Have Starbucks and their DEI efforts hit the seven-year itch?
This week, the coffee giant announced to its stores that the company would be updating its Coffeehouse Code of Conduct across all North American locations. The biggest change? People are no longer invited to hang out, sit around or enter their cafés to access the restrooms without making a purchase—a stark reversal from the “open door” policy implemented in 2018.
That year, two Black men, Donte Robinson and Rashon Nelson, were arrested inside a Philadelphia Starbucks while waiting for a friend to arrive for a business meeting. The men had initially asked to use the bathroom, but were told it was for paying customers only. They returned to their seats and occupied a table without making a purchase. Within minutes, a manager called police after the men declined to leave the premises. The story sparked protests over racial bias, and as it hit national news outlets, it quickly became a PR disaster. Many commenters noted that waiting for a friend before ordering was common occurrence.
The brand’s CEO at the time, Kevin Johnson, released a statement saying the incident was “reprehensible” and ‘The actions in it are not representative of our Starbucks Mission and Values. Creating an environment that is both safe and welcoming for everyone is paramount for every store.”
The company apologized and followed up by closing all of its stores nationwide for one day, to hold racial bias training for employees.
The policy was tested at times, most notably in 2022, when a growing population of people were entering locations and posing threats to baristas and clients. But Starbucks believed that allowing anyone access to the premises was the right decision, because of the implicit bias that occurred when people are denied access to tables and the bathrooms.
Cut to today.
“We will ask anyone not following this code of conduct to leave the store and may ask for help from law enforcement.”
What changed?
Enter Starbucks’ New CEO
In August 2024, Starbucks announced it was replacing CEO Laxman Narasimhan, who’d held the position only 17 months, due to weak client demand, disgruntled investor groups, and declining sales. During Narasimhan’s tenure, Starbucks’ share price dropped over 20%, and its market cap dropped $32 billion.
He was replaced by Brian Niccol.
Prior to this, Mr. Niccol was serving as chairman and CEO of Chipotle—a role he’d occupied since 2018, and one in which he’d transformed Chipotle in every area of the business. From a financial perspective, he nearly doubled revenue, profits increased over sixfold and the stock price erupted over 700%. From a brand perspective, he led the wage increase for retail teams, ensured more benefits for colleagues and focused on building and strengthening culture. Not to mention his three areas of focus: fine-tuning the menu and delivering products people want, ensuring that operations run smoothly at both peak and off-peak times and staying on the cutting edge of digital and AI innovations that are transforming food service.
At Starbucks, the updated Code of Conduct was one of Mr. Niccol’s first public-facing changes.
Is Exclusion the New Inclusion?
In an effort to get their mojo back, Starbucks is looking to lure back their core clientele to build—or, in some cases, rebuild—loyalty and jump-start sales. But will they be building a bit of a de facto walled garden that prohibits casual customers from entering its stores?
It’s hard to believe that in the wake of the murder of George Floyd in the summer of 2020, the conversation shifted from “open to everyone” to “open to customers only,” particularly with their mission of being America’s third place to gather, after home and work.
Has the pendulum of inclusivity swung so far that it actually waters down the brand offering and causes more harm than good? It’s the debate of growth via loyalty versus growth via inclusivity.
In March 2024, after Starbucks’ annual shareholders meeting, investors voted to adjust the shareholder compensation language for bonus considerations for top executives, removing DEI (diversity, equity and inclusion) goals, which account for 7.5% of Starbucks’ executive bonus consideration. This initiative began in 2020, as a company-wide effort to support DEI at Starbucks.
With Niccol currently serving on the board of directors of both Walmart Inc. and having previously served on the board of Harley-Davidson, it should be noted that both boards recently altered their DEI policies.
Beyond that, over the past four years, more than 530 Starbucks stores have won union elections, representing more than 12,000 workers across the company. The issue: economics and equity. In 2024, Starbucks Workers United filed an unfair labor practice charge alleging the company “refused to bargain and engaged in bad faith bargaining over economic issues.” Already in 2025, the group has filed an additional 36 unfair labor practice charges against the company.
An additional point worth mentioning: Niccol’s pay package, which includes up to $100+ million in total compensation and amounts to 10,000 times the median salary of a Starbucks barista.
It’s clear that Starbucks is at a turning point.
Which road will they choose to continue down? The windy road toward inclusion or a straight path down the road to exclusion.