Opinion

Starbucks Is Stuck With Howard Schultz’s Legacy

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Posted: Feb 23, 2019 12:00 PM
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Starbucks Is Stuck With Howard Schultz’s Legacy

Source: AP Photo/Ted S. Warren

Now that Howard Schultz supposedly has disengaged himself from Starbucks and is considering a run for the presidency in 2020, the company fears his political pursuits will hurt their bottom line.

Well too bad.

After decades of liberal activism and supporting Democratic candidates like Hillary Clinton, Schultz now says he may run as an independent. Some Democratic Party loyalists have gone ballistic, hurling invectives at Schultz and claiming that he will ensure the re-election of the president by splitting the anti-Trump vote.

Moreover, they are threatening boycotts. Leftist filmmaker Michael Moore urged everyone to avoid Starbucks until Schultz “announces he’s not running.”

And raising the stakes, Democratic Super PAC American Bridge 21st Century – backed by billionaire George Soros – recently targeted Starbucks, casting doubts on Schultz’s leadership. Among the charges: The company paid $46 million in settlements to employees over wage and compensation grievances. “[American Bridge] is clearly trying to convince voters that under his leadership, Starbucks took advantage of employees,” CNBC reported.

The fear of the potential economic fallout at the Seattle headquarters has been palpable – so much that Starbucks dispatched a prominent Democratic PR firm SKDKnickerbocker to try and persuade their comrades not to harm their beloved company.

Reportedly, the firm has been “reaching out to Democratic operatives in the last week expressing fear that the animus directed at Schultz over his proposed independent presidential bid was having a spillover effect on the coffee conglomerate he used to lead.”

“Trying to punish Schultz through Starbucks is unfair when this company has done a huge amount of good and social impact,” said an anonymous SKDK official to the Daily Beast. “When you conflate the two you are making an assumption that the company is involved in politics when they’re not.”

The problem with that premise is that it is totally untrue.

Starbucks’s outward political involvement has included the advocacy for greater EPA regulations to address global warming; pressuring President Obama to dedicate taxpayer dollars to a Global Climate Fundlecturing North Carolina on its “transgender bathroom” lawcriticizing President Trump’s efforts to protect the nation from unfettered immigration(the “Muslim ban”) with plans to hire thousands of refugees; launching a “Race Together” discussion initiative in its stores following the 2014 police shooting of Michael Brown in Ferguson, Missouri; asking customers not to bring firearms into its restaurants following the school shootings in Newtown, Conn.; openly applauding the 2015 Supreme Court ruling that recognized homosexual marriage; and forcing employees to undergo “anti-bias” training following an incident in one of its Philadelphia stores.

The politicization of the company went so far that Schultz famously told a shareholder in 2013 that if he did not like the company’s stance on gay marriage, that he should sell his stock.

Over the years Starbucks has boasted powerful corporate leaders on its Board of Directors. As Schultz seemingly dove into every controversy – at the risk of dividing or turning off its customer base – none of the board members apparently ever tried to rein him in. Starbucks always has been fully, unrelentingly liberal in its identity and its actions.

The attempted distinction between Starbucks’ issue advocacy and Schultz’s personal political ambitions is a false one. The two are inseparable. While many may agree with Schultz’s liberal positions, it cannot be denied that they were part and parcel of a cult of personality that dominated Starbucks. Schultz’s own political beliefs became Starbucks’. His views were forced on hundreds of thousands of shareholders and employees. This was terrible corporate governance.

As long as Starbucks management clings to Schultz’s brand of “progressive” politics, but without Schultz’s commanding presence, it is going to need a lot of paid flacks.   

The aggrieved parties here are not Democratic hopefuls or Starbucks, but the millions of investors, baristas and customers who become a party to political and social causes with which they disagree. Of course, coffee drinkers can go elsewhere. (I haven’t spent any money in Starbucks in years.) But for those who depend on Starbucks for a job, or who own the stock though a mutual fund, it is not so simple.

Don’t hold Starbucks accountable for its politics? That’s like Schultz asking people not to call him a billionaire. You are what you are.

Peter Flaherty is Chairman of the National Legal and Policy Center.