National Express Group: A Culture of Contradictions

Does the UK Multinational Carry An Anti-Union Message Throughout US?

May 2011 This report was compiled by the International Brotherhood of Teamsters in support of the human rights of employees working for the Group’s US subsidiary, . Table of Contents

Letters from Members of US Congress ______2

Executive Summary ______4

Introduction from General President James Hoffa, International Brotherhood of Teamsters ______5

Overview ______6

Workers’ Need for a Union ______7

Labour Rights in the United States ______10

National Express Group Policies in Principle ______12

National Express Group Policies in Practice ______14

Recommendations and Conclusion ______18

References ______19 Foreword from Member of US Congress

−2− Letter from Members of US Congress

Rush Holt Laura Richardson Russ Carnahan Patrick J. Murphy John Garamendi

Joe Baca Linda Sanchez Joe Sestak Maxine Waters Emanuel Cleaver II

George Miller Grace Napolitano Pete Stark Rosa L. DeLauro Lucille Roybal-Allard

Raul M. Grijalva Jan Schakowsky Bill Pascrell Jerry F. Costello Howard L. Berman

Phil Hare Judy Chu William Lacy Clay Danny K. Davis

Lloyd Doggett Mark Critz Jesse Jackson Jr. Chris Murphy

Mike Honda Albio Sires Barbara Lee Joe Courtney

Bob Filner Zoe Lofgren Sam Farr Al Green

−3− Executive Summary

National Express Group’s United States subsidiary, Durham School Services, is the second-largest privatised provider of school transportation in the US Its 20,600 workers in North America operate more than 14,000 school bus routes each day, in the iconic yellow school recognised around the world.

In contradiction to the Universal Declaration of Human Rights, International Labour Organisation protocols and National Express Group’s own policies, serious concerns have been raised that Durham School Services has sought to discourage its workers from exercising their human rights at work.

In the US, the National Labor Relations Act (NLRA) guarantees the right to freedom of association, the right to bar - gain collectively and the right of private-sector employees to join trade unions. The National Labor Relations Board (NLRB) oversees the implementation of the act.

Following nearly 10 years during which more than 200 charges of unfair labour practices had been filed against Durham School Services, 36 US congressmen signed a letter to the chief executive of National Express Group in 2010, voicing their serious concerns about the company’s anti-union stance in the US

In the company’s UK operations, 94 per cent of National Express workers are represented by a union, but the experi - ence of Durham School Services workers is in stark contrast. Management behaviour has displayed evidence of a clear anti-union stance. The company has funded, produced and distributed materials providing distorted and misleading anti-union information and a company-issued management manual containing explicit instructions on how to defeat employee attempts to form a union.

Durham’s workers are low-wage earners but nevertheless have borne the brunt of the company’s cost reductions. More importantly, the company’s opposition to union representation deprives workers of a voice and dignity in the workplace and access to affordable benefits such as decent health care. Some of those workers’ tragic stories are told in this report.

The National Express Monitoring Commission, a private group formed to review concerns over the company’s con - duct, investigated allegations of the company’s anti-union practices in 2009, heard testimony that “extensive viola - tions of labor law have been a part of the National Express anti-union campaign.” Testaments to the commission included many examples where the company’s management or supervisors were alleged to have used anti-union tac - tics to “chill” workers’ rights and create a climate of fear.

Durham School Services is a private company contracted to deliver a public service and is funded by the US taxpayer. As such, public funds are financing a British company’s anti-union campaigns to deny basic human rights to American workers.

Furthermore, as a bus operator in Britain, National Express receives subsidies from the British taxpayer. Public subsi - dies should be coupled with the responsibility of operating in a responsible manner as a good corporate citizen rather than running the risk of reputational harm to British industry through its anti-union behaviour.

This report demonstrates to National Express, shareholders, policymakers and the wider public how a change of prac - tice and approach from National Express is necessary if the company is to gain repute and secure greater integrity in light of its claims on human rights in its workplaces. It recommends action and pressure to be brought to bear by shareholders and legislators, in the hope that National Express will, at long last, treat its overseas workers with the re - spect that it promises at home.

−4− Message from James P. Hoffa General President, International Brotherhood of Teamsters

The US privatised student transportation industry is dominated by two British-based companies: FirstGroup and National Express Group. I can think of no other sector where that is the case and I welcome the jobs and services provided by these two multi - national companies.

But there is a disparity between these two operators. FirstGroup is a multinational em - ployer which acted on concerns raised by its stakeholders and whose US subsidiary, First Student, has adopted a policy respectful of its employees’ human rights, especially those concerning freedom of association; National Express Group’s US subsidiary, Durham School Services, despite claiming to honour and adhere to international conventions on human rights, “displays a record littered with concerns regarding unfair labour practices and legal complaints from its employees who dare to stand together to form a union.”

This dossier provides evidence of concerns of how, in the US, National Express Group operates both against its own stated principles and its employment practices at home, in Britain. You will read one particular story of hardship and dedication of a driver in California, a state highly glamorised in images seen round the world. Gina Beck is deter - mined to eke out a living for herself while driving special-needs students in another iconic American image, the yel - low school bus. Her selfless dedication to her students has been repaid by losing her apartment, living on handouts and borrowed medication because her employer cut her hours and failed to provide decent benefits.

International conventions on human rights are intended to protect vulnerable workers from exploitation. So often we hear of the abuse of employees in developing countries, but the developed world is not immune from such practices. In the US we have the widest disparity of wealth of any industrialised nation. At the same time many employers, like National Express, have embraced an anti-union stance that has reduced both union density and employee protection. Sadly, we must recognise a tragic truth—that if we fail to uphold the principles of responsible employment in the de - veloped world, we cannot hope for it to be observed elsewhere.

