The United Starbucks Workers Union strikes on Red Cup Day

Starbucks union workers began an indefinite strike in more than 40 cities Thursday on Red Cup Day, one of the chain’s biggest sales days of the year.

The protest, which the union says involves more than 1,000 baristas in more than 65 stores, comes after the labor union voted to allow an indefinite strike after the barista and the coffee giant failed to reach a collective bargaining agreement.

The strike could hurt business during Starbucks’ busy holiday season, which typically provides a boost to sales and will be key to the chain’s plan to improve performance in the U.S. under new CEO Brian Nicol. Starbucks broke a nearly two-year streak of declining same-store sales in its most recently reported quarter. The company said previous strikes affected less than 1% of its stores.

The union is pushing for improved hours, increased wages and the resolution of hundreds of unfair labor practice charges against Starbucks. The two parties did not enter into active negotiations to reach a contract after the collapse of the talks between them late last year.

Starbucks and the union entered into mediation in February, and hundreds of barista delegates voted against the economic package Starbucks proposed in April. Both sides blamed the other for failing to reach a negotiated agreement, and say they are ready to negotiate.

Workers United, which began organizing at Starbucks in 2021, says it now represents more than 12,000 workers at more than 550 stores. Last week, the company told CNBC that the union represents only 9,500 workers at 550 cafes.

Baristas say they are prepared to escalate the strike, threatening to make this “the largest and longest strike in the company’s history if Starbucks fails to deliver a fair union contract and resolve accusations of unfair labor practices.” It is seeking new proposals that address its most important issues to finalize the contract.

“If Starbucks continues to obstruct a fair contract and refuses to end union busting, it will see its business go out of business,” Starbucks Workers United spokeswoman Michelle Eisen, a former barista who spent 15 years at the company, said in a statement. “No Contract, No Coffee is more than just a slogan — it’s a pledge to boycott Starbucks’ operations and profits until a fair union contract is reached and unfair labor practices are put to an end. Starbucks knows where we stand.”

In response to the results of last week’s strike vote, Starbucks previously said it would be ready to serve customers across its nearly 18,000 company-operated and franchised stores this holiday season.

“Starbucks offers the best job in retail, including more than $30 an hour on average in pay and benefits for hourly associates. Workers United, which represents just 4% of our associates, has chosen to walk away from the negotiating table. We’ve asked them to come back — multiple times. If they’re willing to come back, we’re ready to talk. We believe we can move quickly to reach a reasonable deal,” Starbucks spokesman Jace Anderson told CNBC in a statement on Monday.

In a letter to workers addressing the strike authorization vote last week, Sarah Kelly, Starbucks’ chief partner officer, reiterated the belief that the two sides could reach an agreement quickly.

“For months, we have been at the negotiating table, working in good faith with United Workers and representatives from across the country to reach agreements that make sense for partners and for the long-term success of Starbucks,” Kelly said. “We have reached more than 30 tentative agreements on full contract terms.”

“Our commitment to negotiation has not changed,” she added. He added, “The labor union has moved away from the table, but if they are ready to return, we are ready to talk. We believe we can move quickly to reach a reasonable agreement.”