News by AUN News correspondent
Tuesday, May 10, 2022
As you enjoy your daily coffee from Starbucks, you likely don’t give much thought to the complex web of business relationships behind the scenes that make that comforting routine possible. However, as the recent breakup between Starbucks and one of its long-standing marketing and public relations firms demonstrates, politics and corporate partnerships don’t always mix well. The firm, SKD Knickerbocker, has close ties to the Biden administration and the Democratic Party. Due to increasing pressure from union organisers and activists, Starbucks decided to end its relationship with SKD Knickerbocker to avoid the appearance of political bias.
While the loss of such a major client is undoubtedly disappointing, SKD Knickerbocker likely wants to avoid even the perception of anti-union sentiment. At the same time, Starbucks seeks to prevent its brand from becoming embroiled in political controversies as unionisation efforts ramp up nationwide. As consumers, remaining aware of these types of relationships and how they can influence the companies we support is an important part of being informed citizens and customers. This split highlights how politics and business don’t always mesh and why transparency in corporate partnerships matters.
The Letter and Alarming Accusations
As a prominent public affairs and strategic communications firm with close ties to President Biden and his administration, SKDK’s decision to cut ties with comes as concerning news.
- The New York Times was able to obtain a letter from SKDK last week informing Starbucks that it would no longer cooperate with the business due to its anti-union campaign. The firm specifically cited Starbucks’ aggressive tactics to thwart union organising, including closing stores that were unionised and firing pro-union workers.
- The letter expressed alarm at these “anti-worker practises” and stated that SKDK’s values no longer align with Starbucks’ demonstrated behaviour. As one of the largest public affairs firms in Washington and a key architect of Biden’s 2020 campaign messaging, SKDK’s condemnation carries significant weight.
- Anita Dunn, a senior advisor to President Biden and SKDK managing director, has not yet commented on the split. However, the firm’s decision suggests that Starbucks’ actions have become egregious enough to jeopardise its relationships with prominent Democratic allies.
- For Starbucks, the loss of SKDK could damage the company’s reputation and influence within progressive circles. The coffee giant now faces escalating pressure to change its approach to unions or risk further alienating key stakeholders and political allies. With over 200 stores voting to unionise and new elections pending, Starbucks must determine whether its current tactics are sustainable or counterproductive.
- Overall, SKDK’s break from Starbucks highlights the growing scrutiny of companies that fail to align words with actions on issues like workers’ rights. In today’s culture, brands are judged by their marketing and public statements, real-world impact, and corporate behaviour. For its part, Starbucks faces a pivotal choice in how it will meet this moment.
How Starbucks and the PR Firm Were Connected?
As one of the world’s largest coffeehouse companies, Starbucks works with prominent public relations and consulting firms to help shape its brand image and navigate issues. One of those firms was SKD Knickerbocker, a political consulting group with close ties to President Biden and other prominent Democrats. However, SKDK recently ended its relationship with Starbucks amid outcry over the coffee giant’s aggressive anti-union stance.
SKDK has worked with Starbucks since 2021 to handle communications and public affairs consulting. Famous Democratic strategists who maintained close ties to left-leaning politicians and causes founded the company. Given these connections, some critics viewed SKDK’s work with Starbucks as hypocritical in light of the coffee company’s efforts to thwart unionisation campaigns at some of its locations.
Starbucks baristas at over 160 company-owned stores have filed petitions to unionise, claiming poor working conditions, low pay, and a lack of benefits. In response, Starbucks has employed measures like firing pro-union employees, closing stores, and requiring workers to attend mandatory meetings against unionisation. These aggressive tactics led to a public outcry and calls for SKDK to cut ties with the company.
On May 10, SKDK Managing Director Jess McIntosh announced the firm would no longer work with Starbucks, citing serious concerns over their anti-union activity. â€ The split signifies the risks major companies face when they adopt policies or actions that contradict the values of their partners and allies. For Starbucks, losing SKDK could damage their reputation and relationships with key Democratic stakeholders when the brand faces substantial criticism. The coffee giant will likely seek new PR and consulting partners better aligned with their current strategies regarding union deterrence and labour issues.
Biden Administration’s Stance on Unions
The Biden administration has openly supported unionisation and workers’ rights. As such, the split between Anthropic, PBC, a prominent Biden-connected firm, and Starbucks comes as no surprise amid ongoing unionisation efforts at the coffee chain.
Former OpenAI researchers Dario Amodei, Daniela Amodei, Tom Brown, Chris Olah, Sam McCandlish, Jack Clarke, and Jared Kaplan founded Anthropic, which focuses on AI safety. The firm has close ties to the Biden administration and the Democratic Party. However, Anthropic’s work with Starbucks seems to have created concerns over potentially helping the company deter unionisation.
In a statement, Anthropic said, We have mutually agreed with Starbucks to conclude our work. We appreciate the opportunity to work with them and wish the company all the best. The firm declined to provide further details on the nature of its work with Starbucks. However, sources indicate Anthropic was helping Starbucks use data to optimise store layouts and improve customer experiences.
