Starbucks accused by labor coalition of 'broken' union strategy

Over 390 stores have voted to unionize

A coalition of labor unions is claiming that Starbuck's approach to dealing with its yearlong labor issues is "broken" and that the company has "lost its way." 

The Strategic Organizing Center said in a statement Tuesday that the coffee giant's "flawed human capital management strategy is the most critical issue facing the company," and that the "board’s failed oversight has cost shareholders, employees and customers." 

The group further claimed that the board has "tolerated an unacceptable level of reputational risk, endorsed a counterproductive approach to labor issues and permitted a flawed allocation of resources," which has negatively impacted shareholder value.

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It also insists that the board appoints new directors who have "expertise sorely lacking on the current Board." 

Starbucks San Francisco

A Starbucks coffee shop in San Francisco, California, US, on Thursday, July 28, 2022.  (David Paul Morris/Bloomberg via Getty Images / Getty Images)

Conversely, Starbucks told FOX Business that its "Board is stocked with world-class business leaders that bring the qualifications and expertise directly relevant to drive our current operations and future success." 

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About 396 Starbucks-owned stores have voted to unionize since 2021, when a store in Buffalo, New York, made history as the first store to do so, according to Starbucks Workers United, the group that has been leading the effort. Two more stores are slated to vote on Tuesday.

Still, that's only a fraction of its total U.S. store count, which notches over 16,400 locations to date. 

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Howard Schultz, who came out of retirement in April 2022 to serve as interim CEO, had been dealing with the brunt of the labor issues until Laxman Narasimhan took over last spring. 

Aside from a new CEO, the company also added five new board members in the past year. 

Starbucks protestors

Protesters outside the Starbucks at Oxford Street on November 17, 2022 in London, England.  (Guy Smallman/Getty Images / Getty Images)

Narasimhan has been in charge of overseeing the company's "reinvention plan," which was introduced last year to improve stores and the employee and customer experience as unionization efforts swept the nation. 

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Narasimhan had previously said that part of his work would include reinvigorating "our culture around what it means to be a partner at Starbucks."  

Starbucks told FOX Business that it has "continued to significantly invest in and improve their experience." Over 20% of profits have gone into wage increases, training and new equipment in the last fiscal year, the company said.