National Express Shareholders Call for Review of Workplace Rights

News of a shareholder resolution filed at National Express calling for a review of workplace rights in its US school bus business Durham. This is the second shareholder resolution backed by unions at a UK PLC this AGM. I don't think there have been two in a single season before.

https://teamster.org/news/2016/03/teamsters-national-express-shareholders-call-review-workplace-rights 

Teamsters: National Express Shareholders Call for Review of Workplace Rights

(WASHINGTON) –Today, National Express [LSE: NEX.L] investors are urging the company’s board to back a resolution seeking an independent review of employment practices in its U.S. school bus wholly-owned subsidiary, Durham School Services. Announcement of the resolution comes on the same day National Express is shortlisted at this year’s Business Finance Awards.

The investors – including public sector union UNISON’s staff pension scheme, the SEIU Master Trust, the Teamsters Union and individual shareholders – have filed a shareholder resolution to address longstanding issues concerning Durham School Services’ treatment of employees. Since 2001, the U.S. National Labor Relations Board has found merit in more than 65 complaints against the company.

The resolution, drafted by the pension funds, calls on National Express to undertake an independent review of the allegations made about its U.S. bus business. For several years, school bus employees have raised concerns to the board and shareholders that local managers are making it hard for employees to join a union. 

This year’s resolution to the National Express AGM requests that the company obtain an independent assessment of these longstanding investor concerns through the appointment of a suitable person to review the situation. This person would report their findings to the company, unions and shareowners by the end of Q3 2016. 

In 2015, the resolution received support from approximately 25 percent of National Express’ non-insider shareholders. This represents the largest ever vote for a labour rights themed resolution at a U.K.-based company.

“The labor problems facing National Express’ North American school bus operations are long-running and systemic, but are not addressed with the seriousness these issues demand,” said Ken Hall, International Brotherhood of Teamsters General Secretary-Treasurer. “While the company is lauded for its reporting, it’s what is not reported that we believe holds unnecessary risks for investors. Unfortunately, for several years now, investors and workers’ concerns have fallen on the deaf ears of senior management and the board of directors.”  

As long-term shareowners the pension funds believe their proposal will minimise the risk of both reputational damage and the impact on shareholder value resulting from the continuing disputes.

“We are backing the resolution because the company continues to rebuff efforts to discuss the way that workers employed on its U.S. school bus contracts are treated. When companies do not take workforce issues seriously, this can be a sign that they are also not taking into consideration the medium-term impact poor industrial relations is having on performance,” said Dave Prentis, General Secretary of UNISON. “Apart from wanting the best return for our current and future pensioners, UNISON is pleased to be part of a trans-Atlantic union coalition that is trying to win a better deal for employees in the U.S.”

Since the 2015 National Express AGM, the company has seen a number of decisions against it.

In October 2015, a National Labor Relations Board (NLRB) administrative law judge ruled that Durham had violated labour law in various ways, including National Express North American CEO David Duke unreasonably interrogating a driver about her attendance at a previous AGM.

In February 2016, following the decision of a group of administrative staff in California to seek workplace representation in 2015, the NLRB ordered Durham to begin bargaining with the Teamsters after it refused to talk to the union.

Last month, the employer also dropped one of its key objections to the NLRB, which it had used to delay accepting the result of a vote for union representation by Durham drivers in Florida in 2013. 

National Express shareholders will cast their votes at the company’s Annual General Meeting on 11 May 2016. 

UNISON is one of the U.K.’s largest trade unions, serving more than 1.3 million members who provide public services in both the public and private sectors.

Founded in 1903, the Teamsters Union represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.

A quarter of National Express shareholders revolt over labour rights

One of the things some people won't have noticed in the aftermath of the election is a very significant shareholder revolt at National Express over labour rights at its AGM last week.

A group of shareholders including LAPFF members had filed a resolution calling on the company to commission an independent review of practice in its US business Durham School Services. This was in response to ongoing allegations of anti-union activity, recently amplified by a report by two Labour MPs who flew to the US to have a look for themselves.

