‘Your profitable and growing company is actually in crisis, and the best way out is to unionize and put a bunch of Democrats on your board!’ Yeah, right.
Reuters: “Anti-union efforts to cost Starbucks at least $240 mln, labor group tells SEC”
Sounds nefarious. Let’s dig a little deeper.
The “labor group” in question is the Strategic Organizing Center (SOC). The SOC was formerly known as Change to Win. It is a coalition of labor unions that split from the AFL-CIO in 2005.
The largest union in the SOC is the Service Employees International Union (SEIU). Starbucks Workers United, the union that claims to represent workers in about 400 Starbucks locations in the U.S., is an affiliate union of the SEIU. Since there are about 9,645 company-owned locations and 6,701 licensed locations in the U.S., the SEIU would like for many more Starbucks workers to be unionized.
So a group of unions that wants more Starbucks workers to be unionized, which includes the union that actually has unionized some of them, is opposed to Starbucks’ efforts to not unionize. Not that interesting.
But it gets weirder. The SOC’s letter to the SEC broke down the $240 million in “anti-union efforts.” Here’s what they said:
- $100 million in legal fees
- $40 million for consultants
- $13 million in productivity lost due to meetings and trainings
- $61 million in illegally denied tips and wages
- $26 million in illegal firings and store closings
When people think of “anti-union efforts,” they are probably thinking of consultants and workplace trainings specifically to discourage unionization. That would be the second and third bullet points, so $53 million (taking for granted that the estimated spending is accurate, which it might not be).
The first bullet point is largely because of lawsuits brought by unions and groups sympathetic to unions. So that cost would largely disappear if those groups stopped suing Starbucks. The fourth and fifth bullet points are contested questions. Starbucks does not think it’s breaking the law with its current business practices and is defending itself against union claims that it is.
So a big portion of the anti-union efforts from Starbucks are in response to pro-union efforts by groups that include the group that is now publicizing the costs of the anti-union efforts.
But it gets even weirder. The SOC includes the SOC Investment Group, which “works with pension funds sponsored by unions affiliated with the Strategic Organizing Center (SOC) . . . to enhance long-term shareholder returns through active ownership.” The pensions plans combine for over $250 billion in assets.
This letter against Starbucks is only one part of the SOC’s larger activist campaign against the company. There’s a whole website called “Brew a Better Starbucks” that outlines more of the SOC’s efforts. “Starbucks is a company in crisis,” the website says.
Really, the SOC wants Starbucks to be a company in crisis. Despite the SOC’s best efforts, Starbucks is not in crisis. Of course it faces plenty of challenges, as any company of its size would. But it’s stock price is doing fine, the company is profitable, its sales are growing, and it is opening more stores. Starbucks raised pay and benefits for its workers at the end of last year.
So the SOC has to mount this campaign to try to outrage investors who, looking at the facts, would not be outraged with the company’s performance.
In doing so, the SOC is implicitly admitting that unions are bad for Starbucks’ business. In one sense, they are bad because a big chunk of the anti-union spending the SOC is warning investors about exists only because of activism from unions and pro-union groups. In another sense, granting for sake of argument that the $240 million number is accurate, the SOC is essentially saying that it’s worth at least $240 million for Starbucks to remain mostly non-union.
And it probably is. Starbucks has a market cap of $105 billion and had net revenues of $36 billion in 2023. Blocking a progressive activist group from unionizing its employees is probably worth the money.
Lest you doubt the political intent of the SOC, part of its proposed solution in its letter to investors is appointing the following people to Starbucks’ board of directors:
- Wilma Liebman, who was appointed chairwoman of the National Labor Relations Board by Barack Obama
- Joshua Gotbaum, whose top government positions were in the Department of Defense, Treasury, and Office of Management and Budget under Bill Clinton
- Maria Echaveste, a White House deputy chief of staff and Department of Labor official under Clinton
“Your profitable and growing company is actually in crisis, and the best way out is to unionize and put a bunch of Democrats on your board!” Yeah, right.