SEATTLE—Union pension funds and pro-shareholder investment advisors are taking the fight over Starbucks’ rampant labor law-breaking to its stockholders.
At the Seattle-based monster coffee company’s virtual annual meeting on March 23, they’ll demand Starbucks name an outside auditor to determine if, or, more likely, how much the anti-union drive has hurt Starbucks’s reputation, share price, and profits—and what to do next.
The firm’s answer, in a recent earnings call and in its proxy statement, where it opposes the demand, is “none at all.” Just before he retired early, effective March 20, virulent anti-union CEO Howard Schultz reported record profits in the U.S.
Schultz has orchestrated and overseen expensive opposition, complete with law-breaking, to the grass-roots drive his firm’s “partners,” as he calls the workers, have conducted with the aid of Starbucks Workers United (SWU), which in turn the Service Employees funds.
Schultz’s actions include cases where he’s been held personally responsible for labor law-breaking—formally, unfair labor practices. They feature captive audience meetings, one-on-one middle-management intimidation and verbal browbeatings of pro-union workers, denial of benefits to workers at stores that vote union, and dozens of illegal firings.
They’ve also produced at least 509 labor law violations, a nationwide National Labor Relations Board injunction—later reduced by a federal judge to cover just the Buffalo area—and five more injunctions.
One mandates Starbucks rehire the illegally fired “Memphis 7.” Another returned a barista to work in Kansas City. A separate New York City court order, saying Starbucks violated a city ordinance, sent a Queens staffer back to his job, to cheers from colleagues and bystanders.
Workers at 290 Starbucks stores have voted union, with hundreds more being organized. Its actions also hurt Starbucks’ carefully cultivated reputation for being a progressive place to work. And that’s hurt its bottom line, the shareholders’ resolution says. It’s also “a legal and financial risk” the pension and investment funds co-sponsoring the measure say. They demand the independent audit to document the damage and recommend changes.
Schultz, under pressure, condescended to have his bargainers meet the workers and SWU. But his team saw workers had zoomed in from around the country to attend, and walked out of talks after five minutes, twice. The firm’s union buster led them out.
Led by New York City Comptroller Brad Lander, whose office represents five worker pension funds which own $155 million in Starbucks stock, and two longtime shareholder advocates, Trillium and Institutional Shareholder Services, they contend Shultz’s union hate hurts Starbucks—and them.
“As shareholders, we expect and demand better from a company that claims to promote a positive work environment. The onus is on Starbucks’ board of directors to ensure that management is complying with applicable law as well as with company policy,” said Lander.
“When companies blatantly disregard and oppose their employees’ fundamental right to organize, they put their reputation on the line,” he added. “For a company as focused on the customer experience as Starbucks, continued interference with worker organizing undermines the brand, which is essential to its success.
“Workers have boldly stood up to company leadership and fought for real representation over the course of just two years, yet rather than treat them as partners —as the company calls its employees—Starbucks has taken actions inconsistent with its own stated values.
“A new standard is emerging across the U.S: any company that wants to be considered a responsible employer must genuinely remain neutral when workers organize.”
Added Jonas Krom of a second fund, Trillium: “Whether the vote is in the 30%, 40%, or 50% range, an unignorably large group of investors will be sending a message to incoming CEO Laxman Narasimhan and board chair Mellody Hobson” to change. Narasimhan unexpectedly succeeded Schultz, but Schultz will still testify to the Senate Labor Committee on March 29.
The pressure on Starbucks and Schultz won’t be just inside, where everyone will meet via zoom. Schultz and the other executives will be in Seattle—and pro-worker advocates and partners will be out in the streets, where a celebration of Schultz’s long reign is scheduled.
“Starbucks, which posted $3.3 billion in profits last year, responded with a brutal, bullying anti-union campaign of threats, intimidation, firings, store closings and refusing to meet workers at the bargaining table–becoming the most prolific union-buster in U.S. history,” organizers of that event, plus walks elsewhere, said.
“Workers and their allies will converge on downtown Seattle to make it an accountability day and call on Howard Schultz and his board of directors to STOP UNION BUSTING and come to the table to bargain with workers,” they concluded.
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