In recent years, the food service industry has been rife with workplace health safety issues. Food service workers have been attacked, stabbed, shot, and killed by customers in the restaurants where they work. According to one study, between 2017 and 2020, at least 77,000 violent or threatening incidents took place at California fast-food restaurants. Recent data indicate that the cost of workplace violence could be as much as $56 billion annually – and that’s likely an undercount. However, workplace health and safety issues are not limited to customer violence. Workers have also been made to work under unsafe and unsanitary conditions, such as restaurants with high kitchen temperatures and restaurants infested with vermin.

These issues and the media response they elicit are clear operational and reputational risks for the companies, which can lead to difficulties with staff retention in an industry with high turnover. According to the U.S. Chamber of Commerce, the food service and hospitality industry has a consistently high “quit rate.” Understaffing at fast food restaurants can lead to longer wait times for customers, diminished employee productivity, and an increase in safety hazards. Workplace health and safety issues in fast food restaurants have led to worker strikes and protests of working conditions, as well as fines and temporary restaurant closures imposed by regulators.

Why should investors care? If left unaddressed, workplace health and safety issues can expose companies and their shareholders to unnecessary risk. In recent years, shareholders have recognized the risks posed by workplace health and safety issues and are pressing companies to take more action to address them. In 2023, Dollar General shareholders demonstrated this with a majority vote in support of a health and safety audit proposal.

To address these risks, SOC Investment Group has filed health and safety audit proposals at McDonald’s, Yum! Brands, Restaurant Brands International, and Chipotle for the 2025 proxy season. The proposals are similar to the proposal we filed last year at Chipotle, which received 30% support from shareholders, well above the average support level of 18% for social proposals in the S&P 500 in 2024. The resolution requests that the companies’ boards of directors commission an independent third-party audit on the impact of company policies and practices on the safety and well-being of workers throughout company-branded operations.

We believe any relaxation of safety standards in pursuit of short-term benefits creates risks for workers, customers, and shareholders and may result in long-term reputational damage that can be difficult to reverse. In addition to these risks, companies that neglect health and safety in the short term may face increased regulatory and business risks that can erode margins and reduce long-term shareholder returns.