Workers At An Arizona Cafe Starbucks Win Union Drive

Workers at a Starbucks Corp cafe in Mesa, Arizona, on Friday won their bid to join a labor union, marking the first company-owned U.S. location outside of New York state to do so.

Employees voted 25-to-3 to join Workers United, an affiliate of the Service Employees International Union, according to a livestreamed ballot count conducted by the National Labor Relations Board.

Only three out of the company's roughly 9,000 U.S. locations have voted to join the union so far, but a stream of other stores are waiting in line behind them.

In the last six months, employees at more than 100 stores in at least 26 states have petitioned the NLRB to hold union elections in their locations - including the company's flagship Reserve Roastery stores in New York and Seattle, Starbucks' hometown.

The union is also winning legal arguments. Friday's ballot count had been rescheduled after Starbucks challenged election procedures but lost.

Two stores in Buffalo, New York joined the union and have begun negotiating contracts. Workers at a third location in the city voted down the union, and three other stores there had ballots impounded on Wednesday pending resolution of Starbucks' appeal.

The union drive does not appear to pose major financial risk to the coffee chain in terms of big wage or benefit increases, wrote Jefferies Equity Research analysts in a note after consulting with former SEIU President Andy Stern.

If Starbucks mishandles the situation it could damage its reputation as a progressive employer with higher pay and better benefits than similar restaurant chains, they wrote.

"It is hard to imagine this issue turning into a maelstrom of negative PR ... but it does surely present near-term 'headline risk' for the stock," they wrote.

Shares on Friday were near 16-month lows and had lost at least a fifth of their value since the start of the year, a steeper fall than the S&P 500 Restaurants subindex.