RETAILERS’ SHAREHOLDER MEETINGS MAY HAVE SWEATSHOPS ON AGENDA
NEW YORK — Sweatshop issues are likely to be coming up this spring at the annual meetings of some major retailers.
The May Department Stores Co. and Wal-Mart Stores are both targets of stockholder proposals to combat sweatshops.
The pension and health benefits board of the United Methodist Church has filed a shareholder proposal with Wal-Mart to insure that the retail giant’s suppliers are not operating under sweatshop conditions. The proposal is expected to be considered at Wal-Mart’s annual stockholder parley on June 6 and has the backing of several other religious groups.
In response, Wal-Mart in the proxy issued a “statement in opposition” outlining a number of steps it has taken in relation to labor conditions, including standards established in 1992.
Wal-Mart said that its suppliers are required to meet several standards including fair compensation, reasonable hours and a safe working environment.
The retailer was attacked last year by human rights activists who charged that apparel carrying the Kathie Lee Gifford label it sells exclusively had been produced in Honduras under sweatshop conditions.
May Co., according to a Securities and Exchange Commission filing, is also being pressured to increase its monitoring of apparel plants for sweatshop conditions in a proposal by the May Independent Shareholders’ Committee formed by UNITE, the textile and apparel workers union. The committee has also filed another proposal to eliminate a May Co. poison pill that’s been in effect since 1984.
May Co. plans to recommend that shareholders vote against both proposals, with reasons for opposing them in the proxy statement for the retailer’s annual meeting of May 23.
The union, which represents about 75 May Co. employees at three store locations, owns 37 shares of the chain, although its pension fund owns another 38,320 shares.
In one proposal, the committee calls on May Co. to work with non-governmental organizations to establish independent monitoring of its vendors as well as to strengthen its own internal program. The group also asks May Co. to translate its “Vendor Standards of Conduct” into the language of its suppliers’ employees and to require suppliers to distribute the standards among their workers.
In the proposal, the union says it has received reports regarding abuses at factories supplying May Co., including a September 1996 charge of rape by a female worker at a factory in Honduras called Paraiso, which has produced men’s wear under May Co.’s Claybrooke label.
The other proposal asks the retailer to eliminate the poison pill, which is designed to impede any takeovers. Under the current agreement, the pill is triggered if any person or group purchases more than 20 percent of the company.
“We believe poison pills are devices designed to entrench management because they deter takeover attempts and effectively prevent a change in control of the company that does not have the approval of the board of directors,” the proposal states. The committee also asks that shareholder approval be required for any future poison pill agreement.