Part One: Report from Wendy’s 2019 annual shareholder meeting…

The Fair Food delegation to the Wendy’s shareholder meeting, from left: Alex Schelle (Alliance for Fair Food), Chris Cox (ICCR), Travis J. McConnell, Kerry Kennedy (Robert F. Kennedy Center for Justice and Human Rights), Nely Rodriguez (CIW), Wilson Perez (CIW), Bill Fullarton, Silvia Sabanilla (CIW), Leslie Alanis (UNC Chapel Hill), Rev. Lynda Smith, Gabriela Cano Uchofen (University of Florida), Stuart Smith, Billy Hackett (University of Florida), Chelsea Rudman (Worker Rights Consortium), Marco Chumbimuni (UNC Chapel Hill), Jasiel Lopez (Alliance for Fair Food).

RFK Human Rights Executive Director Kerry Kennedy: “Why have you rejected a proven, verifiable solution, called for by farmworkers, consumers, and investors alike, knowing you could end injustice and bring your greenhouse suppliers into the Fair Food Program?” 

Wendy’s CEO Todd Penegor:  “We feel like we’re actually protecting workers’ rights…”

Meeting Recap…

Last week, Wendy’s corporate leaders gathered at the fast-food giant’s headquarters in Dublin, Ohio, just outside of Columbus, for their annual shareholder meeting.  The company’s top brass – CEO Todd Penegor, Board Chairman and top shareholder Nelson Peltz, and Chief Communications Officer Liliana Esposito – assembled to report on the progress and the challenges of the past year, to lay out the company’s vision for the future, and to take questions from the assembled shareholders. 

But amid all the earnings news, updates on environmental sustainability, and plans for expansion into new markets, there was one critical topic on which Wendy’s gathered leadership had nothing – absolutely nothing – new to report: the Fair Food Program.  Indeed, Wendy’s remains the only major fast food chain that refuses to join the award-winning social responsibility program, the agricultural industry’s only proven model for true supply chain transparency and verifiable human rights protections.  

But while Wendy’s executives may have hoped to skirt the issue of Fair Food at last week’s shareholders’ meeting, a significant percentage of those gathered in Dublin came to discuss that very question, and that question alone.  All told, over a dozen Fair Food movement leaders attended last week’s meeting – including farmworkers from Immokalee, community leaders from Ohio, faith and student representatives from around the country, and longtime CIW ally and international human rights leader Kerry Kennedy – and all were determined to call the company to account for Wendy’s unconscionable decision to turn its back on the farmworkers so essential to its success.

Play by Play…

The meeting began with opening remarks from Todd Penegor and Liliana Esposito, who painted a picture of a company moving full steam ahead into the 21st century, guided by a compass of sustainability, authenticity, and unwavering ethical standards.  With no apparent sense of the irony of her remarks, Ms. Esposito emphasized the importance, for both consumers and the company alike, of “traceability” and “visibility” into Wendy’s supply chain, even going so far as to say that the company recognized that “just having producers say, ‘we’ll be responsible’ was not going to be sufficient.”   Meanwhile, Mr. Penegor announced that the company would be focusing expansion efforts on airports and college campuses (a statement that certainly caught the attention of the many student leaders of the swiftly-growing, campus-based Boot the Braids Campaign who were sitting in the audience!…).

But the paint on their rosy portrait of progress had barely begun to dry before the whole frame of the meeting was turned upside down.  As the company’s presentation gave way to the Questions & Answers, control over the day’s message was quickly wrested away from Wendy’s executives by the well-organized team of Fair Food activists in attendance that day.

First up, right out the gate, was Kerry Kennedy, Executive Director of the RFK Human Rights Center.  We will let Ms. Kennedy’s powerful statement speak for itself, with an extended excerpt:  

… CIW farmworkers and their allies have traveled across the country to get answers from Wendy’s leadership today. Since its implementation, CIW’s Fair Food Program has eliminated modern day slavery and sexual violence, improved farmworker wages, and guaranteed basic protections for workers in the fields. Fourteen major corporations, including all of Wendy’s major fast food competitors, such as McDonalds, Burger King, Chipotle, and Subway, have adopted this model, that is proven to protect workers from the worst types of work-related abuses. However, Wendy’s has repeatedly rejected the opportunity to join a Program known as the gold standard for human rights protections in the agriculture industry. Mr. Penegor stated that expansion on college campuses is planned in order to drive growth. Dismay about Wendy’s refusal to be part of the Fair Food Program is not limited to those of us in this room, but is echoed by students on campuses across this country who are seeking to remove Wendy’s restaurants and have been successful.

