Wages
Missouri – The state supreme court will hear arguments March 12 asking the courts to nullify the voter-approved, new minimum wage and paid leave mandate in the state. The lawsuit, filed by the state Chamber of Commerce and other business groups including the Missouri Restaurant Association, argue the election results in support of the recent ballot measure to increase the minimum wage must be set aside because its fiscal note summary is “insufficient and unfair.” The suit goes on to say that “Proposition A will impose two new and separate requirements on Missouri employers: a minimum wage increase and an entirely new paid sick leave requirement with extensive governmental oversight and enforcement.” More details.
New York – Legislation was introduced that would eliminate the tip credit in the state. It would eliminate the tip credit in New York City and its suburbs by 2029 and in the rest of the state by 2030. The legislation also expands tip sharing, and creates a tax credit, the “One Fair Wage Reimbursement Credit,” designed to help businesses transition. In 2026, employers would get a credit of $1.50/hr. The tax break gets smaller each year until ending in 2030 at $1.Similar legislation has been introduced in previous years with little to no action. One Fair Wage held a rally at the statehouse in support of the legislation publicly denigrating the National Restaurant Association. The legislative session is scheduled to end in June. More details.
North Carolina – A house committee advanced legislation that would eliminate state income taxes for tips and overtime while providing a tax deduction for bonus pay up to $2,500. More details.
Paid Leave
New Mexico – A house committee advanced legislation to mandate paid family and medical leave for businesses with five or more employees. If passed, the bill would provide benefits for workers to take paid leave in the event of the birth of a new child, families preparing for a spouse in the military, medical reasons, and protecting employees experiencing domestic violence. The bill would further require all workers and employers to pay into a state fund, with 1.5 percent coming from an employee’s wages and employers paying .4 percent of each employee’s wages. Similar legislation died last year. More details.
Labor Policy
EEOC – Two Democrat appointees to Equal Employment Opportunity Commission (EEOC) have been removed from their roles by President Trump in a round of late-night firings that could mark a drastic shift in the government’s approach to workers’ rights in employment discrimination disputes. The outers of Charlotte A. Burrows and Jocelyn Samuels may leave the agency without a quorum that would allow it to take formal actions. Burroms and Samuels are likely to sue, arguing their removal is unlawful. The EEOC General Counsel Karla Gilbride was also fired as well. It is unclear if Kalpana Kotagal, the third Democrat appointee whose term expires in July 2027, will remain. More details.
NLRB – President Trump fired National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo. Unlike his predecessor, President Biden, who fired Trump’s appointed General Counsel Peter Robb on his first day in office, President Trump waited a week before terminating Ms. Abruzzo. While Abruzzo’s term was slated to last until July, her ouster by Trump was widely expected. In related news, the president also took the unprecedented step of firing Democratic board member Gwynne Wilcox. This will likely start a legal tussle as section 3(a) of the NLRA states that “Any member of the Board may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” Trump’s firing of Wilcox is not for neglect of duty or malfeasance and therefore likely violates the NLRA. In a statement, Wilcox said she will sue. A major question at issue is the lack of a quorum in which these actions result. The board does not need a quorum to execute many of its functions, however appeals, requests for review, and section 10(j) injunctions require a quorum of the board. More details.
Utah – House-passed legislation that would limit public sector collective bargaining and stop union representatives from doing union work while on public time advanced to a third reading in the senate. It would also bar employees receiving paid leave for union activities and require unions to pay to use meeting spaces that other groups have to pay for, and to report annually to the labor commission the number of members they have and the money they spend. More details.
Washington – A senate committee will hear legislation Feb.7 that would provide unemployment benefits to striking workers after only one week on strike. Two other states (New Jersey and New York) have similar laws providing benefits after two weeks on strike. Similar legislation in California was ultimately vetoed by the governor over cost concerns. More details.
