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European companies respond to AFL-CIO report alleging use of anti-union tactics in American South

The AFL-CIO report "The Double Standard at Work: European Corporate Investment and Workers' Rights in the American South", published in October 2019 examines European companies’ choices on workers’ organizing rights in Southern states of the United States, in a context of growing foreign direct investment over the past 25 years. 

In particular, the report includes case studies on companies alleging they apply anti-union strategies and tactics despite having publicly committed themselves to international human rights and labour standards, including organizing and collective bargaining rights.

Business & Human Rights Resource Centre invited the companies named in the report to respond. Airbus, Fresenius, IKEA, LSG Sky Chefs, Nestlé, Skanska and Outokumpu responded, their responses are available below. Schnellecke, Thyssenkrupp and Volkswagen did not respond.

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30 October 2019

The Double Standard at Work: European Corporate Investment and Workers' Rights in the American South

Author: AFL-CIO

20 October 2019

Multinational corporations based in Europe have accelerated their foreign direct investment in the Southern states of the United States in the past quarter-century...

This report examines European companies’ choices on workers’ organizing rights with documented case studies in several American Southern states. In their home countries, European companies investing in the American South generally respect workers’ organizing and bargaining rights... But they do not always live up to these global standards in their Southern U.S. operations.

In the United States [...] labor law gives management a free hand to launch aggressive anti-union campaigns when workers try to form unions...

Flaws in U.S. labor law and practice are even more acute in the American South than in other regions...

European companies’ campaigns against workers’ freedom of association in the Southern United States have wider implications and effects beyond whether employees succeed in forming trade unions. When they apply harsh anti-union strategies and tactics, European firms often argue that they simply are following advice from local business leaders and elected officials to adapt to the corporate customs and culture of the American South...

European firms’ respecting workers’ freedom of association could be a driving force for far-reaching change in the American South...

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Company response
29 October 2019

Response by Airbus

Author: Airbus spokesperson

“Airbus has the same high standards for processes, quality and employee well-being regardless of our manufacturing location. We selected Mobile for our U.S. assembly line because it had an existing aviation infrastructure in the under-utilized Brookley Aeroplex, as well as an adjacent deep water port and an existing Airbus presence with our Engineering and Military Support centers. The Airbus workforce in Alabama is a team of highly skilled aerospace professionals who are proud to be part of the global Airbus team,” Airbus spokesperson.

Company response
29 October 2019

Response by Fresenius Medical Care

Author: Fresenius Medial Care

...First and foremost, we respect our employees’ right to freedom of association and collective bargaining, consistent with applicable law and practice. We are evaluating the recent article written by Mr. Compa. That said, we believe that the picture it draws does not properly reflect the Company and its operations in the United States. 

Trust and cooperation between management, employees and employee representatives is a lived practice at Fresenius that is, and will remain, an integral part of our corporate culture. Our employees can freely decide to join or not join labor unions and, if applicable, engage in collective bargaining in accordance with the local law and practice.

We are committed to an open and continuous dialogue with our employees, as well as with our employees’ representatives and unions.

Employees can use various existing channels for reporting any concerns they may have. We take any reports of non-compliance with laws, regulations and internal policies seriously and follow them up and make sure that allegations and concerns are properly investigated and addressed.

We are fully committed to complying with applicable law in all locations where we operate...

[full response attached]

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29 October 2019

Response by IKEA

Author: IKEA

It is always our intent to act in a manner consistent with the international human rights standards. We respect and welcome the free choice of our co-workers to seek representation through any kind of co-worker association. We firmly believe that the freedom of choice exclusively belongs to each of our co-workers, and we will not take side or express preference to any association. The right to join or not join a union remains squarely with the worker, not IKEA nor the union.

Ingka Group complies strictly with all regulations relating to union organizing activities everywhere we operate. When our co-workers do choose to be represented by a co-worker association, we are open to having a constructive and cooperative dialogue with their representatives and to engage in collective bargaining in good faith. 

IKEA Retail U.S. has trade union representation in five of its Distribution centers in different sections of the country. All these represented co-workers bargain collectively...

IKEA Retail U.S. has never instructed their leaders and managers to engage in anti-union behavior and continues to invest in protecting co-workers’ freedom of association and their right to make an informed decision to join or not to join a union. IKEA Retail U.S. does not condone the dissemination of false or derogatory statements against unions, IKEA Retail U.S or its co-workers...

While we do not recognize IKEA policy and practice in working with Social partners described in the AFL-CIO report, we remain open to continued dialogue, including investigating and taking action if needed on any further substantiated allegations referred to in the report.

[full response attached]

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Company response
29 October 2019

Response by LSG Sky Chefs

Author: LSG Sky Chefs

A recent AFL-CIO study examined alleged anti-union tactics by European companies in American Southern states. The premise of the study focuses primarily on analyzing “…the historical and cultural sources of deeply-rooted hostility in these states toward workers’ attempts to form and join trade unions and to bargain collectively with their employers.” The study refers to UNITE HERE (“UH”), the labor union which represents LSG Sky Chefs (“Company”) employees in various locations throughout the Company’s North America region. Further referenced, “right to work laws” do not apply to the Company’s employees due to the Railway Labor Act which governs our labor relations. 

As a company whose history spans over 70 years, LSG Sky Chefs has remained a viable employer throughout the U.S. region, currently employing over 12,000 employees in the U.S. In an effort to preserve objectivity, it is critical to point out that “right to work laws” have no bearing on the Company’s strategic decisions. To the contrary, the Company’s basis of facility locations throughout the country has been solely based on the needs of its customers. 

