The New York City Retirement Systems (NYCRS) submitted shareholder proposals at seven companies to safeguard workers’ freedom of association and collective bargaining rights, which are defined as fundamental human rights under internationally recognized human rights standards.
The proposals submitted to Chipotle, DoorDash and Netflix ask their boards to adopt and disclose a policy on their commitment to freedom of association, particularly with respect to noninterference, and collective bargaining, as reflected in the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. At Chipotle, the proposal also asks that the policy include a commitment that “where national or local law is silent or differs from international human rights standards, Chipotle will follow the higher standards.”
In contrast, to address risks created by the apparent misalignment of each company’s practices with its human rights commitments, the proposals at Apple, CVS Health, Starbucks and Walmart ask each company’s board to commission and oversee an independent, third-party assessment of the company’s adherence to its stated commitment to workers’ freedom of association and collective bargaining rights. NYCRS withdrew the proposal at Apple after the company committed to conduct a third-party worker rights assessment.
Freedom of association is not only the right to form or join a union – as some companies and investors may believe – it is the right to do so without management interference, according to the ILO Core Conventions. In “A Guide for Business,” issued jointly with the United Nations Global Compact, the ILO states that “employers should not interfere in workers’ decision to associate, try to influence their decision in any way, or discriminate against either those workers who choose to associate or those who act as their representatives.”
In the United States, freedom of association and collective bargaining rights are protected by federal laws and by internationally recognized human rights standards that many companies voluntarily commit to respect. For many companies, simply complying with the law is necessary but insufficient.
As the United States Council for International Business has conceded, U.S. law falls short of international standards:
“U.S. law and practice conflict with many of the requirements of the ILO standards, preventing U.S. ratification of some of the core labor standards…. U.S. ratification of Conventions 87 and 98 would require particularly extensive revisions of longstanding principles of U.S. labor law to conform to their standards…. U.S. ratification of the convention would prohibit all acts of employer and union interference in organizing…”
Importantly, while implicit in a company’s commitment to respect international standards, some companies expressly commit to respect international standards where they exceed national law, consistent with the expectations of the UN Guiding Principles on Business and Human Rights. In 2022, Microsoft affirmed its longstanding commitment to freedom of association by adopting a company-wide noninterference policy. In 2023, workers at a Microsoft-owned gaming studio voted to unionize, establishing the company’s first union in the U.S. Microsoft responded by recognizing the union and expressing its commitment to engage in good faith negotiations, steps that Starbucks has been reluctant to take.
Michael Garland
Assistant Comptroller, Corporate Governance and Responsible Investment Office of New York City Comptroller