Around a quarter of votes cast at Delta Airline’s AGM were in favor of a proposal supporting unionization rights at the company. The resolution is among a number filed at US companies to focus on labor rights amid an uptick in efforts of US employees to organize.
The proposal was backed by 26 percent of the votes cast, down from 33 percent at last year’s AGM and not a majority but still a level of support widely seen as significant by governance experts.
The resolution, filed by As You Sow, asks that Delta’s board ‘adopt and disclose a non-interference policy… upholding the rights to freedom of association and collective bargaining in its operations, as reflected in the International Labour Organization’s [ILO] Declaration on Fundamental Principles and Rights at Work.’
As You Sow writes that the policy should include a commitment to:
- ‘Non-interference when employees seek to form or join a trade union, and a prohibition against acting to undermine this right or pressure employees not to form or join a trade union
- ‘Good faith and timely collective bargaining if employees form or join a trade union
- ‘Uphold the highest standard where national or local law differs from international human rights standards
- ‘Define processes to identify, prevent, account for and remedy practices that violate or are inconsistent with the policy.’
In a supporting statement, the shareholder advocacy group writes that peer airlines have pledged to respect labor rights as laid out by the ILO and that as a global company Delta should adhere to the highest international standards. ‘Delta’s communications to its employees around unions have not historically met a non-interference or neutrality standard… If Delta’s brand is linked to anti-union rhetoric, it risks losing customers,’ As You Sow states.
The group argues that freedom of association and collective bargaining can enhance shareholder value by improving health and safety, raising productivity, encouraging employee training and improving human rights due diligence. ‘The presence of unions has been positively correlated with low turnover and reduced legal and regulatory violations,’ it adds.
Vote ‘no’ arguments
Delta’s board had recommended that shareholders vote against the proposal, writing in this year’s proxy statement that the company’s ‘culture is firmly rooted in recognizing and rewarding the value of Delta’s greatest competitive advantage – its people.’
The board wrote that ‘Delta firmly believes every employee has the right to choose or reject union representation without interference… [The company] has always respected its employees’ choice, encouraged honest, transparent and respectful dialogue among its people, and has not suggested stifling any group or point of view. Over the past two decades, following lawful, permitted education from both unions and Delta directly, Delta’s US-based employees have repeatedly chosen to reject union representation.’
The company argued that As You Sow was asking it to adopt a policy based on international standards that are not applicable to 97 percent of its employees. ‘Delta has policies that support its employees’ right to advocate for or against union representation,’ the board wrote. ‘Solicitation and advocacy activities by Delta people on [company] premises are permitted under clearly defined parameters… Adoption of the proposed policy would extend beyond non-interference and could be detrimental to Delta’s relationship with its employees.’
A request for comment from Delta was not returned immediately.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