The Teamsters Union is determined to demand, as at FirstGroup, that companies like National Express Group go fur - ther than the bare minimum and apply the same principles and good practices wherever they operate, and join with us to raise standards in an industry transporting America’s most precious cargo—our children.

I hope by revealing the extent of concerns over National Express Group’s failure to protect human rights in the US, we can join together globally to protect the vulnerable, to give workers the dignity they deserve no matter their station in life and persuade the company to address the legitimate concerns set out in this report. Further, I hope this dossier opens lines of communication with the corporate leaders at National Express Group so they can, like their counter - parts at FirstGroup, halt the anti-union behaviour of their North American subsidiary.

−5− Overview

n the United States each day, more than 24 million During National Express’ 7 April, 2011 presentation to schoolchildren are safely transported to and from investors and analysts, the company stated that around 32 Ischool in the iconic yellow buses that are recognised per cent of their North American workers are covered by a around the world 1. The drivers and their co-workers pro - collective bargaining agreement. Some of these employees vide a highly valued role, with responsibilities that go far were union members before Durham School Services won beyond the basic services of punctually and safely carry - the school board contract from their previous employers. ing children between home and school. School bus work - Half of all employees of First Student—FirstGroup’s ers undertake responsibilities over and above those of school bus division—are union members. When First - other transportation workers, requiring special certifica - Group entered the US market in 1999, employees at First tion, drug and alcohol screening, extensive background Student school bus operations reported widespread ac - and criminal record checks and the ability to deal with tivity by management that violated workers' freedom of children with special needs. association. After these issues were brought to the atten - The majority of school bus drivers in the US are fe - tion of the parent company, FirstGroup, and following male, many of whom are robust engagement from disadvantaged by UK institutional racial or ethnic groups. investors, politi - Historically, most school cians and other bus workers were public stakeholders, the employees, although in company imple - recent decades school mented a company- districts have increas - wide freedom of ingly contracted the association policy, service to outside com - overseen by a com - panies, as more public pliance monitoring services have been priva - programme. tised. Despite this trend, Since early 2002, however, around 68 per representations have cent of school buses re - been made to en - main directly gage National Ex - operated by public press in a friendly school boards 2. and constructive di - Both of the largest alogue regarding private providers of unionisation in school bus services in Durham School North America are British-owned multinational corpora - Services. That dialogue has involved entreaties to the com - tions, the largest of which is FirstGroup, operating in the pany from leaders and officers of the International Broth - US as First Student. National Express Group entered the erhood of Teamsters, the Transport and General Workers US market in 1998, acquiring several school bus compa - Union (TGWU, now Unite the Union), the National nies, which have been blended into Durham School Serv - Union of Rail, Maritime and Transport Workers (RMT), ices, the second-largest privatised provider of school bus the Associated Society of Locomotive Engineers and Fire - transportation in the US men (ASLEF) and the Transport Salaried Staffs Associa - Durham School Services employs 20,600 workers in tion (TSSA) in the UK, and the International Transport North America, around 19,000 of who are bus drivers, Workers’ Federation (ITF). monitors or mechanics. Durham currently operates Successive high-ranking National Express office hold - school bus services in 30 US states, running more than ers repeatedly failed to adequately address requests from 13,500 buses a day 3, operating more than 14,000 school trade unionists, such as the Teamsters General President routes every day. James P. Hoffa and the TGWU’s then-General Secretary In the UK, 94 per cent of National Express workers Tony Woodley. During the course of this correspondence, are represented by a union 4, in line with the company’s and despite starting from a position of claiming to sup - explicit commitments to workers’ rights and positive em - port employees’ “rights attendant to union organisation,” ployee relations. Unfortunately, the experience of work - there are strong concerns that National Express has un - ers employed by Durham Schools Services is directly dertaken a campaign of anti-union activities in its Ameri - contrary to its British counterparts. can subsidiary.

−6− Workers’ Need for a Union

he real, everyday experiences and the hard figures These cuts are due to reductions in time and reluctance show that workers at Durham School Services need a by the company to pay for tasks such as pre-trip bus in - Tunion if they are to gain dignity and respect in their spections and refuelling of buses. In the 2010 Annual Re - place of work. Those workers who do have union repre - port and Accounts, National Express boasts $25 million sentation have already achieved these goals and more. savings in North America including an improvement of In 2010, among full-time wage and salary workers, 0.5 per cent of revenue in driver wages savings. In a pres - union members had median usual weekly earnings of entation to investors and analysts in Madrid on 6-7 April, $917, while those who were not represented by unions 2011, the company’s Strategic Initiatives slide stated, “Re - had median weekly earnings of $717 5—a nearly 30 per duce driver wages” and at the same briefing, David Duke, cent difference in pay that is often the difference between Managing Director, North America stated, “We have to a middle-class life or poverty. focus on taking cost out of the business…we are in a Even though Durham workers are already low-wage business that requires us to be low-bid… 6” earners, they have frequently complained of cuts in pay.

