Shareholders step up demands for real human rights protections in Wendy’s supply chain ahead of annual meeting!

A worker (left) and a member of a Fair Food Program education team chat this past summer next to a hand washing facility on a Fair Food Program farm. The Fair Food Program implemented mandatory, enforceable COVID protections early in the pandemic, and FFP farms have not experienced the sort of massive COVID outbreaks witnessed on all too many farms across the country.

 

CIW, shareholders issue press release announcing publication of Investor Advisory critical of Wendy’s failure to: respond meaningfully to shareholder resolution that garnered over 95% of shares voted at last year’s annual meeting; engage in good faith on shareholders’ legitimate human rights concerns; and join the Fair Food Program, the gold standard for human rights in the food industry today joined by all of Wendy’s main competitors… 

Deborah B. Goldberg, Massachusetts Treasurer and Receiver-General: “As State Treasurer, I am concerned about the integrity of a public company’s governance process. Wendy’s failure to honor a majority shareholder proposal on the issue of human rights in its food supply chain is startling to say the least.  I signed the letter to Wendy’s because I believe in the Fair Food Program’s proven track record of protecting farmworkers’ rights and also for my concern about shareholder rights.”

Here below is the press release, issued this morning by the Coalition of Immokalee Workers and Investor Advocates for Social Justice:

FOR IMMEDIATE RELEASE

Marley Monacello, Coalition of Immokalee Workers, marley@ciw-online.org, 239-357-0393
Gina Falada, Investor Advocates for Social Justice, gfalada@iasj.org, 973-509-8800

NYC Comptroller and State Treasurers Support Shareholders’ and Farmworkers’ Call for Board Accountability at Wendy’s Due to Company’s Non-Responsiveness to Majority Shareholder Resolution Demanding Transparency on Human Rights

As forced labor prosecutions surge in North American agriculture, Wendy’s criticized for its years-long failure to join Presidential Medalwinning Fair Food Program that all its major competitors committed to over a decade ago

MARCH 9, 2022 – Today, Investor Advocates for Social Justice (IASJ) and the Coalition of Immokalee Workers (CIW) released an investor advisory calling on shareholders to hold the board of the Wendy’s Company accountable for its non-responsiveness to a shareholder resolution approved by more than 95% of shares voted at Wendy’s May 2021 annual meeting.  The Resolution called for a report on human rights protections for farmworkers in Wendy’s supply chain, including protections from harms associated with COVID-19.  

Also today, the New York City Comptroller, together with the elected state treasurers of Illinois, Massachusetts, Nevada, Oregon, and Wisconsin, sent a letter to Wendy’s Board Chair Nelson Peltz to express their disappointment in the company’s non-responsiveness to the Resolution, which they said “raises questions about the Company’s governance and oversight over these issues,” and promised to “take this non-responsiveness into consideration when voting our proxies in 2022.”   Their letter also expressed concern over Wendy’s failure to join the CIW’s award-winning Fair Food Program, which all of Wendy’s major competitors did years ago.  The Fair Food Program is widely recognized as the gold standard for protecting farmworkers’ human rights in food retailer supply chains, and its 14 participating buyers include Wendy’s competitors McDonald’s, Burger King, Subway, Yum! Brands, and Chipotle, as well as major grocers and food service companies such as Whole Foods, Wal-Mart, Aramark, and Compass.  

As the IASJ/CIW advisory explains, a report issued by Wendy’s in December 2021 omits key information about Wendy’s supply chain monitoring efforts sought by the Resolution; is unacceptably silent regarding the modern-day slavery crisis in North American agriculture that has repeatedly made headlines since shareholders approved the Resolution; and is worrying in the scant information it does provide.  The advisory raises particular concern about the report’s admission that Wendy’s did not “institute any new requirements specific to COVID-19” to protect farmworkers in its supply chain.  In contrast, the Fair Food Program, which received a Presidential Medal in 2015 for effectively eradicating forced labor on its participating farms, includes groundbreaking COVID-19 health and safety protections.

The Wendy’s shareholder who filed the Resolution, IASJ Affiliate the Franciscan Sisters of Allegany NY, issued a statement to express its deep disappointment over Wendy’s non-responsiveness, as well as Wendy’s refusal to engage directly over the content of the report before publishing it, as is customary at other public companies: 

“The Franciscan Sisters of Allegany NY filed this shareholder proposal seeking concrete information about the effectiveness of human rights protections for farmworkers in Wendy’s supply chain. Our proposal also highlighted that Wendy’s is the only one of its major competitors not to have joined the Fair Food Program, the gold standard for protecting farmworkers’ human rights.  Even though the proposal received overwhelming support by a majority of Wendy’s shareholders, the company issued a report that was fundamentally non-responsive to the disclosures the shareholder proposal called for and on the substance of the issue itself. Despite our request, Wendy’s did not engage with us at all on the content of the report.”

Looking ahead to Wendy’s 2022 Annual Meeting, the Franciscan Sisters concluded: “Given the company’s refusal to engage productively with us as the proponent and heed the results of a majority vote, we have no choice but to call on fellow shareholders to join us in voting to hold the board accountable.”

