Shareholder group wants Starbucks to change its tune on unions

The letter, from a coalition of pension funds and social investors, cites the increasing popularity of labor groups and comes amid a growing push to unionize more locations.
Starbucks unions
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A coalition of more than 70 shareholders wants Starbucks to change its response to union drives, citing labor groups’ growing popularity, as a growing number of the coffee giant’s locations seek to unionize.

Seventy-three organizations, which manage some $3.5 trillion worth of assets, have signed onto the letter, which notes that some 120 locations are trying to unionize. Most of the investors represent union pension funds or socially conscious investment groups.

“As more Starbucks partners make the decision of whether they should unionize, we believe the company should publicly commit to a global policy of neutrality and swiftly reach fair and timely collective bargains with the workers should they vote to unionize,” the groups wrote.

Among the leading signatories are Trillium Asset Management, a social investing firm, and SOC Investment Group, which works with union pension funds and often pushes major companies to make changes. But dozens of other groups signed the letter, which was sent to CEO Kevin Johnson and Mellody Hobson, Starbucks’ board chair.

Other signatories include socially conscious investment firm Parnassus Investments, Pensions and Investment Research Consultants and New York City Comptroller Brad Lander. Dozens of other firms signed onto the letter, which was sent on the eve of Starbucks’ annual shareholder meeting, set for Wednesday.

The Seattle-based coffee giant is facing a growing unionization effort, which has now spread to 145 locations across the country. That remains a tiny fraction of Starbucks’ 9,000 company-operated locations, yet it represents the first real success in labor activists’ years-long effort to get fast-food restaurants to unionize. Six of those locations have voted to form a union. 

The letter takes issue with some of Starbucks’ efforts to push back against the union. The company has sent some top executives to local stores and even its longtime former CEO Howard Schultz. The letter accuses the company of terminating union leaders and for holding captive audience meetings.

“We believe the way Starbucks has responded to union organizing activities suggests a departure from international norms and standards as well as from its commitments to them,” the letter says.

The letter suggests that unions are increasingly popular with the public and that Starbucks’ stand on union representation in its restaurants runs counter to that. “With rapidly growing public support for unions, which currently stands at a high of 68% approval, we believe that Starbucks’ reputation may be jeopardized due to reporting of aggressive, union-busting tactics,” the shareholders write. They also argue that 42% of Americans say they are less likely to shop with a company trying to stop workers from unionizing.

The investors believe Starbucks should instead shift to a neutral stance on unions. They also argue that the company should develop closer working relationships with those unions, arguing that workers in such situations are more productive. “We believe that when workers’ rights are ensured, their interests represented and their needs properly communicated, companies and workers alike benefit,” the investors write.

“This group of investors encourages Starbucks to pivot to a more collaborative and mutual relationship with its unions to uphold its reputation,” the letter said.

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