Alleged Wage and Hour Abuse

Durham Driver Phillis Hodo Fights for Her Pay

Phillis Hodo started would not be paid for the work in excess of 45 hours but work for Jones Bus in would have to bank those hours and take them as paid time Grayslake, Ill. in 2004, off. This agreement continued for several years until Hodo working 42.5 hours a was abruptly informed in 2009 that she could no longer bank week driving school hours and would have to be paid what she was owed. De - buses and, in the hours spite working long hours for several years, and just using in between runs, she one day of banked hours, she was told that she only had nine put her previous experi - hours in the bank. ence running her own Hodo felt that not only had she been robbed of hours but construction business that her worked lunch break hours had not been banked and to good use, keeping all the time over 40 hours had not been calculated as over - the facility safe and time. In desperation she called the company’s human re - clean. She helped to repair buses and, on Saturdays, washed sources manager who asked her to be patient while her the bus exteriors and cleaned the interiors. claim was investigated. The initial result, though, was a re - When Durham School Services purchased Jones Bus in duction in her hours from a guaranteed 45 to just 20 hours, October 2005, they stopped paying for her work in between plus the loss of all summer-vacation school driving in 2009. school runs, leaving Hodo on greatly reduced wages. But The effect on Hodo was devastating. She was being Hodo wasn’t the only driver to have wages reduced. Durham forced to live on just $200 per week. She was fortunate that cut drivers’ pay and implemented a two-year pay freeze. The her landlord agreed to reduce her rent. She paid for vision 2 per cent raise Durham gave employees last year left them and dental benefits but could not afford the expensive pre - earning 4 per cent less than they were making four years mium for single-person health care—insurance that does not ago. When Hodo complained, a manager allowed her to cover pre-existing conditions and limits coverage to a paltry transfer to another depot in Lake Villa and guaranteed 45 annual amount. hours of work per week. After waiting for nine months, Hodo finally approached Hodo is a ‘standby driver’ who fills in for missing drivers the Illinois Department of Labor, which was able to collect and is certified to drive all types of buses, including those for the money owed to her in 2008: a whopping $6,300. But as special needs children. In her job, Hodo covered the hundred Hodo said, “I gave the company an opportunity to make good or so routes operated by the depot. on their promises to me. Now l have to fight a legal battle to Hodo soon found, however, that she was working 50 to try and recover the outstanding two and a half years of 60 hours a week, often missing out on her lunch breaks. And wages I feel were stolen from me by Durham to make matters worse, she states she was told that she School Services.”

−7− Workers’ Need for a Union cont.

Strategic Initiatives – Operating Platform, Slide 19 – National Express Group North America presentation to investors and analysts, Madrid 7 April, 2011.

Similarly, comparisons between unionised and non- higher, with the City yard, for example, matching unionised Durham School Services yards reveals a stark employee contributions. By comparison, the non- gap between the much needed benefits for workers who are unionised Santa Ana, Laguna Beach and Irvine yards in already employed in low-paid posts. A survey of the com - California only matched contributions for the first 3 per pany’s yards, undertaken by the Teamsters in early 2011, cent of employee payments to the pension fund, 50 per - found that unionised yards paid workers, on average, $2 cent to the next 2 per cent and nothing thereafter. more per hour than non-unionised yards 7. Findings on Durham’s health care contributions Additionally, in Teamster school bus contracts, drivers showed similar disparities between unionised and non- make real gains in health care benefits, paid sick leave and unionised yards. While the company will pay 50 per cent retirement security. of an employee’s health care costs at the unionised Beau - The low levels of remuneration for Durham School fort and Charleston yards in South Carolina, counterpart Services workers mean that they are overwhelmingly un - workers at non-unionised Lakewood, N.J., will receive a able to afford good health care coverage or decent pen - meagre $75 per week up to a limit of $1,500 of doctor sion provision. With a welfare system far less costs—a limit which would quickly be reached. Coupled comprehensive than that of the UK’s, the financial burden with the fact that employees are often only eligible for on low-paid workers in the US to provide for health care these contributions when they work more than 35 hours and retirement benefits is far more acute. The bottom line per week, even in some unionised yards, it becomes clear is that workers with chronic health care problems often that many Durham workers will, at best, struggle to cope go untreated. with their own illness, let alone that of a family member. The survey also demonstrated that Durham’s contri - In short, union membership provides critical improve - butions to employee pensions at unionised yards were ments in school bus workers’ standards of living in the US

In California, workers at Durham School Services yards are so poorly paid that Durham provides a bus for them to go and shop at the local food bank.

−8− In 2010, Finch’s salary, fees, benefits and bonuses totalled £1,356,000— 173 times Beck’s earnings.

“I support forming our union with the Teamsters so The Workers Versus Dean Finch, CEO we can make changes. Home buses are not a ‘privi - National Express’s chief executive officer, Dean Finch, en - lege’ and we don’t get paid for the things we do, like joys remuneration which appears excessive when com - fueling and having to come in to get fluids checked.” pared with the financial struggle low-wage Durham — Vickie Wylie, Durham driver, Lake Villa, Ill. workers face to make ends meet. National Express’ annual report and accounts for 2010 “Raising standards is something that’s long overdue reveal that Finch’s basic salary of £500,000 was raised by here. We deserve to be treated with the same respect 10 per cent, taking the total value of his earnings for the and benefits that staff employees have. We need year to £1.356 million ($2.17m). Under National Express’ change!” long-term incentive plan, Finch received share awards equivalent to £1 million in value at 2010 prices, which — Rebecca Hand, Durham driver, Jacksonville, Fla. vest in 2013 at no cost. Earlier this year, Finch was awarded a further 489,876 performance and matching “We are professional drivers and attendants. We need shares, vesting again at nil cost in 2014 8. to vote. We can’t be afraid. There’s power in numbers. Finch’s previous counterpart at FirstGroup was Moir We need better pay, benefits and respect. We deserve Lockhead who received £643,000 plus pension benefits in all of this and that’s why I’m voting Teamsters.” 2009-10 for heading a company with turnover of £6.3bn 9 — Ann Kelly, Durham driver, Imeson, Fla. compared to National Express’ £2.16 bn . National Ex - press’ Chairman, John Devaney, received £250,000 for 100 days work, while his counterpart at FirstGroup, Martin Gilbert received £186,000.

