Starbucks investor group raises alarm over company’s ongoing financial woes, labor law violations

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Ahead of Starbucks’ third-quarter earnings release, a group of Starbucks investors — Strategic Organizing Center (SOC) Investment Group — sent a letter to the company’s executive board directors criticizing Starbucks for both its ongoing financial challenges and alleged labor law violations. 

“Since the board named Mr. Niccol CEO, Starbucks has continued to struggle financially, and the board’s actions have failed to reassure us that it has learned anything from the past four years,” the letter reads, citing “continued operational and financial underperformance, despite multiple turnaround plans,” “little to no progress in reaching an agreement with Starbucks Workers United” and the company’s mandatory return-to-office policy, though Niccol is not required to comply with it. 

SOC Investment Group, which holds a small stake in Starbucks, sent this letter to the company’s board last month around the time of CEO Brian Niccol’s one-year anniversary at the company, and has continued to speak out against underperformance, stating, “By some measures, Starbucks is actually doing worse than the July 2024 quarter-end that prompted the board to hire Niccol.”

SOC Investment Group called out the company for awarding Niccol a bonus despite not yet turning Starbucks around and requested a meeting with the board. 

This is not the first time this investor group has clashed with Starbucks leadership. In November 2023, SOC Investment Group provoked a proxy battle with the board, citing issues with the Workers United union, and nominated three directors to the board. The group has also previously challenged other companies on employees’ rights issues, including McDonald’s and Uber. 

Additionally, leading up to the earnings release on Wednesday, unionized Starbucks baristas are preparing for a possible strike around Red Cup Day in November. Starting this week, baristas at the 650 unionized Starbucks cafes began voting on whether to authorize a strike to demand union contract certification. 

In preparation for this possible strike, baristas across 60 cities began picketing to call attention to their cause.

“Starbucks knows where we stand,” Michelle Eisen, Starbucks Workers United spokesperson, said in a statement. “They know our demands: more take-home pay, better hours, resolving legal issues. It’s time to finalize a contract this fall before the all-important holiday season.”

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Workers United president Lynne Fox recently wrote a column detailing the progress (or alleged lack thereof) the company has made since beginning to bargain in February. The union rejected the first contract offered in April, which according to Fox, “had only minuscule improvements.” The union was told leadership would go back to the bargaining table after the Starbucks barista conference in June, but not much progress has happened since then, she claims.

NRN reached out to Starbucks for comment but did not receive a response in time for publication.

Contact Joanna at [email protected]

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