Based on the SOC’s analysis, Starbucks’
aggressive opposition to employee organizing efforts has cost
shareholders at least $240 million in
undisclosed costs and liabilities
Believes Starbucks needs to immediately provide
full disclosure of the total costs and liabilities of its misguided
human capital management strategy in order for shareholders to make
fully informed voting decisions before the 2024 Annual Meeting
Encourages shareholders to support the SOC’s
three independent candidates for the Starbucks Board in order to
help improve oversight and safeguard the best interests of
Starbucks shareholders, customers and employees
The Strategic Organizing Center (the “SOC”), a shareholder of
Starbucks Corporation (Nasdaq: SBUX) (“Starbucks” or the
“Company”), today submitted a letter to the United States
Securities and Exchange Commission (the “SEC”), detailing what it
believes are failures by Starbucks to properly disclose material
information – including the full cost to date of the Company’s
aggressive and illegal anti-unionization efforts – that
shareholders have a right to know in advance of making voting
decisions prior to the contested Annual Meeting of Shareholders
(the “Annual Meeting”). The Annual Meeting is currently scheduled
for March 13, 2024.
As the letter states:
Since before the Proxy Contest began,
Starbucks has attempted to create a
smokescreen of positivity around its conduct concerning
its aggressive opposition to Starbucks workers’ efforts to
unionize, in many cases by violating federal labor laws. These
efforts are well documented. Moreover, the Company’s forceful
tactics have led not only to increasingly problematic human capital
management issues, but also substantial costs and liabilities that
the Company has never acknowledged or disclosed, but that the SOC
estimates to be at least $240 million to
date.
The SOC’s analysis includes the estimated total of litigation
costs and expenses, other categories of expenditures (including
employee lost time, communications and internal Starbucks staffing)
as well as liabilities associated with labor law violations
sustained by National Labor Relations Board (the “NLRB”) complaints
and/or labor judge determinations.
Based on the SOC’s analysis, Starbucks’ anti-union campaign
includes the following estimated costs and liabilities through
February 2024:
Estimated Costs Based on Company
Anti-Union Activity through February 2024:
Legal Fees: Litigation (State and Federal
Court, NLRB),1 Campaign Advice, Expenses
$100 million
Consultants and Internal Support:
Communications, Research, Training
$40 million
Store Employee Productivity Lost Time:
Captive Audience Store and Individual Meetings, Trainings
$13 million
Estimated Liabilities Based on NLRB
General Counsel Complaints and Administrative Law Judge Decisions
through February 2024:2
Illegally Denied Wages and Tips (Note:
This grows at a rate of $815,000 per week)
$61 million
Illegal Firings and Store Closings
$26 million
Total Estimated Expenditures and
Liabilities
$240 million
The letter also describes why the SOC believes that Starbucks’
proxy materials and other filings fail to provide an accurate
portrayal to shareholders:
Indeed, the Company spills a fair amount of
ink (in its proxy statement) on its “Reinvention Plan” and business
strategy to paint a rosy—yet misleading—picture of its purported
attention to its partners that acknowledges their importance while
obfuscating Starbucks’ true
approach to human capital management that informs the
Proxy Contest.3 In doing so, the Company tactically and
conveniently cherry picks what
it thinks the broader investing public should know about its
business and about the Proxy Contest.
In the letter, the SOC requests that the SEC require Starbucks
to fully disclose to shareholders the costs and liabilities
associated with its anti-union efforts.
The SOC believes Starbucks’ lack of disclosure and the
exorbitant cost to shareholders represent just the latest examples
of the current Board’s lack of oversight, counterproductive
approach to labor issues and flawed allocation of resources. For
these reasons – and to protect shareholder value – the SOC has
nominated three director candidates (the “SOC Nominees”), who are
ideally suited to help repair the relationship with the Company’s
workers and regulators while safeguarding the best interests of all
Starbucks’ stakeholders.
The SOC Nominees are:
- Maria Echaveste, a former senior White House official,
senior Department of Labor appointee and corporate attorney with
significant international relations and public company board
experience.
- Hon. Joshua Gotbaum, who has been a director of both
public and private companies with decades of experience in
corporate governance and change, as well as significant public
policy and government experience.
- Hon. Wilma Liebman, who possesses over 40 years of
experience in labor management, employee relations, wage
negotiations, public policy and law – including having served as
the Chair of the NLRB under President Barack Obama.
For the nominees’ full biographies, see here.
