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Starbucks Ousts Top Lawyer Amid Union Fight, Diversity Drive (2)

April 5, 2022, 10:21 PMUpdated: April 6, 2022, 1:53 AM

Starbucks Corp. general counsel Rachel Gonzalez has been removed from her role, the company said in a regulatory filing Tuesday.

Gonzalez, who received more than $5.3 million in total compensation from the coffee chain last year, has moved to an advisory position ahead of her May 20 departure. Gonzalez didn’t respond to a request for comment.

The exit comes after the company announced last month that its chairman emeritus Howard Schultz would return as CEO on an interim basis. Starbucks, currently battling a unionization effort by its coffee shop workers, has also come under scrutiny in recent years from investors for providing anti-bias training to employees.

Starbucks is one of several large public companies that assesses its outside law firms on certain diversity guidelines. Starbucks’ inclusion efforts include diversifying its boardroom and supply chain, as well as linking executive compensation to diversity targets.

The Coca-Cola Co. recently walked back its diversity policy, in which the company threatened to withhold up to 30% of fees from law firms that didn’t hit staffing metrics. The policy would have required firms to assign diverse attorneys to work on 30% of new matters and to direct at least half of that segment to Black lawyers.

Starbucks spokesman Reggie Borges said Gonzalez’s separation is unrelated to the company’s diversity initiatives. He declined to discuss Starbucks’ diversity program when contacted last week for a story about the future of such endeavors following Coca-Cola’s policy reversal.

Jenkins Interim Legal Chief

Gonzalez, hired by Starbucks in 2018, will receive payments totaling nearly $8 million from Starbucks. The company disclosed in a securities filing that Gonzalez will be given a “cash payment in recognition of equity grants” valued at more than $4.8 million, as well as nearly $2.3 million in severance.

Starbucks has also agreed to give Gonzalez a prorated bonus of roughly $470,500 for fiscal 2022 and $20,000 that can be used for attorney fees related to the negotiation of her separation agreement, a copy of which is appended to the filing.

Starbucks will provide outplacement services to Gonzalez, who through May 20 will remain employed by the Seattle-based company as a non-executive adviser with full benefits and 50% of her base salary.

Securities filings show that Gonzalez sold off nearly $9.1 million in Starbucks stock last year. She owns company shares valued at $9 million, per Bloomberg data.

The filing disclosing Gonzalez’s pending departure is signed by interim general counsel Zabrina Jenkins, a 17-year Starbucks veteran. Jenkins, who most recently was deputy general counsel at the company, didn’t respond to a request for comment about the status of its diversity programs.

Jenkins’ profile page on Starbucks’ website states that she’s been an “executive champion to the Starbucks Black Partner Network” and an adviser to the diversity committee of its law and corporate affairs department. She told Legaltech News in 2018 that “diversity is one of the top things that is listed in our outside guidelines.”

Jenkins said at the time she expected Starbucks’ outside counsel to “take into consideration that we are a diverse company and serve a diverse community.”

(Adds comment from Starbucks in sixth paragraph.)

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com