Durham Driver Honoured at White House Forum Laguna Beach Employee Lives in Poverty

On 28 March, 2011, family’s house, which was eventually condemned because of Gina Beck, a driver for the presence of asbestos. Durham in Laguna In 2008, Beck answered an advert for a driver’s position Beach, Calif., with Durham School Services that promised great pay, bene - addressed a White fits and health care insurance. Those promises soon fell House forum short. The benefits were few, the health care too expensive commemorating the and Beck’s original daily six-hour shift was cut to four hours. loss of 146 workers’ Unable to pay the rent on her apartment, she moved into a lives in the 1911 Trian - decades-old mobile home parked in a family member’s yard. gle Shirtwaist fire in Beck endured two years with no running water, scorching hot . The temperatures in summer and freezing winters—the worst event also recognised two years of her life. Beck now lives in the back of an office, women, like Beck, who have played outstanding roles in the where a partition wall allows her a better, but hardly ideal, labour movement despite hardships in their lives. living space. The special day at the White House was in complete In the struggle to pay bills, Beck survives by shopping at contrast to a usual work day for Gina, who leaves home at a local food bank, depending on food stamps like many of 3.30 a.m. to drive her precious cargo of children to school. her Durham co-workers. Her lack of health care coverage The special-needs students who Beck drives struggle with means that she cannot afford to go to the casualty depart - profound disabilities and demand extraordinary dedication ment and has no access to medicine, having to borrow an - from drivers like her. Beck ends her day around 6.30 p.m. tibiotics from two other work colleagues. Beck also has no after waiting around for hours at work, unable to afford to go coverage for dental or ophthalmic vision needs. home in between school runs. Despite the hardships as one of America’s working poor, Beck is no stranger to adversity. When her mother died, Beck has no intention of leaving. Beck had to quit high school to look after her three brothers. “I love my kids and you get a special bond with them. I Then the 1987 Whittier earthquake badly damaged the can’t quit now,” she said.

−9− Labour Rights in the US

he Universal Declaration of Human Rights, adopted once they have won the support of a minimum of 30 per by the General Assembly of the United Nations in cent of employees in their bargaining unit. To do so, T1948, states, “Everyone has the right to form and to these employees must sign authorisation cards to show join trade unions for the protection of his interests.” 10 their support for the union. Once more than 30 per cent The US and UK are both bound by this declaration. of workers have signed these cards, the union can then Two further international protocols from the UN’s In - file a petition with the NLRB seeking a government-su - ternational Labour Organisation (ILO) are designed to pervised election. protect employees. These protocols—the ILO Convention In the US, as in the UK, if a union can demonstrate 87, Freedom of Association and Protection of the Right to support of more than 50 per cent of eligible voters, it can Organise of 1948 and the ILO Convention 98, Right to Or - request recognition without an election. However, most ganise and Collective Bargaining of 1949—enable workers unions ultimately hold secret ballots because many em - to form and join trade unions in order to collectively rep - ployers, including National Express, choose not to take resent their interests on matters related to their employ - the opportunity of voluntary recognition. ment. Article 1 of ILO Convention 98 also states, “Workers shall enjoy adequate protection against acts of anti-union US Versus UK Employee Rights discrimination in respect of their employment.” The ability to bargain collectively is especially vital for Among those countries that signed the conventions, US workers because they are much more vulnerable to workers’ rights are enshrined in international law. dismissal than British workers. The US is not a signatory to either ILO convention, British labour law requires all employers to provide claiming that these rights are adequately protected by na - “written particulars” to employees within 13 weeks of tional legislation. But the US is a signatory to the ILO’s starting work—a written statement of pay, conditions and landmark Declaration on Fundamental Principles and entitlements to sick pay, holidays, pensions, rest breaks Rights at Work, 1998. 11 The declaration states: and, crucially, notice and disciplinary procedures. While this statement is not a contract of employment, it is evi - “…all Members, even if they have not ratified the dence of a legal obligation between employee and em - Conventions in question, have an obligation arising ployer, assisting in providing protection to workers from the very fact of membership in the Organisa - against unfair dismissal. tion to respect, promote and realise, in good faith In America, no such requirement exists in labour law. and in accordance with the Constitution, the prin - Instead, most employees are hired “at will.” This means ciples concerning the fundamental rights which are the employer can discharge an employee without notice the subject of those Conventions…” 12 or compensation for any reason whatsoever, irrespective of length of service, except in certain prescribed cases The declaration goes on to refer to these fundamental (such as race discrimination) or except where there is a rights as including freedom of association and the effec - formal contract of employment. For this reason, many tive recognition of the right to collective bargaining. The non-unionised employers frequently avoid offering em - declaration ensures that states which are members of the ployment contracts. Most employees are generally only ILO, but which have not formally ratified the conven - able to obtain legally binding contracts, which outline tions, also have an obligation to respect the rights set out pay and conditions of employment and agreed notice in the conventions. and procedures for dismissal, via union-negotiated col - lective agreements. US Labour Legislation In addition, most US workers do not have state-pro - In the United States, the National Labor Relations Act vided health care and must rely on employer-provided (NLRA) is the primary federal labour law guaranteeing the health care. In non-union companies, including right of freedom of association, the right to bargain collec - Durham, while health care benefits are ostensibly avail - tively and the right of private sector employees to join trade able, in reality the health care coverage is prohibitively unions. expensive. The result is that most workers have no health Overseeing the execution of much of this act is the care coverage. This creates an urgent need for unionisa - National Labor Relations Board (NLRB), an independent tion so that employees may bargain for affordable health agency of the US government which conducts elections care coverage. for labour union representation and investigates and remedies unfair labour practices. US Labour Rights in Practice Under US law, if an employer refuses to recognise a As a signatory to the ILO convention, the UK strongly trade union, employees can instigate an NLRB election upholds the rights of employees to freedom of associa -

