ILO Standards
McDonald’s Corporation – Received 10.86% of the Vote
Proposal No. 4. Shareholder proposal relating to labor standards
The AFL-CIO Reserve Fund, the Adrian Dominican Sisters and the Sisters of Charity of
the Blessed Virgin Mary have advised the Company that they intend to present the
following shareholder proposal at the Annual Shareholders’ Meeting. The respective
addresses and share ownership information for each of the proponents will be furnished
to any shareholder by calling 1-630-623-2553 or by sending a request to McDonald’s
Corporation, Investor Relations Service Center, Department 300, McDonald’s Plaza, Oak
Brook, IL 60523-1928.
Shareholder proposal McDonald’s Corporation–Human Rights Standards
Whereas, we believe McDonald’s purchases significant amounts of produce, such as
tomatoes, for its sandwiches and salads, and
Whereas, the United States Department of Justice has successfully prosecuted several
cases of modern-day slavery in the U.S. agricultural industry since 1996, involving over
1,000 workers, (see, for example, US v. Ramos; US v. Lee; US v. Flores; US v. Cuello;
US v. Tecum) and there is increasing public awareness and media coverage of the
sweatshop conditions and abuses that many agricultural workers face, and
Whereas, we believe violations of human rights in McDonald’s supply chain can lead to
negative publicity, public protests, and a loss of consumer confidence that can have a
negative impact on shareholder value, and
Whereas, McDonald’s current Code of Conduct for suppliers is based heavily on
compliance with the law (“McDonald’s Code of Conduct for Suppliers, pages 2,3,4), and
U.S. agricultural workers are excluded from many labor laws that apply to other U.S.
workers (for example, National Labor Relations Act of 1935, 29 U.S.C. § 151 et seq.;
portions of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, 213), and
Whereas, other multi-national corporations, including other large produce purchasers,
have implemented enforceable and meaningful codes of conduct for their supply chains
based on international human rights standards, such as the International Labor
Organization’s (“ILO”) standards, and
Whereas, in our opinion as shareholders, enforceable human rights codes of conduct
based on the ILO’s Declaration on Fundamental Principles and Rights at Work and other
conventions and are essential if consumer and investor confidence in our company’s
commitment to human rights is to be maintained,
Therefore, be it resolved that the shareholders urge the Board of Directors to adopt,
implement, and enforce a revised company-wide Code of Conduct, inclusive of suppliers
and sub-contractors, based on the International Labor Organization’s (“ILO”) Declaration
of Fundamental Principles and Rights at Work and the following other relevant ILO
conventions:
•
Employment shall be freely chosen. There shall be no use of forced labor,
including bonded or voluntary prison labor (ILO Conventions 29 and 105);
•
Workers are entitled to overtime pay when working more than 8 hours per day
(ILO Convention 1);
•
All workers have the right to form and join trade unions and to bargain
collectively. (ILO Conventions 1 1, 87, 98, 110);
•
Worker representatives shall not be the subject of discrimination and shall have
access to all workplaces necessary to enable them to carry out their representation
functions (ILO Convention 135).
The Board should also prepare a report at reasonable cost to shareholders and the public
concerning the implementation and enforcement of this policy.
The Board’s recommendation
Our Company has a well-respected and well-recognized record and reputation for
business honesty and integrity, including sound employment practices worldwide. We are
committed to the fair and ethical treatment of our employees, and only do business with
suppliers who are committed to those same principles. As more fully discussed below, we
have meaningful and enforceable employment policies that require high workplace
standards for our employees. We also have a supplier code of conduct that requires
suppliers to maintain similar high workplace standards for their employees. Therefore,
while we appreciate the proponents’ interest in labor standards generally, we have
existing policies and practices already in place that substantially address the areas
covered in the proposal, and more importantly, are tailored and appropriate for our
business.
Policies relating to our employees
We believe that all of our employees deserve to be treated with dignity and respect. We
are committed to complying with applicable laws, including all labor and employment
laws, wherever we do business, as well as maintaining high standards of business
conduct. We have long-standing policies relating to employee rights, working conditions
and employment practices, including the McDonald’s Standards of Business Conduct,
which establish a foundation for the Company’s core business values. The Standards of
Business Conduct address areas of the proposal with respect to our employees, including
diversity, fair compensation, equal employment opportunity, non-discrimination and non-
harassment, as well as prohibitions on child and forced labor. These Standards as well as
other of our employment policies and practices are posted on the Company’s website at
www.mcdonalds.com.
Policies relating to employees of McDonald’s suppliers
The employees of McDonald’s suppliers and their subcontractors are not our employees.
They are exclusively employees of the suppliers and the subcontractors. We strongly
believe, however, that suppliers who are approved to do business with McDonald’s
should share our commitment to comply with the law wherever they do business, to
respect employee rights and to maintain high workplace standards. Accordingly, we have
implemented a McDonald’s Code of Conduct for Suppliers. The Code of Conduct for
Suppliers addresses areas of the proposal as they relate to the employees of McDonald’s
suppliers and their subcontractors, including matters relating to compensation, nondiscrimination and non-harassment, and prohibitions on child and forced labor. In
addition, the Company has protocols for appropriate inspections and monitoring of
supplier facilities. Compliance with this Code is a standard contractual requirement for
McDonald’s product suppliers and is the responsibility of each individual supplier. The
Code of Conduct for Suppliers is posted on the Company’s website at
www.mcdonalds.com .
Oversight by the Board of Directors
The Audit Committee of the Board of Directors receives regular reports regarding
compliance with the Standards of Business Conduct. The Audit Committee also receives
periodic updates regarding the Company’s material legal affairs and compliance with
applicable laws, including labor and employment laws worldwide. The Board’s
Corporate Responsibility Committee advises our management with respect to policies
and strategies that affect our role as a socially responsible organization, including issues
pertaining to the health and safety of and opportunities for our employees. We believe
this oversight provides effective enforcement control of these important policies and
practices.
Published reports
The Company periodically publishes a Corporate Responsibility Report that provides
information about many aspects of our business, including our employment practices and
our relationships with suppliers. The Corporate Responsibility Report and other
information relating to these issues can be found on the Company’s website at
www.mcdonalds.com. These established disclosure mechanisms substantially address the
reporting concerns raised in the proposal.
For all of the reasons described above, we believe that the proponents’ proposal to
implement a single code of conduct for the Company, its suppliers and subcontractors is
unnecessary. Further, our policies and practices, which are tailored to our business
structure, operations and the particular issues we face, are preferable to the “one-size-fitsall” approach favored by the proponents. We are confident that we will be best able to
continue to prove our strong commitment to business ethics and high workplace
standards by continuing to apply and enforce our existing business policies and
employment practices, rather than by implementing this shareholder proposal.
Therefore, your Board of Directors recommends that you vote AGAINST this
shareholder proposal.