Subject: Unions That Pressure Companies Through Shareholder Initiatives Face A Reckoning: LRI INK

June 13, 2024

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Unions That Pressure Companies They Are Targeting Through Shareholder Initiatives Face A Reckoning

by Kimberly Ricci

Late last year, a Starbucks mystery move left some observers wondering why the coffeehouse giant requested to reopen contract negotiations with the SEIU-affiliated Workers United six months after negotiations ended. Starbucks has now been negotiating en masse with delegates from over 400 cafes to develop a bargaining framework for individual stores.

 

A considerable factor in Starbucks’ decision: We previously discussed how the Strategic Organizing Center (SOC) – a labor coalition that includes the Service Employees International Union (SEIU) and Teamsters and is a Starbucks shareholder – influenced other shareholders to approve an independent assessment of Starbucks’ labor policies. Additionally, SOC drove a proxy fight by nominating alternate board members to replace the company’s board members to pressure Starbucks into returning to the bargaining table.

 

This latter tactic worked, and SOC pulled their nominees after Starbucks made the aforementioned move of reopening negotiations.

 

However, there are questions about how this union coalition funds such fights. Government officials want answers, especially when unions use member pension funds for political purposes, i.e., to strongarm companies on Environmental, Social, and Governance (ESG) issues within shareholder initiatives. 

 

Emphasis on the “S” in ESG.

 

Unions are using the S to essentially scare shareholders into believing that policy changes must happen to protect a company’s bottom line. The Wall Street Journal points out that Anti-ESG campaigns are picking up steam, but that “[m]ost shareholder proposals fail, whatever the politics.” In all cases, these campaigns' funding must come from somewhere.

 

Rep. Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, is now scrutinizing such shareholder activism. In a letter to the AFL-CIO, SEIU, and Teamsters leadership, Foxx asks fifteen questions, including the following:

  • “How do you vet shareholder proposals with your membership?”

  • “Has your union targeted shareholder proposals at companies it is attempting to organize?”

  • “Has your union used shareholder meetings as a means of encouraging companies to sign statements of neutrality or willingness to accept card check organizing?”

  • “What expenses has your union incurred in its shareholder activism activities? What is the source of funds for these expenses? Have pension plan assets been used to fund any of these expenses?”

 

The union leaders were required to respond by June 12 so more fireworks could soon begin.

 

Companies recently impacted by shareholder advocacy include Starbucks, Chipotle, Delta Air Lines, Netflix, Target, and DoorDash. Earlier this year, the SOC also lobbied the U.S. Securities and Exchange Commission to ask Starbucks to disclose how much money it has spent responding to the chaos caused by Workers United. It makes sense that unions now explain how much member retirement funds they funnel into pressuring companies.


Reportedly the number of ESG “Social” campaigns in 2024 is shaping up to be four times that of 2023. The lawmaker inquiry couldn’t come soon enough.

The Teamsters + A Flailing Independent Union = A Team-Up For Disaster?

by Kimberly Ricci

The Teamsters (IBT) worry about their own extinction. The overall downward trend of union membership hit the union heavily as their current 1.3 million membership is nowhere near their mid-1970s heyday of 2.2 million. Also, the Teamsters’ big contract “victory” at UPS led to President Sean O’Brien fleeing from questions about broken promises. 


The Amazon Labor Union (ALU), meanwhile, wants a bailout in more ways than one. The independent union stumbled into a wall after its only victory at Staten Island’s JFK8 warehouse in 2022, followed by failed votes and withdrawn petitions elsewhere. The union also still doesn’t have a first contract and began 2024 with “-$48,000 in net assets.” Compare that to the Teamsters’ claimed $300 million strike fund.


Then there would be the ALU’s plentiful infighting. President Chris Smalls is an overall embarrassment and a human money pit. Reports claiming that Smalls would not pursue reelection were wrong, and the ALU’s Democratic Reform Caucus, led by Connor Spence, wants to unseat Smalls.


Enter the Teamsters, who have been awaiting an Amazon opportunity.


The logistics giant is an IBT target: Amazon’s warehouses and fulfillment centers employ thousands of full-time workers a pop. That’s far more than the Teamsters’ occasional odd museum and cannabis wins, and the Teamsters are so eager for a win that they recently declared a false victory while claiming to unionize “Amazon drivers” who actually work for a third-party delivery firm. The union even picketed Amazon for those drivers.

 

The big chess move: The Teamsters moved to officially affiliate with the ALU with the goal of organizing warehouses in a Starbucks-like wave.

