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Starbucks takes hard line on unions, insists will ‘come to the table’ with Buffalo workers

Starbucks (SBUX) on Monday reiterated its tough stance against unionizing, saying that while the movement was not in the best interests of its workforce, it would “bargain in good faith” with one location that voted to organize.

Recently, partners at a store in Buffalo scored a big win after voting to form the coffee giant's first ever union. On Friday, the National Labor Relations Board (NLRB) confirmed the vote, according to an internal memo obtained by Yahoo Finance. Yet the Seattle-based coffee chain remains opposed to the effort.

“From the beginning, we’ve been clear in our belief that we do not want a union between us as partners, and that conviction has not changed,” Rossann Williams, Starbucks EVP and president of U.S. Retail and Canada wrote to all U.S. partners, which Starbucks call its employees.

She added that: “We have also said that we respect the legal process,” insisting the company would "bargain in good faith with the union that represents partners in the one Buffalo store that voted in favor of union representation. Our hope is that union representatives also come to the table with mutual good faith, respect and positive intent."

The 50-year-old company actively lobbied against the Buffalo effort, saying it's more than 8,000 company-owned U.S. stores operate best when it works directly with its employees.

Voting wrapped up last week, where a second cafe narrowly rejected the measure, and a third coffee shop is still waiting on results amid a number of challenges to individual ballots.

Starbucks Workers United, a union representing the workers, filed objections with the NLRB for two elections on Thursday. Union organizers claim that Starbucks “dramatically” and “negatively” affected the results of the vote at the second cafe store.

Meanwhile, union representatives of the Buffalo Starbucks location will begin to negotiate a contract for better wages, benefits and working conditions.

It’s unclear when the results for the third store will be finalized. However, the Starbucks union movement has now spread to Arizona and Boston, as workers at two locations in the city are taking up their effort to form a union.

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Starbucks to ‘stay true to Mission and Values'

The upscale coffee giant is one of many companies confronting a pandemic-era reckoning with a stressed out and underpaid workforce, and has moved to address quality of work and pay issues.

In late October, Starbucks announced its plans to increase all U.S. hourly wages to at least $15 an hour, up from the current $12 rate, by the summer of 2022. This will bring the average pay for all U.S. Starbucks’ hourly partners to nearly $17 per an hour.

The memo sent Monday morning emphasizes the company’s desire to remain directly connected with its partners.

“We stand for fairness and equity for our partners. We stand for growing and learning together," executives wrote.

"We stand for the Starbucks Experience, and building a company together where partners and the business can thrive and share success. Most importantly, we always stand together as one Starbucks. Always,” the letter said.

Shares of Starbucks have been mixed, losing ground recently but up 5.2% year-to-date. Analysts continue to view the vote as neutral to the coffee giant’s bottom line if the unionization takes hold, given its vast resources and pricing power.

“We do not believe the recent news creates a need to adjust our model at this time, but have chosen to provide a backdrop scenario analysis to assess what it could mean, should the situation become more pervasive," Brett Levy, executive director at MKM Partners, wrote in a research note last week.

While reiterating the stock as a "Buy," Levy said higher labor costs could push up operating expenses across 15% of its stores, translating into a bottom-line hit of around 3%.

Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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