Yahoo Finance Starbucks’ new CEO has ‘a great opportunity to correct the ship and just listen’: Union organizer
From the Street's perspective, the hearing was a "non-event." Shares are up nearly 2.5% in the past five days.
Starbucks Workers United, the labor group behind the union push at Starbucks (SBUX) is turning its efforts to new CEO Laxman Narasimhan.
Following a more than three-hour hearing before the Senate HELP (Health, Education, Labor, and Pensions) Committee on Wednesday, at which former CEO Howard Schultz took the stand over accusations that Starbucks has "waged an aggressive and illegal union-busting campaign," union organizer and former barista Jaysin Saxton told Yahoo Finance that Narasimhan has an opportunity to turn the tale around.
"He has a great opportunity to correct the ship and just listen and that's all we're asking is just listen and come to the table with us and give us the respect that we deserve," Saxton, who also testified at the hearing, told Yahoo Finance.
"I hope the new CEO is watching the hearing...I hope he heard us as well as Howard Schultz as well as the senators," he said. Per a complaint from the NLRB complaint, Saxton was fired after leading an effort to unionize his store.
In the hearing, Schultz said the coffee chain has repeatedly tried to negotiate with the union, but prefers face-to-face meetings instead of over Zoom (ZM).
"We don't know, if there's a Zoom meeting, who is taping the meeting, who's in the background...whether or not they are part of the company, part of the union or whatever," Schultz said, noting that scheduling meetings has also been difficult due to an agreement made by the union to negotiate by individual store.
"We've tried to set up over 365 meetings ... It is a very difficult scheduling issue...we should not be held accountable for not showing up when all we're asking for is face-to-face bargaining."
In response to that, Saxton said, "I don't know why that's such a sticking point for Starbucks... The shareholders can come to the meetings through Zoom. But for us workers, we are expected to show up face to face with them and these are the same people who have been intimidating and telling us that we could lose all of our benefits, threatening our livelihoods. Some of us don't want to go and sit face to face with that," he said.
Last week, ahead of the company's annual meeting, Narasimhan sent a letter to its employees (or what Starbucks calls partners) saying he plans to "reinvigorate our culture around what it means to be a partner at Starbucks." He also plans to work in stores for a half day each month to stay "close to the culture and our customers."
At that meeting, shareholders approved a proposal for an independent third-party assessment of Starbuck's commitment to worker rights. Saxton claims Starbucks cuts hours for employees, impacting workers' ability to reach an hourly requirement for benefits.
Wall Street's perspective: The hearing was a 'non-event'
As far as the Street's perspective, the hearing fell by the wayside. Compared to a year ago, shares are up more than 10%. In the past five days, shares are up nearly 2.5%.
Cowen's Andrew Charles said, "We view Howard Schultz's Senate testimony as a non-event for shares and argue unionization is declining in importance," with a recent slowdown in the pace of unionization efforts. About 300 stores out of the total 9,000 U.S. company-owned stores have voted yes to unionize.
Nick Setyan of Wedbush agreed.
"Wall Street isn't going to care about this for a long time. Until it becomes like a big enough issue to care, as of right now, the consensus is that this is going to take care of itself without impacting Starbucks in a meaningful way," he said to Yahoo Finance.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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