Hours after former Chief Executive Howard Schultz was accused of union-busting in front of a congressional committee, Starbucks Corp. disclosed Wednesday that investors have asked for a third-party assessment of the coffee chain’s commitment to worker rights.
According to Starbucks’ SBUX, +1.92% filing with the Securities and Exchange Commission on Wednesday afternoon, a shareholder resolution seeking an independent report was approved with 52% of votes at its annual meeting last week.
Many employees and Starbucks Workers United have accused Starbucks of union-busting practices, and of failing to bargain in good faith with unions that have formed at nearly 300 of its U.S. locations. Last week, employees went on strikes and held rallies calling on Starbucks to change how it handles unionization efforts, and U.S. Sen. Bernie Sanders took those allegations directly to Schultz in a Wednesday committee hearing.
“Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country,” Sanders said.
See: Howard Schultz tells Bernie Sanders that Starbucks ‘doesn’t need a union’
The company has denied those accusations, saying that the union has refused to bargain without preconditions, but the National Labor Relations Board recently said that Starbucks illegally refused to bargain with the union.
The New York City Retirement System and others submitted the proposal in September, saying they saw an “apparent misalignment between Starbucks’ public commitments and its reported conduct.”
“The overwhelming support of our proposal reflects a growing demand for increased transparency and an honest accounting of the discrepancy between Starbucks’ purported values and their antiunion behavior,” New York City Comptroller Brad Lander said Wednesday after the results were announced. “Today’s Senate testimony from former CEO Schultz continues to ring hollow against the numerous complaints from workers.”
In its proxy, the company said it was undergoing a human-rights impact assessment. Sabrina Jenkins, general counsel for Starbucks, said during the Q&A session at the company’s annual general meeting last week that the independent assessment will include a look at the principles of freedom of association and the right to collective bargaining.
“That’s a broader commitment than the shareholder proposal’s request,” Jenkins said.
A Starbucks spokesperson declined to comment Wednesday, pointing to this message included in the company’s filing: “Starbucks is undertaking an independent, third-party human-rights impact assessment, which will include a deeper-level review of the principles of freedom of association and the right to collective bargaining… It is clear from the vote result in the proposal that our investors share our commitment to our partners, and we will continue to improve the partner experience by engaging them on our industry-leading, partner-first initiatives.”
Two influential proxy advisory firms had both recommended that shareholders vote for the proposal. Glass Lewis expressed concern about the “high-profile nature of the controversies” surrounding the company’s handling of the unionization push.
Institutional Shareholder Services said: “There seem to be credible reasons that may lend support to various accusations raised by the [National Labor Relations Board], Starbucks, and Workers United… The proposed third-party assessment would benefit shareholders by cutting through some of the noise and helping them evaluate the company’s management of any related risks.”
In-depth: Unions’ push at Amazon, Apple and Starbucks could be ‘most significant moment in the American labor movement’ in decades
The four other shareholder resolutions failed to receive a majority vote: a report on plant-based milk pricing; adopting a policy on CEO succession planning; a report on operations in “Communist China”; and establishing a committee on corporate sustainability related to safety issues.