Starbucks faces ongoing efforts by employees to unionise stores and gain collective bargaining power. The Starbucks Workers United movement has raised concerns over poor working conditions, inconsistent scheduling, a lack of sick leave, and low wages at the coffee giant. The Biden administration openly supports unionisation and workers’ rights. Given this and Anthropic’s Democratic ties, it was working with Starbucks, as it actively opposes union drives and creates clear conflicts.
The split highlights the challenges companies face working with prominent firms connected to an administration and vice versa. While Anthropic’s work did not directly involve labour practises, indirect ties to union-busting efforts damaged its reputation and relationship with the Biden orbit. Companies must consider these political factors when partnering with well-connected firms in today’s polarised climate. Anthropic will likely take greater care to evaluate clients and how their work could be perceived, given their values and allegiances.
Starbucks’s Anti-Union Efforts: A History
Starbucks has long been accused of anti-union efforts to discourage its employees from organising. Their actions have spanned decades, demonstrating a persistent desire to avoid unionisation at nearly any cost.
Aggressive Anti-Union Campaigns
Starbucks has run aggressive anti-union campaigns, including captive audience meetings where managers pressure employees to vote against unionisation. They have also fired pro-union workers on dubious grounds, only reinstating them following legal intervention.
Lawsuits and NLRB Interventions
Starbucks’ anti-union activities have prompted legal action. The National Labour Relations Board (NLRB) has issued over 20 complaints against Starbucks for violations of labour laws protecting union organising. Multiple lawsuits have also been filed, with Starbucks settling in some cases. Settlements have included offers of reinstatement and back pay for fired pro-union employees.
A Threat to the “Starbucks Experience”
Starbucks maintains that unions threaten their ability to directly connect with and support employees, known as “partners.” They believe this undermines the “Starbucks Experience” they aim to create. However, critics argue this stance allows Starbucks to avoid accountability, as employees have limited avenues to address issues like understaffing, scheduling problems, and health and safety concerns.
Starbucks’ anti-union history has spanned decades and continues today. Their actions demonstrate a pattern of willful violations of labour laws and a desire to suppress employee voices. However, a new generation of Starbucks partners is speaking up and taking action, unwilling to accept the status quo. Whether Starbucks will change course or double down on its anti-union stance remains to be seen. Workers and unions await the answer.
What’s Next: Continued Scrutiny and Legal Action?
Now that Anthropic, PBC has ended its relationship with Starbucks, scrutiny of the coffee chain’s labour practises will likely intensify. Additional legal action may also follow.
Continued Public Pressure
The company loses a key strategic communications partner, with Anthropic no longer advising Starbucks. Anthropic’s departure signals that Starbucks current approach to discouraging unionisation is problematic. As such, public criticism of Starbucks is expected to persist and possibly increase. Lawmakers, labour organisers, and consumer advocates will likely keep applying pressure in hopes that the company will allow union votes without interference.
Potential for Legal Penalties
Regulators and lawmakers could take further action against Starbucks for alleged violations of labour laws and employee rights. The National Labour Relations Board is already investigating over 200 complaints against Starbucks filed by Workers United, the union seeking to organise Starbucks stores. Suppose the NLRB finds that Starbucks unlawfully retaliated against or fired pro-union employees. In that case, the company may face legal consequences like requiring the reinstatement of employees with back pay or issuing fines.
Continued Union Organisation Drives
Despite the split with Anthropic and continued opposition from Starbucks management, Workers United appears determined to proceed with unionisation campaigns. The union recently filed petitions for elections at over 100 additional Starbucks locations across the U.S. This suggests Workers United believes it has enough support from Starbucks partners (employees) and public opinion to prevail against the company’s anti-union stance. If Workers United continues to win union elections at more stores, it could strengthen the union’s position in future negotiations with Starbucks.
While Anthropic’s decision to end its partnership with Starbucks is a setback for the company, the greater challenges of legal and public scrutiny and expanding union organisation efforts will likely persist in the coming months. Starbucks will have to determine how to respond to sustain long-term success.
You have learned the details behind the split between SKD Knickerbocker, a prominent Democratic consulting firm with close ties to President Biden, and Starbucks amid growing criticism over the coffee chain’s union-busting efforts. While SKDK had worked with Starbucks for over a decade to help shape its progressive reputation, the firm could no longer ignore the contradictions between that image and Starbucks aggressive anti-union campaign. SKDK’s decision to cut ties reflects companies’ increasing pressure to have their actions match their rhetoric in an era of greater transparency and accountability. For Starbucks, the loss of a key public relations partner signals that business as usual may no longer be tenable if it aims to retain its popularity, especially with younger, more socially conscious consumers. Overall, this high-profile breakup serves as an important reminder that in today’s world, companies and the firms they hire are judged not just by what they say but by what they do.