According to the company's RNS release, there was a 15.38% vote for the resolution, with abstentions taking the total not backing the board to over 19%. However, if you strip out the shares held by deputy chair Jorge Cosmen then the extent of the revolt amongst independent shareholders becomes clear. A chunky 18.5% voted for, with 5.5% abstaining, meaning that a quarter failed to back management.

This is very significant. My knowledge of shareholder activism at UK PLCs goes back to the late 1990s. I am certain this is the largest vote of its kind in this period. However, it is likely the largest shareholder vote against a UK company over labour issues, ever. 

National Express has managed something quite remarkable in sparking this scale of opposition. Let's see where it goes next.

Workers's capital in action

A very quick round-up of union shareholder activism just from this week.

Yesterday, Bruce Hamilton from the Amalgamated Transit Union attended the First Group AGM to highlight the conditions of workers in Greyhound bus terminals. The ATU wants Greyhound to negotiate a national contract covering terminal workers. The AGM was hit by a big vote against the rem report due to increased awards for the chief exec, something the ATU picked up on.

There's an interesting initiative at McKesson, where the Teamsters have filed a shareholder proposal targeting accelerated vesting of equity awards. This is also a company where union-led shareholder activism last year contributed to a say-on-pay defeat. 

The ITF has written to the SEC calling on the regulator to scrutinise the claims that Chevron has made about the development of its LNG project Gorgon off the North West coast of Australia. This follows an earlier union briefing to investors on cost over-runs.  

Teamsters call on National Express to respect workers rights

This is interesting, there have been long-standing complaints from US trade unionists about how the National Express US schoolbus business Durham School Services treats its drivers. They are now starting to talk to people in the UK, where the business is listed, about it.

TEAMSTERS TAKE DEMANDS FOR U.S. WORKERS’
RIGHTS TO NATIONAL EXPRESS
GROUP HEADQUARTERS
U.S. School Bus Workers Join UK Trade Unionists
(BIRMINGHAM, England) – Teamster school bus drivers who work at National Express Group PLC (NEX: LN) rallied with British members of Unite the Union outside the company’s headquarters today, demanding the multinational transport company honor the human rights of its North American workers.
The drivers expressed their concerns over what the union believes are National Express’s anti-worker, anti-union policies in its North American operations, which includes Durham School Services L.P. (“Durham”) in the U.S. and Stock Transportation in Canada.
They delivered a letter from Teamsters General President Jim Hoffa to National Express Group Chief Executive Dean Finch, calling on National Express to better respect the rights of its workers. Read the letter at www.teamster.org/hoffanexletter.
“It is deeply concerning when a United Kingdom-based public limited company engages in conduct that violates U.S. workers’ rights and deprives them of decent working conditions and respect. National Express’s subsidiaries should be operating in the pursuit of the highest standards, not failing to uphold the human rights that should be afforded to all its workers throughout the world,” Hoffa said.
Sebrina Isom, a former Durham driver and member of Teamsters Local 509 in West Columbia, South Carolina, USA, came to England for the second year in a row. The 25-year school bus driver traveled there to speak up for U.S. school bus workers.
“We are here to hold this company accountable. In my view, their anti-worker behavior has to stop,” Isom said. “We transport children, we work hard and it’s not too much to ask that National Express take more responsibility and treat us with fairness and respect.”
“I believe National Express has earned the reputation in all its operations as being the most hostile of the big British employers toward its employees,” said Tom Cashman, a National Express driver and shop steward from the South East coach station.
The delegation of Teamster school bus workers is meeting this week with major National Express stakeholders—union leaders, investors and political leaders—about the company’s negative human rights and labor relations record in North America.
The National Labor Relations Board (NLRB), which oversees U.S. labor law, issued 57 informal complaints since 2001 against Durham. These complaints resulted in settlements.
The complaints came as a result of charges by Durham workers, including disparate treatment, discipline and discharge of employees engaged in union organizing; surveilling workers engaged in union activity; and threatening workers with reduction in benefits, working conditions and the loss of employment for supporting unionization.
Durham recently filed objections with the NLRB to the union election in Santa Rosa County, Florida, USA, despite a strong vote in favor of unionization by the workers. The company claimed that the NLRB held no authority to investigate or hold a hearing, relying on a recent court decision—a theory that the Teamsters believe would disenfranchise the workers. The NLRB’s decision is pending.
“We voted overwhelmingly to have our union, but the company is not respecting our decision,” said Diane Bence, a Durham driver from Santa Rosa County who traveled to Birmingham, U.K. “Durham told us they would respect our vote, but that was before we voted. After the vote, the company didn’t respect what the majority of us wanted.”
National Express is the second-largest operator of school bus services in North America. The Teamsters represent 4,700 National Express workers. The company reports that 94 percent of the U.K. work force is covered by a collective bargaining agreement, as compared to only 32 percent of its North American work force.
Drive Up Standards is a global campaign to improve safety, service and work standards in the private school bus and transit industry. For information on the Teamsters Drive Up Standards campaign, go to http://www.driveupstandards.org.
Founded in 1903, the Teamsters Union represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.

