Labor Rights

With the wave of unionization efforts that have swept across the United States in recent years, there has been a corresponding uptick in allegations of labor rights violations. The frequency and severity of these allegations, often found to have merit by the National Labor Relations Board, have sparked investor concern, leading to a number of shareholder proposals filed in the 2023 proxy season. Two different types of labor rights proposals have been filed, depending on the company’s current labor rights commitments. If the company has not committed to the ILO Conventions, the proposal requests a commitment to international labor rights standards. If the company has already committed to these international standards, the proposal requests a third-party assessment of alignment with public commitments towards international labor standards.

Labor rights related to union organizing and membership have been identified as fundamental human rights by international standards. Freedom of association and collective bargaining rights are outlined in the International Labor Organization (ILO) Core Conventions. Under these ILO Conventions, employers and their agents should not prevent, prohibit, or interfere with – directly or indirectly – the exercise of workers’ rights to organize and join a union in order to bargain collectively over terms of employment and workplace conditions. Further, the United Nations Guiding Principles on Business & Human Rights (UNGPs) state unambiguously, that even when national laws may fall short of the international human rights standards, such as those set by the ILO Core Conventions, companies should respect the higher standards. This is the global standard that “extends beyond compliance with national law.” 

 Together, the ILO Core Conventions are considered the minimum “enabling rights” in the workplace serving as a precondition for the attainment of other rights related to the improvement of work conditions. The term “enabling rights” means that respecting these rights can help ensure respect for other human rights such as gender equality, health and safety, adequate wages and reasonable working hours.

Intrinsic to the right of freedom of association is the principle of non-interference. Workers must be free to establish and/or join a union of their choosing and have the right to carry out actions to that effect without interference from or anti-union discrimination by their employer or its agents. The ILO Committee on Freedom of Association states unequivocally “all appropriate measures should be taken to guarantee that, irrespective of trade union affiliation, trade union rights can be exercised in normal conditions with respect for basic human rights and in a climate free of violence, pressure, fear and threats of any kind.” The Committee considers “the active participation by an employer in a way that interferes in any way with an employee exercising his or her free choice would be a violation of freedom of association and disrespect for workers’ fundamental right to organize.”

The right to collective bargaining is the right of employees in a workplace to come together and form or choose a representative who will then negotiate with their employer over terms and conditions of employment. Collective bargaining is best understood as a form of self-government in the workplace, with employers seeking to make changes to pay, benefits, or other workplace terms and conditions needing to obtain the “consent of the governed” via bargaining with the employees designated representative. Because the individual worker typically lacks meaningful bargaining power to negotiate favorable employment terms, designating a representative to negotiate on behalf of a large group of workers can level the playing field between labor and management and give workers a meaningful seat at the bargaining table. It is worth noting that employers themselves frequently utilize third-party agents, sometimes called union avoidance consultants, to assist them in developing messaging and materials, as well as conducting both group and individual discussions with employees, to dissuade them from choosing to form or join a union and bargain collectively.