The Company respectfully and strongly disagrees with the study’s argument that European companies seek to locate in the South to avoid unions. Such a position simply does not apply to LSG Sky Chefs; the Company has, and continues to fully support workers’ rights and freedom of association. In fact, LSG Sky Chefs continues to invest in wages and benefits. Since 2014 employee wages have increased by 26%. Differences in wages at various locations are specific to the local labor market, as well as the wide variation in the cost of living in the cities where we have facilities. All wages and benefits are the result of collective bargaining between our company and UNITE HERE and in-compliance with various state-specific wage laws.

The Company is currently engaged in good-faith bargaining for a new national agreement. It remains hopeful negotiations will lead to an agreement with UH to offer increases in wages and benefits for employees.

Regarding the sale of LSG Sky Chefs, the collective bargaining agreement contains a successorship clause. Any new owner must honor UH as the recognized representative for all Company employees in North America and honor the terms and conditions of the collective bargaining agreement.

LSG Sky Chefs has improved wages and other benefits over the years and continues to do so with the understanding that the company must remain viable in a highly competitive industry with historically low profit margins.

Company response
29 October 2019

Response by Nestlé

Author: Nestlé

We are disappointed by the portrayal of how we value our employees and union relationships in the report “The Double Standard At Work: European Corporate Investment and Workers’ Rights In the American South.” The report compiled for the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) contains numerous false allegations and misrepresentations about Nestlé and a 2017 union campaign at one of our facilities located in McDonough, Georgia, USA. At all times, we have operated in line with both U.S. law and our own global policies. We have always supported dialogue among the relevant parties. 

Nestlé’s values are deeply rooted in respect. This includes respect for our employees, their right to freedom of association and the effective recognition of their right to collective bargaining. This is clearly supported by our Corporate Business Principles (“Human rights in our business activities”) and our Employee Relations Policy. Nestlé ensures that throughout any union organizing campaign, its representatives fully support these policies, as well as comply with local laws. In the United States specifically, Nestlé has a long tradition of maintaining positive labor relations, with over 30 collective bargaining agreements in place. These agreements have been successfully negotiated in good faith with a variety of unions, and with no labor strikes in over fifteen years. 

The report correctly states that Nestlé offers a safe, rewarding workplace that inspires employees to fulfill their potential, and we strive to provide people with equal development opportunities and treat each other with dignity and respect. As a global employer of over 300,000 individuals, we are committed to upholding our Corporate Business Principles and our Employee Relations Policy in everything we do. We will continue to operate an environment where employees are empowered to help shape a better world and inspire people to live healthier lives.

[full response attached]

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Company response
29 October 2019

Response by Skanska

Author: Skanska

Thank you for this opportunity to respond to the AFL-CIO report pertaining to workers rights in the American South. Generally, the AFL-CIO report is advocating for unionization of labor in the southern US. The current status of labor unionization in that region is largely driven by socioeconomic, political and legislative influences that are far broader than the construction industry, and certainly far broader than anything Skanska has the ability to meaningfully influence due to the competitive forces in the marketplace. As part of its advocacy, the AFL-CIO generally contends that alleged wage theft and other mistreatment of labor in the construction industry could be avoided through unionization. Skanska believes it has been identified in the report largely, if not exclusively, because of an alleged incident of nonpayment of wages to certain drywall laborers on a hotel project in Nashville, Tennessee. 

This incident was isolated and attributable to the conduct of Skanska’s lower tier subcontractors. Contrary to the suggestion in the AFL-CIO report, on this privately-funded project Skanska had no influence or control over the wage rates paid by its subcontractors or the actual payment of wages. When Skanska became aware of the nonpayment allegations, Skanska acted appropriately and in a manner consistent with both applicable law and its contractual obligations. The Tennessee state lawsuit identified in the report resulted from liens filed by some of the alleged unpaid laborers. Skanska was able to properly utilize amounts withheld from responsible subcontractors to discharge the liens and pay the amounts to the account of the laborers that participated in the lawsuit. The fact that Skanska is not named in the federal lawsuit filed by the alleged unpaid laborers reinforces that Skanska did not participate in any alleged wage-related wrongdoing.

Skanska takes exception to AFL-CIO’s suggestion that Skanska improperly uses anti-union subcontractors, tolerates violations of labor standards by its subcontractors and otherwise has an anti-union bias. In Tennessee, Skanska solicits competitive bids from multiple trade subcontractors, both union and nonunion. Skanska routinely awards contracts to union trade subcontractors, especially when the union trade subcontractor is the lowest responsible bidder.

[full response attached]

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Company non-response
29 October 2019

Schnellecke non-response

Author: Schnellecke

Schnellecke declined to respond.

Company non-response
29 October 2019

thyssenkrupp non-response

Author: thyssenkrupp

thyssenkrupp declined to respond.

Company response
28 October 2019

Response by Outokumpu

Author: Outokumpu

Outokumpu maintains a consistent policy of freedom of association for all its employees. In accordance with local rules and regulations, Outokumpu employees have the right to organize themselves, join associations and bargain with the company collectively. 

In the United States, the National Labor Relations Act, governs the process that both unions and employers must follow with respect to union organizing; including the right to participate in secret ballot elections. 

Regarding the anti-union allegations raised by the Business and Human Rights Resource Centre, Outokumpu denies that it has acted in bad faith or violated the law or negatively affected the rights of any of its employees. 

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