 

The basic terms: The Teamsters will financially back the ALU, which will function as “an ‘autonomous’ local union with the same rights and duties as a standard chapter.” The Teamsters will also provide organizing, strategic, and legal support to the ALU. And tellingly, The Teamsters “agreed to fund an internal officer election” for the ALU. 

 

What’s in it for the Teamsters? More members and more dues, baby.

 

Another takeaway: O’Brien and Smalls are scratching each other’s backs. 

 

Bloomberg Law reported that the affiliation agreement was “hashed out behind closed doors between” O’Brien and Smalls and later “stunned unsuspecting workers.” Connor Spence revealed that he was privy to initial discussions, but Smalls sealed the deal on his own, and the Teamsters’ executive board quickly ratified the agreement.

 

Have the Teamsters climbed aboard a sinking ship? Perhaps, but ALU members haven’t ratified their side yet. Some more related events:

  • The Teamsters successfully lobbied for the introduction of the Warehouse Worker Protection Act, which is already law in New York, into the U.S. House of Representatives. The combined timing of this lobbying and the ALU agreement is no coincidence.

  • The Teamsters kicked the International Association of Machinists and Aerospace Workers (IAM) hard. In doing so, O’Brien issued a memo that canceled a “no-raid” agreement, so get ready for the Teamsters to start poaching on IAM turf. The IAM has already shown that they can go poaching too, so the fallout could turn into a spectator sport.

 The irony of the Teamsters pretending to broker peace within the ALU while also effectively declaring war on the IAM? Priceless.

That Was Fast: UAW President Shawn Fain Leads This Edition Of Sticky Fingers

by Kimberly Ricci

There is never a shortage of bad actors engaging in union corruption and misconduct, and since Shawn Fain is everywhere, it only makes sense that he’s now being investigated for misconduct, too.

 

Yes, already! The overachieving Fain has only been on the job for about a year after promising to “reform” the union’s legacy of corruption. That seemed like a lofty venture, given that Fain won during the union’s first direct officer election, which turned out to be a “travesty of democracy” full of shady tactics, including voter suppression. Allegedly, he’s still not exactly on the straight and narrow.

 

What happened? Fain’s bravado recently hit a wall when the union lost an election among Alabama Mercedes workers. This served as a reality check, and in a sudden move, Fain took over oversight responsibilities for the UAW’s Stellantis Department while removing fellow “reformer” VP Rich Boyer from that part of his job. At first, this felt like damage control related to the failed election, given that Stellantis workers have been disappointed by layoffs, which could have influenced Mercedes workers while voting.

 

This week, however, Fain came under investigation by UAW Watchdog Neil Barofsky, who was federally tasked in 2021 with watching for corruption. The UAW head cheerleader has been accused of retaliating against his fellow union officers including Secretary-Treasurer Margaret Mock, who accused Fain of removing her from responsibilities without explanation. Yet the real kicker comes from the allegations received by Barofsky against Fain, who allegedly booted Boyer from Stellantis oversight because he “refused to engage in acts of financial misconduct to benefit others.” Yikes.

 

Let’s continue with a roundup of recent sticky fingers cases:

  • Twelve unions – including Communication Workers of America (CWA), Service Employees International Union (SEIU), Machinists (IAM), Teamsters, and United Steelworkers (USSW) – are being probed for fraud and corruption, with accusations coming from Education and the Workforce Committee Chairwoman Virginia Foxx. The congresswoman, who has recently been sending other high-profile letters to union presidents, seeks answers on allegations that union officers are guilty of embezzlement and accepting bribes.

  • SEIU Healthcare Illinois Indiana has been called out by members who believe that their union representation isn’t worth the dues that they are paying. A report revealed that this local’s officers splashed out enormous amounts of money, including $30,000 in pizza from a single restaurant in 2023, along with $1.1 million on flights, car rentals, catering, and hotels for “special events” without further explanation. Another $800,000 appears to have gone missing.

  • The Chicago Teachers Union spent much of 2023 becoming embroiled in scandals, including accusations that the union swept sexual abuse allegations under the rug.

  • The Boilermaker's ex-chief-of-staff, Tyler Brown, pleaded guilty to a racketeering conspiracy after he spent union members’ dues on ghost jobs for family members. Brown could receive two decades behind bars for misappropriating millions of dollars in dues.

 The days when union corruption flourished are certainly not over. As SEIU HCII members and other employees impacted here are beginning to realize, certain union officers are not altruistically taking their dues money for innocent purposes.

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Contributing editors for this issue: Greg Kittinger, Michael VanDervort, and Kimberly Ricci.


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