bring in personnel with experience in labor and employment to assist the company in dealing with the recent uptick in union activities. This month, the Seattle-based firm brought Daniel Mueller, a director, and corporate counsel for labor who formerly worked for the National Labor Relations Board. He has been employed with Providence Health & Services, a prominent Catholic healthcare organization, for the last decade.
Over the last two years, Starbucks has employed an inside team of at least six labor attorneys, including Mueller. The company didn’t respond immediately to a request for comment on its latest legal hiring efforts. A Starbucks spokeswoman said last year that the company had filled positions left open by people who had left.
According to Bloomberg Law statistics, almost 70% of labor and employment disputes involving Starbucks filed in US federal courts during the previous five years were handled jointly by Littler Mendelson and Ogletree, Deakins, Nash, Smoak & Stewart.
During that time, two other big labor law firms, Jackson Lewis and Seyfarth Shaw, also represented Starbucks.
Since 2021, when baristas in Buffalo, New York, created the first Starbucks union in the US, unionization attempts among the company’s workforce have intensified throughout the country. Thousands of employees filed petitions with the NLRB to form alliances before voting. With 253 unionized outlets, Starbucks Workers United claims to have organized more unions in a year than any US firm in the last two decades. In addition, employees lodged 457 complaints of unfair labor practices with the NLRB. The union was met with allegations of retaliation by Starbucks.