−10 − tion, to organise and to collectively bargain. Businesses tional norms and create formidable legal obstacles to the operating within UK jurisdiction must comply with the exercise of freedom of association.” 15 employment laws that enshrine these rights and there is The system that is supposed to protect workers’ rights legal redress for employees and trade unions when em - to freedom of association and collective bargaining is ployers breach these laws. broken and does not serve to protect a fair election In theory, under US federal employment law, employ - process. There are only minimal sanctions for employers ees also have the right to freedom of association, to or - that breach the rules. So businesses operating within the ganise or to bargain collectively and can claim redress or US are often able to deny employees these fundamental protection against anti-union discrimination under the employment rights. National Labour Relations Act. But the practice is very different. The government-supervised secret ballot proce - The Critical Role of Unions in the US dures have offered well-documented opportunities for It is therefore critical that, in the absence of the worth - many anti-union companies to manipulate the process while protection of federal law, employees enjoy protec - and block employee efforts to form a union. It imposes a tion for these rights through other means. timetable that allows the company up to six weeks prior In the US, strong trade unions like the Teamsters have to a ballot, during which anti-union campaigning is com - successfully assisted vulnerable workers who wished to monplace and during which “captive audience” and one- join a union so that they can be protected through a col - on-one meetings have been used to try to persuade lective bargaining agreement. workers into withdrawing support for the union. Responsible businesses operating in the US recognise The Financial Times reported that the government- the rights of employees contained within the ILO conven - supervised secret ballot has “been successfully used to tions and voluntarily act as if these rights are in force in the block union organising efforts by Wal-Mart and other US Trade unions, politicians, NGOs and community groups anti-union US companies.” 13 work hard to encourage businesses in the US to operate Even the United States itself acknowledged in a 1999 within the framework of ILO Conventions 87 and 98, even report that, “There are aspects of this [US labour law] though the federal government has not signed them. system that fail to fully protect the rights to organize and In particular, multinational companies such as First - bargain collectively of all employees in all circumstances.” 14 Group, based in countries that have ratified these conven - A respected labour academic further argues that tions, operate in both their home and overseas markets “Some provisions of US law openly conflict with interna - under these principles. National Express Group does not.

−11 − National Express Group’s Policies in Principle

ational Express Group’s publicly-stated position on National Express falls down in most, if not all, of these human rights, the right to organise and the right to recommendations, either in part or in full. Furthermore, Ncollective bargaining, is unequivocal: it wholeheart - the prospects of the company satisfying such criteria seem edly supports them. Indeed, this approach stems from one distant. Contrary to such actions, National Express’s state - of the company’s five core values—that of caring. The ments in the past indicate little hope of their adoption of company’s public policy states, “Caring—We’re all people. such an approach. When questioned at the company’s Treat everyone as we would want to be treated.” 16 2010 AGM, Finch refused the opportunity to agree to the adoption of a Freedom of Association Policy. 19 Human Rights at National Express National Express expects companies in its supply chain to National Express Policy: Non-Discrimination respect workers’ rights, stating in its human rights policy: Against Union Membership In line with the company's current equal opportunities “We recognise that we have a responsibility to en - policy, discrimination on the grounds of union member - sure that human rights are upheld in our supply ship is forbidden. The policy states, “National Express chain. While our supply chain is generally located in Group is committed to ensuring that all members of staff the countries or regions in which we operate, we will in the Group are treated fairly and are valued irrespective engage with suppliers who source products or mate - of disability, race, gender, sexual orientation, marital sta - rials from at risk countries to promote compliance tus, nationality, religion, employment status, age or with relevant local legislation and the principles of membership or non-membership of a Trade Union.” 20 the Universal Declaration of Human Rights.” 17

It is reasonable to assume that the principles and re - sponsibilities that National Express applies to companies in its supply chain apply equally to the company and its subsidiaries, including the right, embodied in Article 23 of the Universal Declaration of Human Rights, to form and join a trade union. In March 2011, Professor John Ruggie, the Special Rep - resentative of the United Nations Secretary-General, re - leased the final draft of the UN’s Guiding Principles on Business and Human Rights: Implementing the United Na - tions Protect, Respect and Remedy Framework , which seeks to limit the adverse effects of business on human rights. The proposed guidelines call for all business enter - prises to express their commitment to meet human rights responsibility in the workplace via a statement of policy that:

a. Is approved at the most senior level of the business enterprise; The Equal Opportunities Policy goes on to state that, b. Is informed by relevant internal and/or external “Every member of staff at National Express Group has a expertise; personal responsibility to: c. Stipulates the enterprise’s human rights expectations of • Treat people fairly and without prejudice; personnel, business partners and other parties directly linked to its operations, products or services; • Value and respect others; d. Is publicly available and communicated internally and • Ensure that no one is harassed, victimised or bullied in externally to all personnel, business partners and other the workplace; relevant parties; and • Promote a work environment where everyone feels e. Is reflected in operational policies and procedures confident to report incidents that are unfair or person - necessary to embed it throughout the business ally offensive; and enterprise. 18 • Seek to develop their own skills and encourage others.” 21

−12 − National Express Group’s Policies in Principle cont.

