Assault on the board: how workers got Starbucks to the negotiating table

At Starbucks board meetings there are always two empty chairs.

One represents the workers and the other the clients.

It was the idea of ​​Howard Schultz, CEO of the company on several occasions and who transformed the company into the largest coffee shop chain in the world.

He assured that it was a way of always keeping in mind that decisions had to be made thinking about them, the employees, and not the shareholders.

But the workers of the coffee company have grown tired of the metaphor: they have decided to become shareholders and make the eternal empty chair no longer so.

And the future of work also depends on new formulas for union struggle.

In December 2021, the first Starbucks union was formed in Buffalo, New York.

Since then, nearly 10,000 workers at more than 400 of the 9,000 coffee shops in the United States have chosen Starbucks Workers United (SWU) as their representative.

But it was not until February 2024 that the company agreed to begin collective bargaining of the agreement with the union.

After more than two years of protests, it has been a maneuver of shareholder activism that has made it possible.

“The activist shareholder is the one who publicly says that he does not agree with certain company practices and carries out a campaign to push in another direction,” explains Borja Miranda, head of mergers, acquisitions and activism at Morrow Sodali, a firm specialized in studying the shareholders of companies.

“They are shareholders who do not have enough power and seek to add support to achieve a critical mass capable of approving what they ask for,” he points out.

That was the objective of the workers when they used their actions to propose three names to occupy a seat on the new board of directors, taking advantage of the shareholders' meeting that was held on March 13.

The proposal was presented by the Strategic Organization Center (SOC), a small section within a coalition of unions that brings together more than 2 million workers.

One of its branches is an investment fund, with the same name, that manages the retirement money of its members so that they receive a better pension.

That money, converted into shares, has allowed them to put pressure on other large companies such as Amazon, McDonald's or Tesla.

The $16,000 in Starbucks shares they own represent less than 0.001% of the total, but together with the candidate proposal, they managed to send a message to shareholders.

“At a time when Starbucks has set an ambitious goal of opening more than 17,000 new stores by 2030, it cannot waste any more resources fighting its own workers,” they said in a statement.

Starbucks has spent $240 million in the last year, according to the SOC, and its expenses include, among others, the payment of lawyers and the cost of sanctions for illegal layoffs and irregular closures of some stores after the unions' victory.

Allegations that Starbucks spokesperson Andrew Trull denies: “Our board of directors works to ensure that our movements as a company remain aligned with the principles of freedom of association and proper collective bargaining.”

Address shareholders

Starbucks has a reputation in the United States for offering higher salaries and better health insurance than other companies in the sector.

And although the coffee chain has made an effort to deny any movement that could be classified as “anti-union,” the investment fund has accused management of deteriorating the company's prestige: “Starbucks is a company in crisis [... ] that has not achieved good human capital management, seriously damaging the perception that customers, employees and shareholders have of the company.”

These types of arguments are increasingly common among shareholders.

“Small investors are beginning to emerge, who are not activists by nature, but who believe that some company practices have to change,” says Borja Miranda.

The expert assures that, of the almost 2,000 activism campaigns known worldwide in the last year, the vast majority have been related to governance, environmental policies and social issues.

For the head of activism at Morrow Sodali, most of the time the objective is to “safeguard the value chain of companies”, preserve their prestige.

Taking advantage of a shareholder meeting to pressure the company is just one more strategy within a union movement that is resurgent in the United States.

Since 2021, the number of strikes has doubled and the number of workers involved has increased almost fourfold, according to the ILR School.

That same year, the first unions were created at Starbucks thanks to a strategy called

"salting

", rescued from the early 20th century and which consists of infiltrating a company with the sole objective of creating a union organization.

Arjae Rebbmann was one of the infiltrators in one of those cafeterias.

“It was pretty easy to get the job,” recalls Rebbmann, “fast food companies rotate a lot of staff and don't worry about who they hire.”

He tells EL PAÍS that throughout the interview he kept his arms crossed so that the hammer and sickle tattooed on his left forearm could not be seen.

“The difficult thing about

salting

is that you have to work for months to gain everyone's trust, at the same time you have to deal with the company's anti-union propaganda and the threat of dismissal for workers who organize,” he explains. .

This same tactic has worked at Amazon, where in April 2022 they managed to legalize the company's first union.

“They are the line to follow, the

Starbucks Workers United

together with the

Amazon Labor Union

were the first to start moving after 40 years without a union movement,” says Jaime Caro, specialist in the American labor movement and contributor to the specialized newspaper

El Orden Mundial.

.

Inflation, the post-pandemic effects and a political left that is regaining its momentum, among which is the SOC, would be behind this resurgence of American unionism.

And the SOC is, in addition to a collation of unions with an investment fund, a school of unionists linked to left-wing parties in the United States, such as the DSA (Democratic Socialists of America), where well-known figures such as Bernie Sanders are active. or Alexandria Ocasio-Cortez.

“Their intention is to train unionists capable of carrying out more radical fighting and organizational strategies, such as demanding large salary increases or salting

,

strategies that are unthinkable for traditional unions,” says Caro.

The UAW, the auto industry union, called in 2023 one of the largest strikes in United States history.

At the head was Shawn Fein, a leader on whom the label of radical hangs due to his leftist positions and his firmness in negotiations.

The strikes at Stellantis, Ford and General Motors were closed with a 25% salary improvement.

“This has had a contagion effect that has dragged into much less combative unions, such as the casino workers in Chicago and Atlanta, or the service workers in Las Vegas, who have signed a 25% increase, only with the threat of a strike. ”, points out the expert in the labor movement.

The proposal of the three Starbucks candidates to the shareholders meeting has been one more step in the union strategy.

Miranda believes that this can lead to “companies paying more attention to social aspects and regulators encouraging companies to move in this direction.”

“It is a warning to sailors, a call to be aware of new trends,” she says.

Starbucks union victory

On February 27, Starbucks released a statement: “We have agreed with Workers United that we will begin negotiations to establish a foundational framework for collective bargaining, including a fair process for organizing and the resolution of some pending litigation.”

Additionally, the company has committed to recognizing some improvements in working conditions announced in 2022 for all employees represented by the union.

A giant step forward made possible by thousands and thousands of us joining together and speaking out…

🚨THIS IS HUGE.🚨 pic.twitter.com/zZZ57Am0Bm

— Starbucks Workers United (@SBWorkersUnited) February 27, 2024

With this victory, on March 5, a week before the shareholders meeting, the SOC investment fund announced its withdrawal: “We believe it is time to recognize the progress made and allow the company and its workers to focus on go ahead.

Therefore, we withdraw our nominations.”

In that same statement they asked the rest of the shareholders to continue "monitoring the performance of the Board and Starbucks' approach to labor relations."

“When we said we were going to organize at Starbucks, they called us crazy, but we did it, and we won,” Rebbmann now says proudly.

The new union movements in the United States are putting pressure on several fronts, the 25% wage increase has become a benchmark for many labor conflicts and support for the work of unions reaches 67%, figures that have not been seen for a long time. more than 60 years old, according to a Gallup poll.

On the new Starbucks board, the chair, for now, will remain empty, but the workers will be more present than ever.