This message has reached the pages of the most important newspapers and journals in our country, including the front page of the business section of the New York Times, to Forbes Magazine’s scathing critique of the Company’s failure to respond to its customers complaints. Forbes article states, “A brand’s reputation depends on how it responds to and interacts with customers. Wendy’s missed the mark by choosing to only respond to positive press – a move that could seriously hurt its image and add fire to the protests.”  

We heard about ESG [Environmental, Social, and Governance] this morning. But without the Fair Food Program, Wendy’s missed the mark on the ‘S,’ in ESG. Ms. Esposito spoke about the ‘E,’ the environment, in ESG. and about protecting cattle, but not about the tomato pickers. The tomato pickers who have a long history of abuse in our country, commonly suffered, such as child labor, wages stolen, and women abused. None of this is helped by putting people into greenhouses.

So Mr. Peltz, how will you respond to the hundreds of thousands of consumers across the country who are asking the same question we ask today: Why have you rejected a proven, verifiable solution, called for by farmworkers, consumers, and investors alike, knowing you could end injustice and bring your greenhouse suppliers into the Fair Food Program? Thank you.

Mr. Peltz declined to answer, and instead passed the baton to CEO Todd Penegor, who claimed in response that Wendy’s was in fact “serving workers in a much better fashion” by moving their tomato supply chain to greenhouses and putting in place third-party audits concluding, “We feel like we’re actually protecting workers’ rights.” 

On that note, Chelsea Rudman from the Workers Rights Consortium – the global monitoring organization that has overseen the transformation of the Bangladeshi garment industry through the groundbreaking Bangladesh Accord – took the mic.  Ms. Rudman recounted the tragic failure of corporate-driven social responsibility efforts, like those championed by Wendy’s, to protect workers’ rights in the global garment industry, resulting in the deaths of thousands of workers in factory fires and building collapses:

… The reasons why auditing programs, such as the one advertised by Wendy’s, fail to ensure that suppliers are living up to purchaser standards are threefold. First, these programs lack meaningful enforcement mechanisms. While brands may have written standards on paper, there are no market-based consequences when there is a violation of those standards. Wendy’s own Supplier Code of Conduct does not legally require Wendy’s to terminate its business with non-compliant suppliers. Second, these programs lack transparency, making it nearly impossible for independent monitors and consumers to adequately evaluate a company’s supply chain practices. And crucially, they lack worker participation, which allows employees to speak up when their rights are violated.

In contrast, the Worker-driven Social Responsibility model – from the Bangladesh Accord to the Fair Food Program – has a proven and highly awarded track record of bringing meaningful and lasting changes to low-wage supply chains across the globe. Over 250 brands have already made a legally-binding commitment to improve working conditions in their supply chains, in both garment factories and in agricultural fields – including all of Wendy’s leading competitors in the fast-food industry, which are partners in the Fair Food Program.

Since the Fair Food Program is the industry gold standard for social responsibility in U.S. agriculture, why would Wendy’s put its reputation at risk by entrusting the oversight of its supply chain to these auditing schemes, like SA8000, which have been proven to fail?   

In response, Wendy’s executives tried out a couple of new talking points on the assembled shareholder audience.  First, Mr. Penegor claimed that Wendy’s has a “zero tolerance policy” in enforcing its Code of Conduct, stating that if Wendy’s suppliers “aren’t adhering to the Supplier Code of Conduct, we will make the necessary changes.”  Ms. Esposito added that the Fair Food Program does not yet cover everything, and Wendy’s needs an approach that can “cover all of our agricultural products.”

Next, the CIW’s Nely Rodriguez brought the Fair Food delegation’s comments to a close, hammering Wendy’s misleading claims about working conditions in greenhouses:

Today, we have also heard that greenhouses somehow protect the working conditions for the workers, and that’s just not the case. Plastic roofs do not protect workers from labor abuses, such as sexual abuse, gender-based violence, forced labor, not having access to shade and water…  And so today, the question for you is, why doesn’t Wendy’s use its market power to bring its suppliers into the Fair Food Program to help expand this Program to not only receive produce that is made in a sustainable greenhouse, but also in a way that respects farmworkers’ and agricultural workers’ rights?

By the end of the meeting, the theme of the day, despite the best efforts of Wendy’s leaders to steer clear of the Fair Food Program and the ever-growing boycott, was clear: No matter how deep, and how long, Wendy’s leaders insist on driving their own heads into the sand, they aren’t fooling anyone.  The rest of the world – from human rights experts to everyday consumers to farmworkers themselves – sees the reality of Wendy’s refusal to step up to real social responsibility for what it is, and will not let the final fast-food holdout rest until it joins the Fair Food Program.

Check back later in the next few weeks for Part 2 of the Wendy’s shareholder meeting report, as we take a deeper dive into the company’s arguments in its defense… and the Fair Food nation’s answers!