Starbucks shareholders seek input on labor rights review - letter

By Hilary Russ

NEW YORK (Reuters) -Starbucks should hire a law firm that is not hostile to labor unions as the coffee chain - under increasing scrutiny for its treatment of unionized employees - begins an outside assessment of its labor practices, four shareholders said in a letter on Thursday.

The shareholders, including Trillium Asset Management and New York City's public pension funds, said they met Starbucks CEO Laxman Narasimhan last month to discuss the review, according to the letter sent to the company on Thursday and seen by Reuters.

Trillium managed about $44 million of Starbucks shares as of March 31.

Investors and the U.S. Congress have criticized Starbucks labor practices as employees at more than 300 U.S. company-owned cafes voted to unionize since late 2021. So far, not one of the stores has finalized its first collective bargaining agreement.

Hundreds of complaints have been filed with the National Labor Relations Board (NLRB) accusing Starbucks of illegal labor practices such as firing union supporters, spying on workers and closing stores during labor campaigns.

"We respect the right of all partners to make their own decisions about union representation without fear of reprisal or retaliation, and we are committed to engaging in good faith collective bargaining for each store wherever a union has been appropriately certified," Starbucks said in a statement on Thursday.

It has also denied violating U.S. labor law and accused the NLRB of tilting the scales in favor of the union.

Even so, in March 52% of shareholders approved a proposal for an outside examination of whether Starbucks adheres to its own promises in its 2020 Global Human Rights Statement to abide by international labor standards.

So far, the company has not disclosed details of who will perform the review or how it will be conducted.

In Narasimhan's roughly 45-minute meeting on May 9 with the four shareholders, he touted tuition coverage, retirement savings and other benefits the company provides, but did not elaborate on the review itself, said Trillium's Chief Advocacy Officer Jonas Kron, who attended the meeting in Seattle, where Starbucks is headquartered.

The company pushed back its completion date for the review to the end of 2023, about three months longer than it previously said it would take.

In their letter, shareholders urged the company to select an assessor without a history of "union avoidance" practice. Littler Mendelson, the law firm used by Starbucks to handle union campaigns and negotiations, excels at keeping unions out of companies, it says on its website.

Starbucks' review should examine international markets, not just the United States, and look at its actions both before and after stores joined the Workers United union.

And it should get input from workers themselves, as well as propose remedies if the review finds instances of harm done or policies that don't support labor rights, the letter said.

The shareholders want an "ongoing dialogue" with Starbucks board members overseeing the assessment, including Microsoft CEO Satya Nadella.

Last year, Microsoft struck a neutrality agreement that paved the way for video game employees there to unionize, but Starbucks has rejected calls to sign on to such a pact.

(Reporting by Hilary Russ; editing by Jonathan Oatis)