SBUX Starbucks Corporation

By Jennifer Smith 

Unionized workers at a supplier to hundreds of Starbucks Corp. coffee shops in Chicago and other Midwestern cities rejected a proposed contract agreement and voted to authorize a strike, the Teamsters said Friday.

The proposed labor agreement between DPI Specialty Foods Inc.'s logistics division and Teamsters Local 710 covers nearly 300 drivers and warehouse workers at four DPI facilities in the Chicago, Indianapolis, Minneapolis and St. Louis areas. Those locations supply food and other goods to more than 900 Starbucks stores, the Teamsters said.

The previous contract with DPI Dedicated Logistics expired earlier this year, the Teamsters said. The union had been negotiating for a five-year agreement but DPI said this month it could only offer a seven-month contract for workers in Chicago, Minneapolis and St. Louis, and a one-year agreement for those in Indianapolis.

The Teamsters said members voted late Thursday to authorize a strike, but that no action has been scheduled and members were told to continue working. "We are keeping all options open to us at this time," a Local 710 spokeswoman said.

"It's pretty clear to us that since DPI's only customer in the area is Starbucks, in the near future Starbucks is planning to move the work away from DPI and to a different company," Mike Cales, secretary-treasurer of Local 710, said in a statement. "We think that's why DPI is asking workers to agree to a short-term contract of only seven months, instead of the usual five-year contract. This extremely short contract is one of the reasons why our members voted it down."

DPI said in a statement that the company has been working with the Teamsters and Starbucks "for many months to find a solution that is realistic and that benefits everyone. ... Our imperative above all else is to always deliver the highest level of service to our Starbucks partner while also doing right by the people in our organization who participate in the receiving, picking, loading and delivering [of] that service."

A Starbucks spokesman said the company is not renewing its contracts with DPI because the provider lacks the capacity and infrastructure to support Starbucks's planned growth in the region.

The company will be working with other providers and "we expect that workforce is going to include organized labor," spokesman Reggie Borges said.

Headquartered in Ontario, Calif., DPI provides sales and services to retailers, independent operators and food-service companies through eight U.S. distribution centers, according to its website.

The company has since 2015 been owned by Arbor Investments, a private-equity firm that focuses on the food and beverage industry.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

August 23, 2019 17:09 ET (21:09 GMT)

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