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Dozens of major shareholders push Starbucks on its handling of union activity as company faces labor board complaint

MarketWatch logo MarketWatch 3/17/2022 Levi Sumagaysay
© AP Photo/David Zalubowski

A formal U.S. labor board complaint this week that alleges Starbucks Corp. retaliated and discriminated against employees seeking to unionize in Phoenix coincides with a letter from a coalition of more than 75 shareholders urging the company to make changes in how it deals with growing unionization efforts.


Video: Starbucks employees want ‘more of a say’ in the workplace: Shift supervisor (FOX News)

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“The NLRB complaint confirms the concerns we expressed in the letter,” Jonas Kron, chief advocacy officer at Trillium Asset Management, told MarketWatch. “It serves to illustrate not only the reputational damage the company continues to bring upon itself, but the human and labor rights that are at stake.”

On Tuesday, Trillium and a coalition of shareholders that say they represent more than $3.4 trillion in assets wrote a letter to Starbucks Chief Executive Kevin Johnson — who is retiring next month, the company announced Wednesday — and independent board chair Mellody Hobson, urging them to “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 shareholders said they are concerned about allegations of union-busting as at least 120 Starbucks stores have filed to take unionization votes.

The regional National Relations Board complaint includes allegations of retaliation against two union-supporting employees at a Phoenix location. Starbucks is accused of writing up an employee for instances of “previously tolerated” behavior after she talked to fellow employees about wages and working conditions. Another employee was eventually terminated after denying her scheduling-availability requests. Other allegations include surveillance of employees engaged in union and protected concerted activities.

A Starbucks spokesman said Wednesday: “A partner’s interest in the union does not exempt them from the standards we have always held. Claims of anti-union activity are categorically false.”

Hobson, the company’s board chair, said at the annual general meeting Wednesday that the company is “negotiating in good faith, and we want a constructive relationship with the union.” But she added that “50 years of experience also shows us that by having a direct relationship with our partners, we have been able to grown and succeed.”

Kron, who expressed disappointment about the meeting and what he said was the company’s lack of meaningful addressing of the labor issues raised by the shareholders’ letter and the NLRB complaint, said “I think there is a big disconnect going on here.”

If an administrative law judge decides the regional NLRB office’s charges hold merit, the company will among other things be ordered to post in all Starbucks locations in the U.S. and its territories about employees’ rights to engage in protected activities. The company also would have to make the terminated employee, Alyssa Sanchez, whole for the losses she suffered. Starbucks would have the option to appeal to the federal NLRB in Washington, D.C.

The complaint in Phoenix is similar to allegations of retaliation elsewhere mentioned by the shareholders in their letter, whose lead signatories also include Parnassus Investments, SOC Investment Group, and New York City Comptroller Brad Lander.

In their letter, the shareholders cited growing public support for unions and recommended the company stop anti-union communications with employees and commit to negotiating with unions in good faith.

Kron said it is the second such letter Trillium and Parnassus have written to the company. He said “the company did respond to the first letter [written in December] and we met with them. But the meeting left us with continuing if not growing concerns and led to the second letter.”

The stock was up 7.5%, but has fallen 19% in the last 12 months, while the S&P 500 has gained 9%.

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