Investor group led by Trillium urges Starbucks to respect union vote
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At the forefront of investor demand are billions-worth of assets that have been managed by these investors. StarbucksRespect the workers who voted to create at least one local café in Buffalo, New York.
New York City Comptroller Scott M. Stringer is one of many signatories. The Northwest Coalition For Responsible Investment and Sustainable Advisors Alliance are also signed. Trillium owns approximately $48 Million worth of Starbucks shares.
The letter stated that “We are writing in order to ask the Company to accept and follow through with the results of December 2021’s election.”
It stated that investors believe Starbucks should adhere to international standards, best practices, and the words of its employees about engaging in good-faith with workers to keep positive labor relations. “Effective Human Capital Management is a critical performance indicator which a growing number investors value.”
Starbucks has yet to respond to my request for comment about the remarks of the group.
In the letter, Starbucks is also accused of interfering in elections by closing its stores. sending top executivesRossann Williams was the Starbucks North America executive vice president, and Howard Schultz, their former CEO to Buffalo. These claims were denied by the coffee giant, who claimed it was responding directly to employees’ concerns.
I sincerely apologize to anyone who thought it was intimidation. Williams spoke to CNBC in a phone interview. We showed up and our partners were right. “We’d let them down and apologized.”
A federal labor case was filed by workers against Starbucks for illegal activities, including threats, intimidation, surveillance and harassment in response to the union push. Starbucks has refuted the accusations.
Starbucks Workers United claimed, too that Starbucks created a voting list which includes employees from other Buffalo areas who were temporarily assigned to vote cafes.
However, the results of Thursday are encouraging. the first successful attempt at unionizingSince its public listing nearly 30 years ago, the U.S. coffee giant has owned locations in America. It could have major implications for the restaurant industry.
Workers at Starbucks Elmwood Avenue branch voted 19-to-8 in favor to unionize under Workers United New York. Workers United New York is a branch the Service Employees International Union. At a second café on Camp Road, results were similar. Twelve workers voted against and eight voted for Starbucks. Additionally, the union claimed several ballots submitted were not included. The dispute over the ballots has prevented the decision on the third Cafe in Genesee Street. The deadline for both sides to challenge the National Labor Relations Board is December 16, and hearings might follow.
Starbucks shares rose slightly by 1% on Friday in trading. The company now has a market capitalization of $137 billion. The shares have increased more than 9 percent in the past year.
MKM Partners analyst Brett Levy stated in a Thursday note to clients that he does not believe the decision will impact Starbucks’ strategies or financial results immediately. Levy suggested that workers could see a pay increase if there is a greater push to unionize Starbucks. Baristas from Mesa in Arizona have filed for union elections.
Levy stated that if other restaurants follow Starbucks’ lead, Starbucks will be better placed to absorb the higher cost.
You can find the full text of this letter here:
Dear Mr. Johnson
The undersigned investors representing more than $1.3 trillion of assets under management are writing to inquire about how Starbucks responded to the unionization attempt by some of its employees (“partners”) at Buffalo, NY. In particular, we want to ask the Company to accept and act on the results of its December 2021 election.
While we support the formation of unions by Starbucks partners in Buffalo, there are concerns about claims in public reporting that may be incompatible with international standards. The Company tried to take the National Labor Relations Board process (NLRB), to obtain a single election in all of the stores within the area, instead of accepting the requests from the unions to be voluntarily recognised. The Company appears to be trying to make the NLRB process ineffective. This is not a good or neutral way to ensure a fair and free election.
However, the NLRB has stated that union election campaigns must be allowed to go ahead in “laboratory conditions.” Starbucks, however, is said to have taken a variety of measures to hinder and delay these efforts. It appears that the company has inadvertently intimidated workers by closing Buffalo-based locations of the organizing effort. The top corporate executives, managers, and company leaders were sent to additional training. Additionally, large numbers and partners were introduced to the stores upon the announcement of union filings. In addition, the Company has been reported as holding captive audiences and instructing employees how to access the “Partner Hub”. There, Starbucks employees were required to listen to and to read anti-union rhetoric. This included a meeting on November 6th with Howard Schultz, former CEO. Starbucks claims that this is standard practice, but the rapid and frequent changes indicate that they are trying to avoid union activity as much as possible.
Investors believe Starbucks should adhere to best international practices. We also agree with Starbucks’ own words on engaging in good-faith relations with workers. Investors are increasingly focusing on the importance of human capital management as a performance indicator. It is proven that partnerships between labor unions and companies can result in positive impacts on human capital. Unions allow workers to freely communicate with their managers regarding concerns, suggestions and other requests, without fear or retaliation.
Labor union formation is also an international human rights. Employees have the right to form their own unions. This is recognised by the OECD Guidelines for Multinational Enterprises and Universal Declaration of Human Rights. Companies and investors can see the importance of workers’ rights to organize and act together and engage in collective negotiations as a human right. It is also a good thing for society. Investors face reputational risks and legal concerns if it is accused of not respecting workers’ freedom to organize.
In keeping with international norms, we urge Starbucks Corporation to accept the Buffalo election results and to proceed according to them.
Sincerely,
Trillium Asset Management
Parnassus Investments
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