Investors call on Starbucks to restart negotiations with unionized workers

New York, NY – Investors including SHARE, New York City Comptroller Brad Lander, PIRC 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 the union and promptly reach an agreement.

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.

“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.”

“As investors committed to the long-term success of Starbucks, we know that poor labour 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 labour 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 labour 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 shares 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.

After the shareholder proposal and the third-party assessment, there were positive developments in February 2024, when Starbucks and Workers United 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 labour 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 top, restart negotiations, and reach a first contract with SBWU. Re-prioritizing these efforts can show that the company is focused on positive labour 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.

For more information or to arrange an interview, contact SHARE Communications Manager Adam Burns at aburns@share.ca.