National Express’ official view is that trade union ac - Complying with Labour Laws tivity will not prejudice an employee’s work prospects National Express has also stated, in a formal submission and guarantees fairness and freedom from harassment to the British Parliament’s Joint Committee on Human and victimisation. In 2009, the then-CEO of National Rights, on 26 June, 2009, that: Express, Richard Bowker, underlined this view, stating at a shareholder meeting that he “will not tolerate, nor will “National Express has adopted policies to ensure the Board, trampling on workers’ rights.” He added, “Our full compliance with labour laws throughout all of policy is, any employee that wishes to be recognised by a our operations… To date, National Express has trade union, they can.” 22 never been found to have been in material or wide - In a letter dated 20 November, 2009 to C. Thomas spread violation of any provision of the National Keegel, General Secretary-Treasurer of the Teamsters, Na - Labor Relations Act (the United States’ labour laws) tional Express’ Executive Vice-President for Operations or ’s labour laws, nor any of the various em - declared, “National Express respects the rights of employ - ployment Acts in the .” ees to decide whether or not they wish to be represented by a labor union in their relationship with the company. And in September 2010, responding to a letter about Our management approach this matter with integrity and the company’s employment practices from 36 members respect for the employee and his or her rights.” of the US House of Representatives, Finch reaffirmed In 2010, at the company’s annual meeting of share - these principles: holders, Finch was asked whether the company would commit to introducing a freedom of association policy. “Durham School Services has strived, and continues Finch bluntly responded, “I see no need to introduce a to strive, to be in compliance with all US labor law freedom of association policy.” 23 and international human rights standards…If our More recently, Finch, responding to an investor ques - employees decide to join a union, we work with the tion, revealed a continuing reluctance to enter into a union of their choice with the same honesty and meaningful dialogue with the Teamsters, preferring in - high ethical standards that we hope we exemplify in stead to resort to language commonly found in union all of our professional interactions.” avoidance situations. “We respect the rights of our em - ployees to join a union and we also respect the rights of But the reality is that there are strong indications Na - employees not to join a union. We will not be pushed tional Express does not live up to these policies and prin - around or browbeaten into doing anything our employ - ciples in its US operations, as the next section will show. ees do not wish to do,” Finch said. 24 And potential applicants who look at the company’s website are reassured that “Dialogue takes place regularly with the trades unions and other employee representa - tions on a wide range of issues.” 25

−13 − National Express Group’s Policies in Practice

espite the many worthy statements from National • Promises of benefits to employees willing to drop or Express, Durham School Services appears to oper - oppose union organising activities; Date in absolute isolation, and in contradiction to its • Onerous duties for pro-union workers; and parent company’s policies. Evidence of National Express’ anti-union practices is • Discipline or discharge for union activity. abundant. In addition to personal testimony from indi - vidual workers, other bodies and investigations have For example, one Durham worker indicated that a found Durham School Services to be in breach of labour union supporter had been fired without cause just before laws and human rights principles and Durham’s own a union organising election. “A few days before the elec - management materials expressly betray the company’s tion, Durham fired one of our monitors, who was a anti-union stance. union supporter, based on unfounded allegations against In December 2009 a private panel convened at the re - him. There was no proof. No investigation was done and quest of the Teamsters under the title of the National Ex - no witnesses were interviewed,” said Paul Santoro, a press Monitoring Committee. The Commission’s remit driver from Durham’s Rocky Hill yard in Connecticut. was to give its own view of National Express’ employ - As recently as April 2011, Daniel Jauch, Vice President ment practices. The panel comprised Dr. Ruth Milkman, of Operations, wrote to workers in Durham’s Lakewood Professor of Sociology at University of California, Los yard in New Jersey with information about their forth - Angeles and City University of New York; Rev. Frank coming ballot on organising a union. His very first sen - Raines III, a Detroit pastor; and Congressman Rush D. tence betrayed his impartiality on the matter, referring to Holt Jr., a member of the US House of Representatives. the union as a “third party.” He said, “I never thought that I would look forward to April 15, but this year is different Perception of Interference in NLRB Elections because I am hopeful that on April 15 the drivers and aides will have decided that putting a third party into our Dr. Kate Bronfenbrenner, of Cornell University, testified facility is not in anyone’s best interest.” 26 to the National Express Monitoring Commission that an average of four charges per campaign were brought against the company in around 40 per cent of Durham Alleged Violations of Labour Law School Services’ NLRB elections. Concerns put before the Former NLRB General Counsel Fred Feinstein told the commission of Durham’s anti-union activities included commission that in his view, “Extensive violations of allegations of: labor law have been a part of the National Express anti- union campaign.” He cited cases where the company’s • Coercive statements and threats to employees; management or supervisors had been alleged to have:

• Interrogation of employees regarding union support • Changed working conditions to influence the result or involvement in attempts to organise; of a NLRB election; • Surveillance at work;

−14 − National Express Group’s Policies in Practice cont.