New York City Comptroller Brad Lander echoed the Franciscan Sisters’ call: 

“I am concerned about Wendy’s responsiveness to shareholder concerns regarding its human rights practices in its supply chain. Farmworkers have been asking for years for Wendy’s to engage in good faith to address human rights practices in its supply chain, yet the company remains alone among its peers in refusing to sign on to the worker-driven Fair Food Program despite shareholder support for action to protect workers. Wendy’s shareholders expect the company’s board to uphold its duty to respond meaningfully to shareholder proposals that receive majority support, yet the company has failed to do so on a proposal that received over 95% support last year.”

Deborah B. Goldberg, Massachusetts Treasurer and Receiver-General, expressed her concern as well:

“As State Treasurer, I am concerned about the integrity of a public company’s governance process. Wendy’s failure to honor a majority shareholder proposal on the issue of human rights in its food supply chain is startling to say the least.  I signed the letter to Wendy’s because I believe in the Fair Food Program’s proven track record of protecting farmworkers’ rights and also for my concern about shareholder rights.”

A wave of recent actions by U.S. law enforcement agencies has brought multiple forced labor operations to light on farms outside the Fair Food Program in the year since the Resolution passed. In just one such recent enforcement action — described as “one of the country’s largest-ever human trafficking and visa fraud investigations” by the U.S. Department of Justice —federal prosecutors in Georgia arrested 24 people in an operation alleged to have affected more than 71,000 workers and generated over $200 million in illegal profits for the criminal enterprise.

“When the headlines of ‘modern slavery in Georgia’s fields’ recently emerged from one of U.S. history’s largest human trafficking cases, as farmworkers, we were devastated, but not surprised,” said Lupe Gonzalo of the Coalition of Immokalee Workers, who labored in U.S. fields for 12 years.  “Human rights abuses have riddled the industry for far too long, and that is exactly why we built the Fair Food Program: to reclaim our dignity.  For over eight years, despite repeated calls from farmworkers and our consumer allies alike, Wendy’s has failed to join all its major competitors in the Program. With the alarming rise in federally-prosecuted modern slavery cases, that decision is more unconscionable now than ever.”

Reacting to the advisory and investor letter published today, Majority Action, a non-profit, non-partisan organization that focuses on corporate governance, social responsibility, and long-term value creation, voiced its support for shareholders seeking to hold Wendy’s board accountable: Shareholder resolutions are an essential tool for advancing environmental, social, and governance standards and performance among public companies,” stated Majority Action Co-Founder and Executive Director Eli Kasargod-Staub. “But ultimately, majority votes on these proposals are only as strong as shareholders’ willingness to back them up with votes to hold directors accountable when companies fail to adequately implement them. Wendy’s refusal to both comply with the specific demands of the 2021 shareholder resolution or address the underlying issues of the risks of harmful working conditions and modern slavery in its supply chain is unacceptable, and we support shareholders in using proxy voting to hold the board accountable for these failures in 2022.”

Later this morning, IASJ Senior Program Associate Gina Falada will be discussing the Wendy’s investor advisory at a panel hosted by Majority Action at the spring conference of the Council of Institutional Investors (CII).  The panel, entitled “Call and Response: What Should Shareholders Do When Companies Fail to Heed a Majority Vote?,” will also feature a discussion of shareholder resolutions at fossil fuel company Chevron and private prison company GEO group.  CII is a nonprofit, nonpartisan association of U.S. public, corporate and union employee benefit funds, other employee benefit plans, state and local entities charged with investing public assets, and foundations and endowments with combined assets under management of approximately $4 trillion.

###

Investor Advocates for Social Justice (IASJ)

Investor Advocates for Social Justice (IASJ), a successor to the Tri-State Coalition for Responsible Investment, is a 501(c)(3) non-profit organization representing investors with faith-based values who seek to leverage their investments to advance human rights, climate justice, racial equity, and the common good. On behalf of our Affiliates, we engage companies to address strategic environmental, social, and governance issues and advocate for change. IASJ uses a variety of shareholder advocacy strategies to encourage corporations to adopt more ethical and sustainable business practices, and believes in seeking out and building collaborative partners who share similar goals, in an effort to increase the effectiveness and impact of our work. Founded in 1975, formerly known as Tri-CRI, we have over forty years of experience with shareholder advocacy and responsible investment. www.iasj.org

Coalition of Immokalee Workers

The Coalition of Immokalee Workers is a worker-based human rights organization and Presidential Medal recipient internationally recognized for its achievements in the fields of social responsibility, anti-sexual violence efforts, community organizing, and ending slavery. The CIW’s Fair Food Program is a groundbreaking partnership among farmworkers, produce farmers, and fourteen major food retailers, including Walmart and McDonald’s. Participating retailers agree to purchase from suppliers who meet a worker-driven code of conduct, which includes a zero-tolerance policy for slavery and sexual assault. Retailers also pay a “penny-per-pound” premium, which is passed down through the supply chain and paid out directly to workers by their employers. Since the program’s inception in 2011, buyers have paid nearly $40 million in premiums. For more information, visit www.fairfoodprogram.org.