Starbucks boardroom fight ends after union makes progress in negotiations By Reuters

© Reuters. Starbucks logo at a store in Los Angeles, California, March 10, 2015. REUTERS/Lucy Nicholson/File Photo

Svea Herbst-Bayliss

(Reuters) – A coalition of unions said on Tuesday it was ending a board fight at Starbucks (NASDAQ:) after the coffee chain agreed last week to try to reach a labor agreement.

The Strategic Organizing Center, a North American union federation, has announced three candidates for the coffee chain’s 11-member board of directors, a week before Starbucks investors are scheduled to elect directors who will oversee corporate strategy at the company’s annual event on March 13. I withdraw the order. meeting.

The union confirmed what Reuters had previously reported.

Many large investors are optimistic that Starbucks is committed to change and has a plan to repair relationships with its employees, the people told the coalition, which includes the parent company of Workers United, which represents Starbucks employees.

“Investor concerns about the board and management’s response to ongoing unionization efforts at Starbucks have been loud and clear, but last week’s joint announcement by the company and worker unions of an agreement framework signals a fundamental change in direction. “It was welcome news.” New York City Comptroller Brad Lander told Reuters:

Starbucks said Tuesday it was grateful for the coalition’s decision, adding that its board was focused on “creating long-term value for all stakeholders, including partners, shareholders, customers and farmers.”

“Starbucks has always been committed to doing the right thing, and most importantly, for our partners who are at the core of our business,” Starbucks said in a statement.

The fight was closely watched on Wall Street because it was the first time a union had used a tool traditionally used by hedge funds to secure a seat on a company’s board.

The union argued that Starbucks’ resistance to unionization, which began in 2021, damaged the brand and put a burden on the stock price, causing damage to shareholders.

Another major boardroom battle this year was between Disney and two activist investors, Trian Fund Management and Blackwells Capital.

The coalition has hired lawyers, representation lawyers and communications firms that typically work with large activist hedge funds on large-scale campaigns. The White House, the National Labor Relations Board, nominated three candidates with economic policy expertise, and shareholders, including large index funds, said Starbucks needed better oversight to improve labor relations. I was trying to convince you.

“SOC Investment Group has led an effective campaign with qualified candidates committed to protecting workers’ fundamental rights and advancing long-term value, and the announced halt to the contentious voting rights battle is a win for workers and shareholders,” Lander said. “he added.

He said Starbucks’ investors now expect the company “to continue investing in its workforce, and we will continue to participate.” As of the end of December, the city owned $157 million worth of Starbucks, or 1.64 million shares.

Only about 370 Starbucks stores in the U.S. are unionized, but the movement and its proxy fight, which began in November, have helped expand support for organized labor after unions won concessions for Hollywood writers and auto workers last year. It has been utilized.

Now, having failed to secure any concessions from the company, the coalition is pinning its hopes on last week’s news that Starbucks and the union representing its workers will work to establish a “fundamental framework” that could lead to collective bargaining and a resolution. of litigation.

As the news becomes public, the coalition may claim victory, said Lawrence Elbaum, co-head of the shareholder activist defense practice at law firm Vinson & Elkins. “Having achieved some of the changes the group was pushing for, this could be a moment that inspires others to launch copycat campaigns.”

The coalition’s decision comes as two major proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, last week urged Starbucks shareholders to support all 11 of the company’s directors, leaving the coalition with insufficient grounds to secure seats. This is in accordance with the recommendation that he claimed was not made.

But ISS wrote that the coalition “achieved at least part of what it ostensibly set out to achieve.”