Labor Activism
Starbucks – The company and the union representing thousands of its employees announced that they were bringing in a mediator in a push to revive contract talks, which have stalled over an impasse on wage increases. In a joint statement, the two sides said that they had made progress over the last nine months, and that they were “committed to continuing to work together – with a mediator’s assistance – to navigate complex issues and reach fair contracts.” Starbucks and Workers United have reached agreements on dozens of issues related to working conditions, the union said at the end of last year. But they remain at odds on key economic provisions. In the most recent bargaining session in December, the company offered to guarantee baristas a wage increase of at least 1.5 percent a year. More details.
Starbucks – Seven protesters were arrested at a sit-in at a restaurant in the Park Slope neighborhood of Brooklyn, NY. The store is scheduled to close for good today, only a few months after employees voted in Oct. to unionize and join Starbucks Workers United. It is one of a handful of unionized stores currently on the chopping block. More details.
Whole Foods – Workers at a store in Philadelphia voted to form a union, the first time employees of the Amazon-owned grocer have organized in decades. The vote, which passed 130-100, was prompted by workers’ push for higher wages and improved benefits. The workers will join a local chapter of the United Food and Commercial Workers International Union (UFCW). The union is the nation’s biggest representing grocery workers, and the local group includes thousands of other food retail workers in Pennsylvania. Employees said that after the unionization petition was filed in Nov. Whole Foods pushed out much of the old management at the store, replacing them with new managers largely from out of state. Union organizers said posters criticizing union dues popped up in worker-only spaces, and employees are regularly pulled into meetings that discourage unionization. The UFCW Local 1776 filed unfair labor practices charges in early Jan. with the NLRB alleging that Whole Foods fired an employee in retaliation for engaging with the union, and that the company withheld a regionwide wage increase from store workers because of the unionization push. More details.
One Fair Wage – The organization launched the LA Service Workers’ Relief Fund to provide immediate financial assistance to restaurant workers and other low-wage workers impacted by the crisis. The fund will provide direct cash assistance to eligible workers who have experienced income loss or other economic challenges due to the fires. Support includes financial assistance for urgent needs like rent, groceries, basic living expenses, legal services, and access to job relief resources through One Fair Wage’s network of partners and advocates. One Fair Wage previously raised $24 million and assisted 50,000 workers during the COVID-19 pandemic with its Emergency Coronavirus Service Workers’ Support Fund. More details.
Diversity, Equity, and Inclusion
Costco – Shareholders voted down an investor proposal from a conservative think tank that urged management to investigate the business risks of its diversity initiatives. More than 98 percent of shares voted against the proposal after the chairman and other members had asked shareholders to reject the proposal ahead of the company’s annual meeting. The National Center for Public Policy Research (the conservative shareholder advocacy group that submitted the proposal) argued that DEI is “illegal, immoral and detrimental to shareholder value” and poses litigation risks for the company. Walmart and Starbucks face similar proposals at their upcoming meetings. More details.
Target – The company announced that it will stop participating in all external diversity-focused surveys, including a popular one from the Human Rights Campaign. It is also “further evaluating” corporate partnerships and changing its “supplier diversity” team to “supplier engagement.” Target is the latest large employer to dial back their commitments to expand representation to diverse groups in response to pressure from right-wing activists, lawsuits from conservative legal groups, demand from conservative-leaning customers and other factors. More details.
Key Takeaways
- Data from the Bureau of Labor Statistics last week show that only 5.9 percent of private sector workers are members of a union, a drop of two full percentage points over the last 20 years. Service workers unions, led by the SEIU and others, will become increasingly more aggressive and one of their key target groups are young workers – especially those on college campuses. Brands with outlets on or near college campuses should remain mindful of the strategic directions the unions are taking and prepare accordingly.
- The removal of the NLRB General Counsel will be celebrated by many employer groups. Abruzzo drove a long list of policy changes, sharply departing from established precedents, at the NLRB. Expect litigation over the composition of the NLRB and EEOC regarding the removal of appointees. Regardless of the outcome, the impact to employers will likely be the same – the agencies will lack quorum to address major issues until new appointees, likely management friendly ones, are seated.