As Starbucks welcomes its new CEO, who previously held a leadership role at Chipotle Mexican Grill, the coffee giant finds itself at a critical crossroads. While the new CEO brings experience from a major player in the fast-casual industry, his track record at Chipotle, particularly in handling unionization efforts, could complicate Starbucks’ ongoing labor relations challenges.

The new CEO’s tenure at Chipotle was marked by several high-profile labor disputes, most notably the closure of the Augusta, Maine, location in 2022. This Chipotle restaurant was the first in the chain to file a union petition with the National Labor Relations Board (NLRB). The company’s decision to permanently close the location shortly after the union petition was filed drew significant scrutiny, with the NLRB later ruling the closure illegal. The ensuing settlement required Chipotle to pay $240,000 to the affected workers and commit to not closing stores or discriminating against employees due to union activities—a settlement that highlighted the company’s strained relationship with its workforce.

This history raises concerns about how Starbucks’ new CEO will approach the ongoing unionization efforts within his new company. Starbucks has been at the forefront of a major labor movement, with numerous locations across the country filing for union elections. However, the company has also faced accusations of union-busting tactics, including firings, reduced hours, and other retaliatory measures against pro-union employees. The new CEO’s approach to these issues will be closely watched, especially given the parallels between the labor struggles at Chipotle and those at Starbucks.

At Chipotle, the new CEO was part of a leadership team that faced multiple labor-related controversies. In addition to the Augusta closure, Chipotle settled class action lawsuits totaling $23 million over wage and hour violations, and faced citations in Massachusetts and New Jersey for child labor violations. These issues have contributed to a reputation of poor labor practices, a reputation that the new CEO may find difficult to shake as he takes the reins at Starbucks.

One of the key challenges the new CEO will face is navigating the high employee turnover that has plagued both Chipotle and Starbucks. At Chipotle, turnover rates reached an alarming 194% in 2021, suggesting deep-rooted issues with employee satisfaction and retention. Starbucks, too, has struggled with similar issues, as workers at unionized locations have reported poor working conditions, low wages, and inadequate benefits—factors that have fueled the unionization drive across the company.

The stark contrast between executive compensation and frontline worker pay remains a contentious issue. At Chipotle, the CEO’s compensation dwarfed that of the average employee, a disparity that contributed to employee dissatisfaction and unionization efforts. Starbucks faces a similar situation, where the pay gap between executives and baristas has been a focal point of worker grievances. The new CEO will need to address these disparities if he hopes to quell the growing unrest within the company’s ranks.

The ongoing union negotiations at Starbucks will also serve as a litmus test for the new CEO’s leadership. Workers at the first unionized Starbucks location in Buffalo, New York, have yet to secure a contract more than a year after their successful union vote. Similar struggles have been reported at other unionized Starbucks locations, where negotiations have stalled or failed to produce meaningful agreements. The new CEO’s ability to engage in good faith negotiations and reach fair agreements with unionized workers will be crucial in determining the future of labor relations at Starbucks.

As Starbucks embarks on this new chapter under its new CEO, the company’s approach to labor relations will be under intense scrutiny. The new CEO’s track record at Chipotle, particularly in handling unionization efforts, will undoubtedly influence his approach at Starbucks. However, if the past is any indication, the road ahead may be fraught with challenges.

For Starbucks to move forward and address its labor issues effectively, the new CEO will need to demonstrate a genuine commitment to improving working conditions, offering fair wages, and engaging in transparent and fair negotiations with unionized workers. Failing to do so could result in continued labor disputes, high turnover, and a damaged public image—outcomes that Starbucks, and its new CEO, can ill afford.

Ultimately, the success of Starbucks under its new leadership will hinge on the company’s ability to balance profitability with the fair treatment of its employees. Whether the new CEO can overcome the baggage from his Chipotle days and lead Starbucks through its labor challenges remains to be seen. The stakes are high, and the coffee giant’s future may well depend on how its new leader navigates this critical issue.