• Acted inconsistently in its treatment of workers, dis - formal complaint. The other 17 were withdrawn after an criminating against pro-union employees; adjustment of behaviour or were closed by other meth - • Heightened campaigns against the union in the days ods. Of the remaining charges that did not result in a preceding an election; complaint, the company agreed to comply with an infor - mal settlement in eight cases and agreed to an adjust - • Terminated the contracts of pro-union employees; and ment in 22 cases that were later dismissed or withdrawn. • Refused to recognise the legitimacy of employees’ The remaining charges were either dismissed or settled role as bargaining representatives. without adjustment or are still under investigation. The effect of the settlement of the cases before any is - One worker testified about concerns raised over per - suing of a formal decision by the NLRA may have as - ceived discriminatory practices against union supporters. sisted National Express in being able to state, as it did to “After the election, our manager tried to penalise anyone the UK Parliament’s Joint Committee on Human Rights she thought voted for the union. She penalised our elec - in 2009, that, “To date, National Express has never been tion observer by hiding the keys to his work vehicle and found to have been in material or widespread violation reducing his rate of pay,” said Steve Cofield, a driver at of any provision of the National Labor Relations Act.” Durham’s Tinton Falls, N.J. yard. This statement appears accurate, but clearly needs to Further, it was alleged that Durham regularly held be considered in the wider context outlined above. There captive audience meetings at which selective information can be no question that there are concerns that the com - was presented, painting an unbalanced picture of the pany has regularly contravened the purpose of US labour union. It was stated that employees had been told that the law. The key reason it has not been found to be in viola - union was corrupt, would inevitably lead to strikes and tion is because it has sought informal settlements at the would lead to the loss of benefits and the closure of yards. last minute to avoid any issuance of a formal complaint by the NLRB. “Every week leading up to the election, Durham told us we were having ‘Safety Meetings’ which Concerns over Durham Using the Law to Stop were always anti-union meetings,” said Toni Elections Wollner, a driver from Middletown, N.J. In January 2011, workers in Durham School Services yards in Santa Ana, Laguna Beach and Irvine, Calif. “Durham forced us to attend regular mandatory sought to organise a union. The yards are in close geo - meetings in which the company tried to intimi - graphical proximity and are structurally dealt with by the date us and convince us to vote against the union. human resources department at Durham. In what repre - In one meeting, a regional manager told us our sents a significant upgrade in the company’s anti-union [union] dues would be retroactive and in one efforts, Durham requested that the NLRB rule that the lump sum. This was a complete lie,” said Paul yards should have separate union representation elec - Santoro a driver at Rocky Hill, Conn. tions, which would have made it harder for the workers to organise and easier for the company to attempt to un - “Every week, we were forced to attend anti-union dermine organising at each location. meetings. Among other things, managers told us the Furthermore, when the NLRB upheld the workers’ Teamsters were part of the Mafia, that the only way desire to vote as one unit, 27 Durham, seemingly in the to avoid a strike was to accept Durham’s first offer hope of further delaying the process of organising, without bargaining for our needs, and that we might waited until the very last day to request a legal review of lose wages and benefits in a contract,” Cofield said. the decision. Ultimately, the NLRB refused to allow the review on the grounds that the company had failed to To date, more than 200 unfair labour practice charges raise any substantial issues warranting a review and or - have been filed with the NLRB against Durham School dered the election to proceed on the basis of one unit. 28 Services. The National Express Monitoring Commission stated that, “These are not the kinds of labor practices Anti-Union Management Manual that we would expect to see in an international corpora - In some Durham School Services locations, the company tion aiming to be a responsible corporate citizen.” issued a manual to its management and supervisors ti - Of these cases, the NLRB has so far indicated that it tled, Information Relating to Union Organizing .29 The had intended to issue 61 formal complaints. Of those 61 manual gave in-depth instructions on how to counter complaints, however, 44 cases were informally settled by employee attempts at union organising. Durham School Services before the NLRB had issued the

−15 − National Express Group’s Policies in Practice cont.

School Services must be proactive in educating employ - ees about unions and what unionization really means.” The manual then lists 49 different things that super - visors “can and should do” during a union organising campaign, many of which are anti-union arguments to dissuade employees from supporting the union. It also explains that making derogatory remarks about the union is perfectly legal and acceptable. But workers have raised concerns that managers and supervisors are per - ceived to have done more than simply set out the pros and cons of unionisation.

“[Our managers] talk to us like we are children on Cover of the company-issued, anti-union manual for the bus and sometimes they even yell at us. We managers and supervisors titled Information Relating had strong support for the union… but the com - to Union Organizing. pany campaign scared and confused workers,” said Regina Melton, an employee at Durham’s Kansas City, Mo. yard. The 29-page document gives advice on how best to identify supposed signs that workers may be trying to or - “Those of us actively talking to others about the ganise a union, including: union were often given extra trips and long runs to keep us away from the yard,” Cofield said. • The whispering crowd; • The dispersing crowd; “Almost immediately once we began forming our union, the company posted a notice that prohib - • Employees meeting in out-of-the-way places; ited any discussion about the union. This is illegal • New leaders emerging/new groups getting attention; and we filed an unfair labor practice charge but • New friendships emerging; the impact was to shut us up,” said Toni Wollner, a driver from Middleton, N.J. • Old friendships coming to an end/arguments; • A change in the amount of gossip at work; Anti-Union Propaganda • Questions by employees seeking clarification of In 2010 Durham School Services funded, produced and company policies; distributed a DVD to all employees at its York Central yard in Pennsylvania prior to a postal ballot to determine • Employees developing a “we” identity; whether workers wished to join the Teamsters Union. • Low morale; The DVD included distorted and misleading anti- • Inferior work; and union information. It told workers that the union can force employees to join the union and pay union dues. • Reluctance to work overtime. However, US labour law states that nobody can be forced to join a union under any circumstances. Workers were By looking for such signs, the handbook effectively also told of the inevitability of union strikes, but were not encouraged a culture of suspicion among managers and informed that 99 per cent of all union contracts, includ - supervisors, regardless of whether any of the signs are re - ing Teamster contracts, are settled without a strike. lated to union organising or simply to the shifting dy - In 2010 Durham School Services also issued a calen - namic of interpersonal workplace relations. The manual dar at its Antioch, Ill. location in order to guide supervi - further states, “Remember—early detection will allow sors in their anti-union activities. The company advised Durham School Services a better opportunity to success - them when to distribute anti-union literature and en - fully defeat union organizing efforts.” couraged managers to engage in anti-union activities. In contrast to National Express’ stated support for the Such activities included providing workers with questions freedom of association, the manual indicates clearly that to ask the union and displaying groceries purported to be it is appropriate for supervisors “to communicate the equivalent in value to a month’s worth of union dues. Company’s message and convince the employees that a A Kansas City employee told the commission of other union is not in their best interest or the best interest of ways that the company spread anti-union messages. the Company. To defeat a union everyone at Durham

