Starbucks has avoided a hostile boardroom takeover — for now. After a four-month campaign to seat three ex-bureaucrat union activists on the coffee giant’s board of directors, the Strategic Organizing Center (SOC), a multi-industry union conglomerate with virtually no ownership stake in Starbucks corporation, withdrew its nominees ahead of Starbucks’ March shareholder vote. But the fact that this battle took place at all is telling. More and more, unions are waking up to the fact that they can’t raise their numbers by appealing to workers directly. Instead, they’re heading to bureaucrats and boardrooms to get their way.
The SOC’s unlikely retreat is a victory for Starbucks, but it’s also a win for the SOC. Had the mega-union prevailed in its battle for the Starbucks boardroom, its proxies would have been saddled with two irreconcilable objectives. On the one hand, they’d be tasked with helping drive value for Starbucks shareholders by making decisions that profit the company. On the other, they’d be required to serve the interests, not of the comparatively few Starbucks workers they claim to represent, but of big labor’s biggest agenda: union density. That’s a pithier way of phrasing the labor movement’s goal of getting as many workers as possible to join unions, and thereby add to the existing surplus of union dues, by any means necessary.
The fact that the SOC, which prides itself on its grassroots-style organization model, tried to go around workers in order to seize power is proof of unions’ conviction that any strategy that profits them — even if that strategy ultimately costs both businesses and workers — is just. By capitalizing on an obscure Security and Exchange Commission rule that dictates how businesses are required to structure shareholder ballots for board elections, the labor monolith went to bureaucrats, not baristas, to get the job done.
Ironically, the rule itself, called the universal proxy rule, was first pushed by pension fund managers who similarly wanted the government to force businesses to shunt more corporate decision-making power to shareholders. As a result of the rule, activist shareholders with relatively little stake in a company’s success now stand a better chance of reshuffling boardrooms to push their own agendas while shielding themselves from workers’ and consumers’ more general demands — along with the fallout from poorly-designed company policies oriented toward their own advocacy goals.
Once again, when it comes to big labor, that goal is pointedly not worker empowerment. It’s union dues, achieved through union density — an objective that, more and more, runs directly counter to workers’ interests.
This is hardly the first time that unions have leveraged bureaucracy to subvert workplace democracy at Starbucks. Last year Starbucks Workers United successfully lobbied the National Labor Relations Board to block decertification petitions from employees at stores seeking to sever ties with the union, trapping them in relationships with representatives who did not speak for them.
A similar scenario was set to take place during the March shareholder elections. Not only does the SOC, which owns approximately $16,000 worth of Starbucks’ estimated $105 billion market capitalization, stand to profit little from Starbucks’ successes, the union giant, which represents a range of labor outfits — from the Service Employees International Union to Communications Workers of America to United Farm Workers of America — has virtually no interest in or knowledge of the needs of the approximately 8,000 unionized Starbucks employees it purports to back.
In theory, a thriving labor movement aims at deploying such coup-style strategies after winning the favor of the workers that spearhead its success. But this is the direct opposite of what’s happening today. Rather than being buoyed by the wave of employees flooding its ranks, the labor movement is instead hemorrhaging members and attempting to forge ahead by pushing against the current of worker sentiment. Unions’ numbers are dwindling. Grassroots tactics are withering. The workers of the world just aren’t uniting the way that unions would like. The solution, for today’s unions, is to invert their playbook, putting corporate and regulatory capture ahead of the will of the worker.
Instead of galvanizing worker sentiment to move policy and manage proxies, major unions have taken to exploiting regulations in order to drag employees along from the comfort of the director’s chair. But by winning a seat on the Starbucks board, each of the SOC’s nominees would have had to confront an ugly choice: Make decisions that favor union density at the expense of worker autonomy and shareholder value; or own up to the damage that coercive organizing tactics have done to the corporation’s and employees’ interests. They were smart to withdraw their bid.