Teamsters tackle National Express

Interesting release from, the Teamsters. There definitely seem to be a few issues at bubbling away at National Express...

NATIONAL EXPRESS GROUP PLC REFUSES TEAMSTERS’ CALL FOR INDEPENDENT BOARD COMMITTEE TO EVALUATE TAKEOVER BIDS

Teamsters Cited Need for Independent and Transparent Review Process

National Express Group PLC [NEX.L] has refused the International Brotherhood of Teamsters’ call that the company’s board establish a special committee of independent directors charged with evaluating potential strategic transactions and reporting back to shareholders.

In an Aug. 3 letter to John Devaney, chairman and acting chief executive of the UK transport company, Teamsters General Secretary-Treasurer C. Thomas Keegel outlined the urgent need to establish an independent and transparent review process. National Express Group PLC’s response that day said that the company "sees no need to change the way in which matters of this kind are dealt with."

Among the Teamsters’ concerns: National Express Group’s £36.6 million loss in the first half of 2009; continuing turmoil over the rail franchises; the need to recruit a new CEO; and an escalating takeover battle that includes a potential bid involving the board’s deputy chairman Jorge Cosmen.

"In light of these troubling developments and apparent conflicts of interest on the board, it is crucial that a special committee of independent directors conduct the review of potential and formal bids using a transparent process that gives shareholders full confidence that the board is acting in our interests," Keegel said in the letter.

Noting that Cosmen is a member of the same Cosmen family that is leading a consortium with CVC Capital Partners that is exploring a potential bid for National Express Group, the letter urged that members of the special committee be fully independent of both National Express Group and the Cosmen family to build investor confidence in the company’s ultimate recommendations and protect Jorge Cosmen from any undue criticism throughout this process.

Welcoming Devaney’s leadership as acting chief executive following former CEO Richard Bowker’s abrupt resignation, the letter also noted Devaney’s statement to investors last week that the search for Bowker’s successor could take up to six months. The letter therefore suggested that shareholders’ interests would be best served by having a fully independent director chair the special committee.

In its response letter, National Express Group confirmed that Cosmen has not been involved in considering the consortium’s approach, nor any other approach that has or may be received by the company. However, National Express Group did not confirm whether Devaney is leading the review process and stated that "the Board that is reviewing any such issues is comprised of a majority"—not an entirety—"of independent directors." The company’s letter did not disclose the process currently being followed and made no commitment to report on such process to shareholders.

National Express Group has recently found itself in the center of a takeover battle, with rival FirstGroup PLC and the consortium approaching the company with preliminary offers. Other potential bidders reportedly include Stagecoach Group PLC and The Go-Ahead Group PLC.

The escalating takeover battle comes on the heels of National Express Group losing its CEO and signaling its intent to relinquish the East Coast rail franchise—its most significant business contract—later this year. The embattled company is now in conflict with the U.K. Department of Transport over the retention of its profitable East Anglia and C2C rail franchises.

