Apple Reaches Deal With Investors to Audit Its Labor Practices

Apple will conduct an assessment of its U.S. labor practices under an agreement with a coalition of investors that includes five New York City pension funds.

The assessment will focus on whether Apple is complying with its official human rights policy as it relates to “workers’ freedom of association and collective bargaining rights in the United States,” the company said in a filing last week with the Securities and Exchange Commission.

The audit comes amid complaints by federal regulators and employees that the company has repeatedly violated workers’ labor rights as they have sought to unionize over the past year. Apple has denied the accusations.

“There’s a big apparent gap between Apple’s stated human rights policies regarding worker organizing, and its practices,” said Brad Lander, the New York City comptroller, who helped initiate the discussion with Apple on behalf of the city’s public worker pension funds.

As part of its agreement with the coalition of investors, which also includes other pension funds for unionized workers, Apple agreed to hire a third-party firm to conduct the assessment, the coalition said in a letter to the company’s chairman on Tuesday.

The letter also laid out recommendations for the assessment, which include hiring a firm that has expertise in labor rights and that does not advise companies on how to avoid unionization. It recommended that the firm be “as independent as practicable.”

Apple’s federal filing did not refer explicitly to a third party, and the company declined to comment further.

Members of the investor coalition controlled about $7 billion worth of Apple stock as of last week, out of a market capitalization of more than $2 trillion. In its financial filing announcing the assessment, Apple offered few details, saying that it would conduct the assessment by the end of the year and that it would publish a report related to the assessment.

Last year, workers voted to unionize at two Apple stores — in Townson, Md., and Oklahoma City — and workers at two other stores filed petitions to hold union election before withdrawing them.

Many workers involved in union organizing at the company said they enjoyed their jobs and praised their employer, citing benefits like health care and stock grants and the satisfaction of working with Apple products. But they said they hoped that unionizing would help them win better pay, more input into scheduling and more transparency when it comes to obtaining job assignments and promotions.

In May, Apple announced that it was raising its minimum hourly starting wage to $22 from $20, a step that some workers interpreted as an effort to undermine their organizing campaigns.

Workers have also filed charges accusing Apple of labor law violations in at least six stores, including charges that the company illegally monitored them, prohibited union fliers in a break room, interrogated them about their organizing, threatened them for organizing and that it stated that unionizing would be futile.

The Communications Workers of America, the union representing Apple workers in Oklahoma City, has also filed a charge accusing Apple of setting up an illegal company union at a store in Columbus, Ohio — one created and controlled by management with the aim of stifling support for an independent union.

The National Labor Relations Board has issued formal complaints in two of the cases, involving stores in Atlanta and New York.

Apple has said that “we strongly disagree” with the claims brought before the labor board and that it looks forward to defending itself. The company has emphasized that “regular, open, honest, and direct communication with our team members is a key part of Apple’s collaborative culture.”

The investor coalition that pushed for the labor assessment argues that Apple’s response to the union campaigns is at odds with its human rights policy because that policy commits it to respect the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, which includes “freedom of association and the effective recognition of the right to collective bargaining.”

Mr. Lander, the New York comptroller, said that the coalition initially reached out to Apple’s board last spring to discuss the company’s posture toward the union organizing, but that it did not get a substantive response.

The coalition then filed a shareholder proposal in September urging Apple to hire an outside firm to assess whether the company was following through on its stated commitment to labor rights. The company responded late last year and the two sides worked out an agreement in return for the coalition withdrawing its proposal, according to Mr. Lander.

A coalition of some of the same investors, including the New York pension funds, has filed a similar proposal at Starbucks, where workers have voted to unionize at more than 250 company-owned stores since late 2021. Like Apple, Starbucks has cited its commitment to the International Labor Organization standards like freedom of association and the right to take part in collective bargaining.

But Starbucks has consistently opposed its employees’ attempts to unionize, and Starbucks has not engaged with the coalition of investors to work out an agreement. Jonas Kron, chief advocacy officer of Trillium Asset Management, one of the investors pushing proposals at both companies, said he expected the Starbucks proposal to go to a vote of the company’s shareholders. The company declined to comment.

The federal labor board has issued a few dozen formal complaints against Starbucks for violations including retaliating against workers involved in organizing and discriminating against unionized workers when introducing new benefits; the company has denied breaking labor laws.