May 13, 2009
Investors Support Passage of Employee Free Choice Act
by Robert Kropp
In a letter to Congress, a group of institutional investors argue that passage of the bill would
restore human rights in US workplaces and contribute to economic recovery.
A group of 26 institutional investors, with assets under management of $372 billion, have sent a
letter to Congressional sponsors of the Employee Free Choice Act of 2009 (EFCA),
expressing its support for the passage of the bill.
The investors, all of which are signatories of the
United Nations Principles for Responsible
Investment (PRI), identify themselves as "long-term investors seeking both sustainable
financial performance and the protection of human rights. Among the signatories of the letter are
the AFL-CIO Employees
Staff Retirement Fund, Calvert Asset Management, and Trillium Asset Management. Boston Common Asset Management, another signatory, is
leading the outreach to S&P100 companies on the issue as well.
Passage of EFCA would
"amend the National Labor Relations Act to establish an efficient system to enable employees to
form, join, or assist labor organizations, and to provide for mandatory injunctions for unfair
labor practices during organizing efforts." Under the bill, the authority to hold a secret ballot
vote on union formation would transfer from the employer to workers.
The letter, sent
on May 11, argues that "the freedom to form or join a union of one’s choice and to bargain
collectively for the terms of employment are fundamental human rights," according to the UN's Universal Declaration of Human
Rights as well as the core conventions of the International Labor Organization (ILO).
Citing an Economic Policy Institute study that links
stagnation of average wages with a decline in union density, the investors noted that during the
same time, executive compensation has increased dramatically. Such conditions depress "the
prospects for sustained economic recovery," according to the letter.
The letter also cites
a study by Human Rights Watch that concludes,
"workers' freedom of association is under sustained attack in the United States, and the government
is often failing its responsibility under international human rights standards to deter such
attacks and protect workers' rights."
The letter states that companies with the best labor
practices provide superior returns to shareowners, and that a company's policies on human rights is
an important factor in predicting future financial performance. The investors "believe that an
environment where labor rights are respected and workers are able to negotiate with management at
arms-length often provides fertile ground for future business growth."
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