Activist Investors Push for Equal Parental Leave for Starbucks Store Employees

Activist Investors Push for Equal Parental Leave for Starbucks Store Employees

Starbucks has a reputation for taking good care of its store employees (or “partners” as it likes to call them), but it has nonetheless drawn some controversy this year regarding its paid parental leave program. Under a new policy announced earlier this year, new mothers who work at the coffee chain’s corporate offices are entitled to as much as 18 weeks of leave at full pay after giving birth, while fathers and adoptive parents get 12 weeks. Store employees working more than 20 hours a week and who have been with the company more than 90 days are allowed six weeks of paid medical leave upon giving birth, while those who adopt are eligible for a six-week adoption allowance, both at 100 percent of their average weekly pay.

Even though these benefits are much better than what most hourly retail and service employees in the US enjoy, the policy raised questions about why corporate employees were entitled to so much more. In August, the Guardian’s Molly Redden highlighted the impact of this disparity on store employees, noting that Starbucks is not alone among major US companies in offering more generous parental leave benefits to their corporate employees than to their front-line staff. Now, Redden reports, a group of investors led by Zevin Asset Management is pressuring Starbucks to tell its shareholders whether this discrepancy might constitute employment discrimination:

“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.

Starbucks has defended its policy, with spokeswoman Jaime Riley telling BuzzFeed’s Vanessa Wong that the new policy is “exceptional within the retail industry, not only because of the paid-time off component, but also because it’s offered to those who work just 20+ hours or more a week. … I truly believe you will not find another company that has pioneered more innovative benefits for full- and part-time employees.” Starbucks also raised wages last year for all of its store employees, along with changes to its stock awards, scheduling, dress codes, and health insurance policy, and created a Chief Partner Officer position this summer to further its investment in employees.

Still, the issue of parental leave inequality between salaried and hourly employees is increasingly in the spotlight for major US corporations. The new policy Hilton introduced last year grants two weeks for all parents and 10 weeks for new birth mothers, regardless of whether they are hourly or salaries, while Ikea introduced a new policy at the start of this year that gives all US employees who have worked at least a full year with the company three months of paid parental leave, including six weeks at full pay and another six weeks at half pay. Netflix also expanded its parental leave for hourly staff in late 2015, though its salaried employees are entitled to unlimited leave.