Unions That Pressure Companies They Are Targeting Through Shareholder Initiatives Face A Reckoning

by | Jun 12, 2024 | Bargaining/Negotiations, IBT, Labor Relations Ink, Labor Relations Insight, Leadership, Legal, News, SBWU, Sean O'Brien, SEIU, Shawn Fain, Starbucks, Trending, UAW, Union Leaders, Union Leaders, Union Organizing, Unionized Company, Unions, Workers United

Late last year, a Starbucks mystery move left some observers wondering why the coffeehouse giant requested to reopen contract negotiations with the SEIU-affiliated Workers United six months after negotiations ended. Starbucks has now been negotiating en masse with delegates from over 400 cafes to develop a bargaining framework for individual stores.

A considerable factor in Starbucks’ decision: We previously discussed how the Strategic Organizing Center (SOC) – a labor coalition that includes the Service Employees International Union (SEIU) and Teamsters and is a Starbucks shareholder – influenced other shareholders to approve an independent assessment of Starbucks’ labor policies. Additionally, SOC drove a proxy fight by nominating alternate board members to replace the company’s board members to pressure Starbucks into returning to the bargaining table.

This latter tactic worked, and SOC pulled their nominees after Starbucks made the aforementioned move of reopening negotiations.

However, there are questions about how this union coalition funds such fights. Government officials want answers, especially when unions use member pension funds for political purposes, i.e., to strongarm companies on Environmental, Social, and Governance (ESG) issues within shareholder initiatives.

Emphasis on the “S” in ESG.

Unions are using the S to essentially scare shareholders into believing that policy changes must happen to protect a company’s bottom line. The Wall Street Journal points out that Anti-ESG campaigns are picking up steam, but that “[m]ost shareholder proposals fail, whatever the politics.” In all cases, these campaigns’ funding must come from somewhere.

Rep. Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, is now scrutinizing such shareholder activism. In a letter to the AFL-CIO, SEIU, and Teamsters leadership, Foxx asks fifteen questions, including the following:

  • “How do you vet shareholder proposals with your membership?”
  • “Has your union targeted shareholder proposals at companies it is attempting to organize?”
  • “Has your union used shareholder meetings as a means of encouraging companies to sign statements of neutrality or willingness to accept card check organizing?”
  • “What expenses has your union incurred in its shareholder activism activities? What is the source of funds for these expenses? Have pension plan assets been used to fund any of these expenses?”

The union leaders were required to respond by June 12 so more fireworks could soon begin.

Companies recently impacted by shareholder advocacy include Starbucks, Chipotle, Delta Air Lines, Netflix, Target, and DoorDash. Earlier this year, the SOC also lobbied the U.S. Securities and Exchange Commission to ask Starbucks to disclose how much money it has spent responding to the chaos caused by Workers United. It makes sense that unions now explain how much member retirement funds they funnel into pressuring companies.

Reportedly the number of ESG “Social” campaigns in 2024 is shaping up to be four times that of 2023. The lawmaker inquiry couldn’t come soon enough.

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