"The company’s refusal to adopt a fully independent and transparent process during these turbulent times undermines investor confidence in the board’s leadership on these critical decisions affecting the future of National Express Group," Keegel added.

Founded in 1903, the International Brotherhood of Teamsters represents over 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

Reading round-up

I don't how I missed this. Unite and Teamsters calling for a corp gov review at National Express.

This piece on Responsible Investor is worth a read. I would say that as it takes a similar line to my own - shareholders weren't acting like owners in the run-up to the crisis.

Dave Osler on Madoff.

Finally, I’ve spotted a couple of books that are worth looking out for next year.

John Kay on the investment world and how to deal with it. He’s also speaking at the RSA.

And George Akerloff and Robert Shiller on “behaviourally informed Keynesianism” (I think I’m going to be a fan...)

Teamsters call for Iran disinvestment

Not sure what I think about this. The Teamsters president has written to "pension fund managers" (not sure if they mean fund managers or the pension funds themselves) calling on them to disinvest from companies doing business with Iran. The reasons given are the shocking treatment of Iranian trade unionists and the country's involvement with terrorist groups in Iraq. I'm in complete agreement one the former, I don't really know enough about the latter but from eveything I have read it does seem that Iran is involved in some murky activity in Iraq.

However, is disinvestment really the right way to go? It can be a dangerous stance for unions to take as they can appear to not care about financial returns. I accept that in this case it is different, not least because the US Government has taken a stance on companies doing business with so-called rogue states. In addition the SEC launched, and then pulled, a list of companies with links to the US target list. But might it not make more sense to try a bit of investor engagement first?

Anyway, here's the statement:

Official Statement of Teamsters General President James P. Hoffa

Contact:
Leslie Miller
(202) 624-6911
August 22, 2007


I have written to Teamster pension fund managers asking them to consider divesting shares in companies that do business with Iran.

Government authorities in Tehran abducted Mansour Osanloo, president of the Syndicate of Workers of Tehran and Suburbs (Vahed) Bus Company, on July 10. He was severely beaten. For more than a month he’s been imprisoned in the notorious Evin prison. Mahmoud Salehi, founder of the Saghez Bakery Workers Association, was condemned to a year in prison for his courage in mobilizing workers. He is incarcerated in Kurdistan, far from his family and in danger of dying.

Peace and democracy to the Middle East will require its citizens to come together to exercise their rights and choose their own leaders. There is no better way to foster democracy than to empower its unions.

Further, no Teamster should have to worry that his or her money is supporting a government that helps militant groups attack our troops in Iraq. That is exactly what the government of Mahmoud Ahmadinejad is doing, according to the U.S. State Department.

Because Ahmadinejad seeks to endanger Americans, Teamster money should not be invested in any company that profits from its relationship with his government.

Iran has declared its enmity to the United States of America. It has admitted to enriching uranium and developing missiles. It has continued to funnel millions of dollars to terrorist groups throughout the Middle East.

I believe that divestiture of investments in companies that do business with Iran can help bring peaceful change to that nation. Shareholder democracy brought about change in South Africa and in Latin America, and it can work again in the Middle East.

I also believe that divestiture of investments in companies linked to Iran is the patriotic thing to do as well as a wise investment strategy. The Securities and Exchange Commission has said that share prices can be harmed by business ties with countries that pose a global security risk.

The State of Missouri has a terror-free investment fund. A number of states, including my home state of Michigan, are passing legislation forbidding public pension funds from investing in companies that do business with sponsors of terrorism.

Just last month, the U.S. House of Representatives overwhelmingly passed a bill that protects private and public funds that divest shares in companies that invest more than $20 million in Iran’s energy sector.

Teamster money should never be used to support terrorism in any way, nor should it be used to support companies that do business with states that sponsor terror.

We Teamsters are proud patriots. I am confident that our pension fund managers will make sure that Teamsters’ investments will not be used to support companies that do business with Iran.