Change could be brewing as company says baristas, fathers and adoptive parents have grounds for complaint over better benefits for corporate employees

This article is more than 2 years old

This article is more than 2 years old

At the annual meeting of Starbucks shareholders in March, executives were confronted by a barista who demanded more paid family leave for new moms like her.

Now, if a group of Starbucks investors has its way, the people asking that question will soon be the shareholders themselves.

On Monday, a group led by Zevin Asset Management announced it would pressure Starbucks to inform shareholders of whether its paid family leave policy – which offers less leave to retail workers than to corporate employees – might count as employment discrimination.

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“Paid family leave is a huge factor in how well women can stay involved in the workforce after having a baby, or how much time out they have to take in their careers,” said Pat Tomaino, Zevin’s associate director of socially responsible investing.

“Women and their families benefit from equal and generous paid family leave – but companies do too.”

It appears to be the first shareholder proposal calling for a company to rethink its policy on paid family leave. Nor are the investors stopping with Starbucks.

In letters sent this summer, Zevin warned nearly a dozen other major employers – among them Costco, Target, UPS, Amazon, AT&T, Apple, CVS, and Marriott – that their paid leave policies could face similar scrutiny.

Starbucks is the first target because its family leave policies are already being protested by a vocal group of baristas and store managers.

The coffee company offers employees of its corporate offices 16 weeks’ paid leave if they give birth and 12 weeks if they are new fathers or adoptive parents. Retail workers who give birth or adopt are eligible for six weeks of paid leave; dads whose partners give birth get none.

Starbucks argues its parental leave policy is one of the best in the retail industry.

But parents protesting the policy say it presents a hardship. “It is in no way fair to the average worker,” Jess Svabenik, a new mother and a barista, told the Guardian. “You can’t have corporate without us, so why would one have a better benefit than the other?”

The proposal that investors filed with the company suggested that the policy could be discriminatory. LGBTQ parents, Tomaino said, are especially disadvantaged.

Tomaino added that the unequal policy poses a “reputational liability”, because Starbucks executives have repeatedly boasted about treating corporate and retail employees equally.

At the March 2017 shareholders meeting, Howard Schultz, the outgoing chief executive, said a decision in the 1990s to offer stock options and healthcare “to everyone that worked at Starbucks, including part time people … became the foundation of the culture of the company.”

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Tomaino said Starbucks has said it is willing to discuss the proposal before it comes to a vote. A company spokeswoman would not comment on how Starbucks would respond to the proposal, but touted its benefits policy.

“We offer a more robust benefits package than any other retail company,” said Jaime Riley. “You will not find another company that has pioneered more innovative benefits for full- and part-time employees.”

Shareholder resolutions are becoming more popular as a way to press for gender equality. They typically originate with smaller investors and rarely pass, because they do not receive the necessary support from major shareholders.

The proposals do not have to pass, however, to make an impact. In 2016, the investment firm Arjuna Capital used similar measures to pressure Amazon, Apple, Expedia, Intel, and Microsoft to disclose whether they paid men and women equitably. Before the proposals could come to a vote, all five companies said they had closed their gender pay gaps or would take the necessary steps.

Arjuna Capital is one of several cosigners to the proposal now before Starbucks.

“Starbucks will have to defend its policy of treating people in retail outlets differently than people at its headquarters, even if this has very little chance of passing,” said Peter Henning, a professor at Wayne State University law school.