Bullish: Investors Target Union Busting at Starbucks and Apple
New York City public employees are using their retirement funds to defend unions.
The shareholder activism movement isn’t just growing, it’s innovating. New types of proposals, coalitions and tactics emerge as investors grow ever-more creative at leveraging their rights to shape companies for good. Stay in the know with our trend-watching column: Bullish.
Last month, investors submitted proposals demanding audits of workers’ rights at Apple and Starbucks, respectively. The filings come amid nationwide unionization movements at the two companies, which have allegedly responded to this swell of labor organizing with union-busting tactics like retaliatory firings and store closures. The National Labor Relations Board has called out both consumer giants for illegal anti-union activity.
Apple and Starbucks shareholders will likely have the opportunity to vote on the proposals at their annual shareholder meetings next spring. While the resolutions are non-binding, majority support would make it uncomfortable for boards to ignore the demand. Unionization at these companies has become a national story, and skirting investor pressure to detail how organizing efforts are handled would be (to use a technical term) a pretty bad look.
Both proposals stand a chance based on recent history. In March, a majority of Apple shareholders voted for two labor-minded resolutions targeting workplace discrimination and harassment. At Amazon, notorious for its own alleged union tampering, nearly 40% of shareholders this year supported a report on collective bargaining rights. Meanwhile, Microsoft recently adopted an agreement to remain neutral when workers organize, as some have at video game behemoth Activision Blizzard, which Microsoft recently acquired.
The new proposals seek an audit similar to the one proposed at Amazon. Investors want to know how the companies honor stated commitments to collective bargaining and freedom of association, and how they plan to remedy any interference. You can read the Starbucks proposal here and Apple’s here.
NYC Public Pension Funds in Action
One of the coolest things about the proposals is who led them. Both resolutions were spearheaded by New York City Comptroller Brad Lander, who oversees $105 billion worth of stock owned by the city’s pension systems, retirement funds for public employees like teachers and firefighters. Through their pensions, New York City employees collectively own over $3 billion shares in Apple and around $155 million in Starbucks. (Trillium Asset Management, Service Employees International Union and others are among the proposals’ co-sponsors.)
Private and public sector unions are increasingly leveraging their investments to advocate as shareholders for workers’ rights and other causes. On the public side, New York has led the way; pensions for its municipal and state employees were responsible for more than two-thirds of the shareholder proposals introduced by public pension funds at Fortune 250 companies between 2006 and 2015. It helps that these unions’ retirement funds are huge. They have real weight to throw around.
Their focus on labor organizing rights specifically is new and may signal a return to movement-minded unionism, as labor action resurges around the country. (There have already been more strikes this year than all of 2021, and more workers were involved in work stoppages in 2018 than any year since the ‘80s!) There’s evidence that unionized workplaces boost shareholder value by, for instance, increasing employee retention, plus union busting is expensive, so defending them makes fiduciary sense. But these proposals also hint at a new focus on the greater movement. Keep watch for more.
“When companies blatantly disregard and oppose their employees’ fundamental right to organize, they put their reputation on the line,” Lander, the comptroller, said in a statement. “A new standard is emerging across the U.S: any company that wants to be considered a responsible employer must genuinely remain neutral when workers organize.”
