Once the hurdle of certification of a union has been cleared, the next big step in unionizing a given industry or workplace is for the parties to negotiate a mutually acceptable collective bargaining agreement. This difficult process requires engagement and sincere effort on behalf of all parties to successfully achieve a proper collective bargaining agreement.

On occasion, the parties may find themselves at an impasse concerning their negotiations, in which circumstances the parties turn to a Board of Arbitration to resolve their dispute.

Such was the case in Starbucks Coffee Canada, Inc. v United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers), District 6, wherein the parties were unable to compromise on one specific area of their very first collective agreement, so they appeared before a Board of Arbitration to seek resolution of their issue.

First Starbucks Unionized in Ontario Runs into Roadblock in Crafting Collective Agreement

The case of Starbucks Coffee Canada, Inc. v United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers), District 6 involved Starbucks Store #4733, located in Waterloo, Ontario. Store #4733 is one of 978 Starbucks locations operated in Canada, of which 14 stores have unionized: four in British Columbia, five in Alberta and five in Ontario. Notably, none of the unionized Ontario locations have finalized a collective agreement despite efforts to do so.

In May of 2023, the Union was certified as the bargaining agent for all employees besides management for Starbucks Store #4733. The bargaining unit includes two classifications: baristas and shift supervisors. There are no part-time/full-time designations and no guaranteed hours of work. Following certification, the parties engaged in significant efforts to come to terms concerning their first collective agreement, evidenced by the fact that they persevered throughout 17 rounds of bargaining. Although the parties could find consensus on many disputed issues, they could not come to terms with borrowing. This disagreement led to the interest arbitration at hand.

What is ‘Borrowing’ in the Context of Employment?

‘Borrowing’ is a practice employed by Starbucks locations across Canada. Employees of one Starbucks location are permitted to pick up shifts at other locations as and when able and willing to do so, regardless of who owns the franchise. In other words, Starbucks employees of any franchise location are generally allowed to work shifts at any Starbucks franchise location in the vicinity they wish, and managers are permitted to borrow employees from any franchise location to cover shifts at their location.

This practice is widespread at Starbucks locations across Canada, so much so that it facilitates the practice via its ‘Partner Hours’ App, the main scheduling tool used across Starbucks franchises. Starbucks managers are also known to operate on several Facebook groups to discuss staff swaps and address gaps in coverage at various locations to enable borrowing employees from one another more easily.

What Does the Employer Have Against Borrowing in a Unionized Environment?

Starbucks contested the inclusion of a borrowing provision in the collective agreement. Instead, it sought the introduction of an ‘exclusivity clause’ into the parties’ collective agreement for Store #4733 which would dictate that the employees of Store #4733 would exclusively be available to work at that location and could not be loaned out to any other Starbucks locations, and furthermore, that no employee of any other location could be lent to Store #4733. Starbucks argued that to allow employees of Store #4733, who were unionized, to be lent out to other, non-unionized locations or to permit non-unionized employees of other locations to work at Store #4733 would create “an unworkable situation” in that it would give rise to a two-tiered system wherein employees working at the exact location would be subject to different rates of pay and different rules and conditions.

Starbucks further argued that to allow borrowing to continue at Store #4733 would create confusion about whether non-unionized employees at the location would be permitted to pursue a grievance process should a grievable offence occur and, conversely, whether unionized employees of Store #4733 would be permitted to avail themselves of the grievance process in respect of an issue that arose. At the same time, they worked on loan at a different location. Starbucks also suggested that collecting union dues and administrating scheduling and payment would be significantly more difficult if borrowing were permitted.

Board Rules in Favour of Union, Allows Borrowing to Continue

After carefully considering all arguments made by both sides, the Board of Arbitration roundly rejected all of Starbucks’ arguments in favour of including an exclusivity clause. In particular, the Board noted that allowing the employer’s proposal would mean that the employees of Store #4733 could not avail themselves of the borrowing policy enjoyed by other Starbucks locations, such that their working hours and availability would be confined to the Store #4733 location. As most Starbucks employees regularly engaged in borrowing throughout the company, including at the Store #4733 location, imposition of an exclusivity clause that prevents the employees of Store #4733 from continuing to pick up shifts at other locations would severely curtail their income-earning potential such that they would find themselves with fewer rights than their non-unionized peers. This would, of course, “undermine confidence in the process of collective bargaining” and would thwart the bargaining process altogether, which is the diametric opposite of the purpose of negotiating a first collective agreement.

Furthermore, the board overblown and dismissed concerns about creating a two-tiered system because such a system already existed at all Starbucks locations, wherein all employees are compensated commensurate with experience, local market conditions, and applicable laws, and compensation rates vary from employee to employee. In such circumstances, introducing a system in which non-unionized and unionized employees work side-by-side at different pay rates would continue the status quo. It would not disrupt or otherwise confuse the industry.

Finally, the Board noted that non-unionized employees working at Store #4733 would not be expected to pay union dues. As such, no confusion or extra effort would be required to collect union dues regarding Store #4733. Moreover, any non-unionized employee would not have a right to participate in the collective bargaining process or to grieve any wrongdoing, as the common law process is available to such employees. The Board ordered that language be included in the parties’ collective agreement to reflect that the terms and conditions negotiated therein applied only to the unionized employees of Store #4733 when they were working at Store #4733 and were not applicable when employees of Store #4733 worked at other locations, nor when non-unionized employees of other franchise locations accepted shifts working at Store #4733.

Toronto Labour Lawyers Advising Clients On Their Union Legal Matters

If you seek guidance for certification of a union, negotiation of a collective bargaining agreement, a grievance arbitration or labour board proceedings, then you need comprehensive, competent legal advice to ensure that your rights are asserted and protected throughout any legal proceedings. Fortunately, the knowledgeable lawyers at Grosman Gale Fletcher Hopkins LLP are pleased to provide sage legal counsel to employers and employees alike.

From our offices in downtown Toronto, Ontario, Grosman Gale Fletcher Hopkins LLP proudly provides legal services regarding labour and employment law to clients across Southern Ontario. Contact Grosman Gale Fletcher Hopkins LLP today, either online or via telephone at (416) 364-9599, and one of our friendly, helpful staff will be pleased to schedule a confidential consultation.