Investors Call on Starbucks to Restart Negotiations with Unionized Workers
Investors are concerned that Starbucks’ labor relations have significantly deteriorated, evidenced by more than one hundred Unfair Labor Practice complaints filed this year, worker protests over store closings, and threats to strike
New York, NY – New York City Comptroller Brad Lander, PIRC, SHARE and Trillium Asset Management have sent a letter to the Starbucks Board of Directors expressing concern over stalled negotiations between the company and unionized employees represented by Starbucks Workers United (SBWU), urging Starbucks to restart negotiations with SBWU and promptly reach a first contract.
The letter to Starbucks explains that a failure to reach a contract jeopardizes the company’s reputation and long-term shareholder value. The company has itself recognized that “our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results.” On Wednesday, New York State Comptroller Thomas P. DiNapoli also sent a letter to the board expressing his concerns. This underscores the growing investor scrutiny over the company’s handling of unionization efforts.
“As investors committed to the long-term success of Starbucks, we know that poor labor relations are a risk the company cannot afford to take,” said New York City Comptroller Brad Lander. “Stalled negotiations despite union threats to strike, inaction, and too many reports of unfair labor practices put Starbucks’ reputation and shareholder value on the line. Starbucks’ Board must come to the table with Starbucks Workers United swiftly to reach an agreement and demonstrate to Starbucks customers and investors that human capital management is a priority.”
“It’s been almost four years since the first Starbucks stores in Buffalo, NY voted to unionize,” said Jonas D. Kron, Chief Advocacy Officer at Trillium Asset Management. “Trillium expects companies to uphold human rights, including core labor rights, and to engage in collective bargaining that leads to a fair agreement in a timely manner. A first contract is long overdue.”
In 2023, this coalition of investors secured majority support of Starbucks shareholders for a proposal urging the company to conduct an independent assessment of the company’s adherence to its stated commitment to workers’ rights of freedom of association and collective bargaining rights. Starbucks released the third-party assessment in December 2023, which did not consult workers, but nonetheless acknowledged clear corporate governance failures.
“Good human capital management practices are crucial to any company’s success, because workers who are valued also create value for their employers,” said Juana Lee, Associate Director, Corporate Engagement, SHARE. “Shareholders are relying on the Company to bargain in good faith with Starbucks Workers United.”
After the shareholder proposal and the third-party assessment, there were positive developments in February 2024, when Starbucks and SBWU announced an agreement to begin discussions on a foundational framework designed to achieve both collective bargaining agreements for represented stores and partners, and the resolution of litigation between the union and the company.
However, recent reports suggest that Starbucks has allowed these efforts to languish, and investors are concerned that labor relations at the company appear to have deteriorated during CEO Brian Niccol’s tenure.
The coalition is committed to ongoing engagement with the company and continues to urge Starbucks to set the tone from the top, restart negotiations, and reach a first contract with SBWU. Re-prioritizing these efforts can show that the company is focused on positive labor relations with its workers. The coalition remains committed to monitoring Starbucks’ efforts to uphold their Global Human Rights Statement and these fundamental workers’ rights, and has requested a meeting with Board members to share its investors’ perspectives and concerns.
Read the full letter to the Starbucks Board of Directors: https://comptroller.nyc.gov/reports/letter-to-starbucks-board-of-directors-from-comptroller-lander-trillium-asset-management-shareholder-association-for-research-and-education-share-and-pensions-investment-research-consultants-pir/
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