Rathbone Greenbank Investments

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Rathbone Greenbank Investments engages on US labour law

14 Oct 2009

Rathbone Greenbank Investments has been involved in promoting the protection of employees’ rights at work for many years, most notably in our support for shareholder resolutions at the transport company, FirstGroup in 2006. Throughout 2009 we have been engaging with companies with significant US operations regarding their employment policies, with specific regard to their approach to unionisation.
Whilst the freedom of association is an established right in the US, the system for gaining approval to form a union is currently complex and open to manipulation. The campaign group Human Rights Watch has noted that in the US “Legal obstacles tilt the playing field so steeply against workers’ freedom of association that the United States is in violation of international human rights standards for workers.”
Following the election of Barck Obama, there was renewed hope that legislation seeking to address this situation would be enacted, in the form of the Employee Free Choice Act (EFCA). The EFCA essentially creates a new legally recognised method of forming a union in the US, seeking to avoid situations where employers hire so called ‘union-busting’ consultants, affecting supposedly secret elections.
The legislation is proving controversial, and we wrote to companies with a significant exposure to the US in the first half of the year asking for clarification on their stance on the EFCA, and the extent to which their existing policies supported freedom of association. We received encouraging replies from a number of companies, and have remained in productive dialogue. In the second half of the year, we have been pleased to work with a broad coalition of investors also seeking to engage with companies on the EFCA. This group has communicated with a large number of UK companies with US operations, many of which it has met in person to discuss the issues.
The passage of the EFCA has been somewhat hindered by the focus on efforts to deliver healthcare reform in the US, but we will continue to push companies to adopt best practice as regards respecting workers’ human rights, and ensure that companies in which we are invested are demonstrating an awareness of such emerging ethical issues.

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