Labor-affiliated investment group sends letter to Mercedes requesting recommitment to company principles

On September 7, the SOC Investment Group sent a letter to the chairman of Mercedes-Benz AG’s board questioning recent statements made by a lawyer representing Mercedes subsidiary MBUSI before the National Labor Relations Board.

An arm of the Strategic Organizing Center and affiliated with several major national unions, the SOC Investment Group works with union-sponsored pension funds to “enhance long-term shareholder returns through active ownership.”

The letter sent earlier this month describes a lawyer’s statements before the NLRB, the federal agency responsible for enforcing the National Labor Relations Act, as an assertion that Mercedes’ Principles of Social Responsibility and Human Rights did not apply to its U.S. subsidiary. It also criticized a letter from the company responding to an earlier inquiry as “deliberately misleading as to the status of its legal entanglements surrounding events in Alabama.”

During the months before and after the union election at Mercedes’ plant in Vance, Alabama, the United Auto Workers filed several unfair labor practice charges and a formal challenge to the election results.

Mercedes’ Principles formally commit the company to remaining neutral during organizing campaigns, but the UAW repeatedly accused the company of illegally coercing its employees to vote against unionizing in 2024.

Earlier this year, the NLRB and Mercedes reached a unilateral settlement in one ULP case. Mercedes agreed to post a notice in its plant describing workers’ union organizing rights. The UAW’s challenge to the election results remains undecided.

One of the assertions made by Mercedes’ retained counsel before the NLRB in May, as quoted in a UAW Research Department report and the SOC Investment Group’s letter, reads:

“This [the Principles] is not the National Labor Relations Act. This is not an MBUSI policy. It’s not a handbook here in the State of Alabama. It’s a document between something in Germany and some group of unions in Germany, and we are wasting our time with this.”

In an interview with APR, SOC Investment Group Deputy Director Emma Bayes explained why the organization asked Mercedes to reaffirm its commitment to neutrality during labor organizing campaigns and requested a meeting with the company.

“We don’t think this is an adversarial demand,” Bayes explained. “It’s an invitation for Mercedes to demonstrate that its governance framework has some teeth. And that its values extend beyond Germany and that it takes its human rights responsibilities seriously.”

“If the company cannot demonstrate that its due diligence framework actually governs subsidiary conduct with respect to labor rights, then shareholders cannot trust its human rights commitments at all,” she said. “And a fragmented approach to human rights oversight signals weak internal controls and creates legal operational and reputational risk.”

“The referenced statements made by external counsel during the NLRB proceedings were taken out of context, were incomplete, and were interpreted in a manner that does not reflect the context in which they were made,” a Mercedes spokesperson said in a statement provided to APR. “The proceedings concerned specific election-related allegations made under the U.S. National Labor Relations Act (NLRA) and the comments were made during an evidentiary debate as to whether the Principles of Social Responsibility and Human Rights were applicable in the context of the NLRA.”

“MBUSI took the position that, as the NLRA constituted the relevant legal basis for assessing the allegations before the Hearing Officer, the Principles of Social Responsibility and Human Rights were not legally relevant evidence for analysis of those allegations,” the statement continued.

“At no point did MBUSI dispute that the Principles of Social Responsibility and Human Rights apply to its operations,” the spokesperson stressed. “On the contrary, MBUSI explicitly stated during the proceedings, and on the record, that its conduct during the election period was consistent with the principles.”

“I think that the counsel’s statements about the human rights policy seem representative of the company’s attitude about worker organizing in the US,” Bayes told APR. “And that’s because there have been a considerable number of unfair labor practice charges filed, many of which the NLRB investigated and found merit.”

“So, taken together, it doesn’t seem like the counsel’s remarks are just a one off legal tactic,” she said. “It seems to more be reflective of a systemic disconnect between the parent company’s governance framework and its subsidiary’s operational culture.”

“We remain committed to ensuring that MBUSI continues to be an employer of choice and provides a safe, supportive work environment,” the Mercedes spokesperson’s statement concluded. “We are proud of what the Tuscaloosa plant has achieved over nearly 30 years and look forward to building on that success – delivering superior vehicles to the world while investing in our people.”