Shareholders can be part of ensuring Starbucks returns to the
right path for the future by using the BLUE proxy card to vote “FOR” each of
the SOC Nominees today. Shareholders can also vote for the SOC
Nominees on the Company’s White proxy card.
For more information, shareholders can visit:
www.BrewABetterStarbucks.com.
***
DISCLAIMER
This material does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities described
herein in any state to any person. In addition, the discussions and
opinions in this press release and the material contained herein
are for general information only, and are not intended to provide
investment advice. All statements contained in this press release
that are not clearly historical in nature or that necessarily
depend on future events are “forward-looking statements,” which are
not guarantees of future performance or results, and the words
“will,” “anticipate,” “believe,” “expect,” “potential,” “could,”
“opportunity,” “estimate,” and similar expressions are generally
intended to identify forward-looking statements. Any projected
results and/or statements contained in this press release that are
not historical facts are based on current expectations, speak only
as of the date of this press release and involve risks that may
cause the actual results to be materially different. Certain
information included in this press release is based on data
obtained from sources considered to be reliable. No representation
is made with respect to the accuracy or completeness of such data,
and any analyses provided to assist the recipient of this press
release in evaluating the matters described herein may be based on
subjective assessments and assumptions and may use one among
alternative methodologies that produce different results.
Accordingly, any analyses should also not be viewed as factual and
also should not be relied upon as an accurate prediction of future
results. Any figures are unaudited estimates and subject to
revision without notice. The SOC disclaims any obligation to update
the information herein and reserve the right to change any of their
opinions expressed herein at any time as they deem appropriate.
Past performance is not indicative of future results.
IMPORTANT INFORMATION
The SOC, the SEIU, Mary Kay Henry, Ahmer Qadeer, Michael Zucker,
Maria Echaveste, Joshua Gotbaum, and Wilma B. Liebman
(collectively, the “Participants”) filed a definitive proxy
statement and accompanying proxy card (the “Proxy Statement”) with
the SEC on January 25, 2024 to be used to solicit proxies in
connection with the 2024 annual meeting of shareholders (the
“Annual Meeting”) of Starbucks Corporation (the “Company”). All
shareholders of the Company are advised to read the Proxy Statement
and other documents related to the solicitation of proxies, each in
connection with the Annual Meeting, by the Participants, as they l
contain important information, including additional information
related to the Participants, including a description of their
direct or indirect interests by security holdings or otherwise. The
Proxy Statement and an accompanying BLUE proxy card will be
furnished to some or all of the Company’s stockholders and is,
along with other relevant documents, available at no charge on the
SEC website at http://www.sec.gov.
_____________________________________ 1 Litigation costs were
estimated based on the different types and number of NLRB charges
and proceedings litigated to date in the Company’s anti-union
campaign, including unfair labor practice charges, election
petitions, bargaining and settlements. These cases are published on
the NLRB’s website at: https://www.nlrb.gov/search/case/starbucks.
2 Liabilities were calculated for cases in which the NLRB General
Counsel has issued complaints or an ALJ has issued a decision
finding labor law violations regarding (1) illegally denied wages
and tips, (2) illegal firings and (3) illegal store closings. Wage
liability calculations include hourly pay, tips, accrued interest
and FICA payments. Wage liabilities were calculated through
February 17, 2024 for all workers who (1) were illegally denied
wage increases or certain benefits – like credit card tipping, (2)
were illegally fired or (3) who previously worked at an illegally
closed store. Wages were calculated based on the Company’s
published average wage of $17.50 per hour. See 2024 Proxy
Statement, at pg. 10. Estimated liabilities for store closings
includes: (1) estimated wage liabilities, (2) estimated shutdown
costs, (3) estimated net lost revenue and (4) estimated reopening
costs. 3 The Proxy Statement explains, at page 11, that one key
aspect of the Company’s latest reinvention plan is to “reinvigorate
partner culture,” and at page 1, that “various initiatives to
improve the partner experience” are “core” to the reinvention plan.
See also 2024 Proxy Statement at page 10 (“Our partners are—and
always have been—core to Starbucks overall business strategy, which
is why our company, under the direction of the board, has made, and
continues to make, significant investments in our partners.”).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240216270911/en/
Investor Contact Okapi Partners Bruce Goldfarb / Pat
McHugh, (877) 285-5990 info@okapipartners.com Media Contacts
Longacre Square Partners soc-sbux@longacresquare.com
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Apr 2024 to May 2024
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From May 2023 to May 2024