−16 − National Express Group’s Policies in Practice cont.

“Durham attaches anti-union letters to our [pay] cheques that include all kinds of distorted, scary infor - mation. The message is that a union could compromise our pay cheques,” said employee Regina Melton. The company’s actions to deter union organising have included surveillance on workers’ union organising activities, threatening workers with yard closures if they unionise, disciplining or terminating workers for their union activities and distorting the truth about unions and collective bargaining. This is done in order to create a chilling climate of fear. The precise costs of Durham’s anti-union operations are not disclosed, but Professor John Logan at the School of Management at the School of Economics and Political Science has estimated that anti-union compa - nies in the US have typically spent between $2,000 and $3,000 per employee on such activities. 30

Misdirected Use of Resources All of the transport services that Durham School Services The total cost of the subsidy for all bus operators in provide are contracted to public bodies, making all of the grants, support and fare reimbursements reached over company’s income from the public purse. 31 The US tax - £2.6 billion in 2008. payer is in effect helping to fund the company’s anti- Indeed, National Express’ bus subsidiary in the West union advisors and anti-union materials, as well as the Midlands topped the table for fuel duty rebate in 2009 paid time that its supervisors spend on anti-union activi - with a payment of £23,145,916.52—straight from the ties. Not only is the practice against the stated principles public purse. 32 Such high levels of public subsidies re - of the company and legitimate business goals, but it also quire that National Express operates in a responsible hits the taxpayer and the shareholder. manner as a good corporate citizen rather than running Furthermore, National Express, along with other bus the risk of reputational harm to British industry through operators, receives subsidies from the British taxpayer. its anti-union behaviour.

−17 − Recommendations and Conclusion

his report has raised strong concerns that in the US, commit to a policy of strict neutrality in unioniza - National Express, via its Durham School Services tion campaigns. A transparent, effective and perma - Tsubsidiary, has often violated labour law and work - nent compliance system should be put in place to ers’ rights. This is in stark contrast to the company’s enforce this policy. stated policies and principles. Although differing commercial environments will in - 2. We recommend that National Express publicly state evitably result in differing practices from country to its support for freedom of association in its US oper - country, we believe that National Express workers have a ations, with assurances that attempts to organise a right to be treated fairly and with respect, and within the trade union among employees will be treated with spirit and principles of the employment practices to impartiality and will be free from discrimination or which the company claims to adhere, wherever they are. recriminations. National Express is adopting a less favourable stance towards its US employees than its workers in Britain, al - 3. We recommend that National Express’ shareholders though all workers are covered by the company’s global request a corporate policy that protects workers’ policies on human rights and equal opportunities. Prac - rights wherever the company operates, including the tices in the workplace of managers and supervisors are right to freedom of association and to bargain col - hampering employees from securing the desperately lectively. Further, shareholders should demand pub - needed union representation and protection to which lic disclosure of company money spent on they are entitled. anti-union activities. In order to remedy the issues raised in this report, we make the following recommendations: 4. We recommend that legislators in the UK. and US engage with National Express to influence the com - 1. We recommend that National Express should over - pany to act responsibly and in line with interna - see Durham School Services’ conformity with its tional employment conventions and protocols. own stated policies of respecting workers’ rights, and School districts should not contract with Durham with international human rights standards, allowing unless it can demonstrate its adherence with US its employees to choose union representation freely labour law and international human rights conven - if they so desire, without intimidation and interfer - tions including workers’ freedom of association. ence from the company. National Express should

−18 − References

1 School Bus Fleet News School Transportation 2008-2009 School Year 2 National Express Investor Presentation 7 April, 2011 – North America p.5 3 National Express 2010 Annual Report and Accounts 4 National Express Group Notice of Extraordinary Meeting 2009 p. 20 5 http://www.bls.gov/news.release/union2.htm 6 Interview with David Duke http://mediazone.brighttalk.com/comm/h2glenfern/2a7a8033e4- 24329-4842-26026 7 Teamster survey of Durham School Services yards January/February 2011 8 National Express 2010 Annual Report and Accounts – Directors’ Remuneration Report 9 FirstGroup Annual Report and Accounts 2010 – Directors’ Remuneration Report 10 Article 23 (4), Universal Declaration of Human Rights , United Nations, 10 December, 1948 11 ILO Declaration on Fundamental Principles and Rights at Work , issued 86th Session, Geneva, 19 June 1998 12 1998 Declaration, Preamble, paragraph 2 13 Tesco Faces US Union Challenge , Financial Times, September 18, 2008 14 US Report for the period ending 31 December 1997 under Article 19 of the ILO Constitution on the position of national law and practice in regard to matters dealt with in Conventions 87 and 98, US Department of Labor 15 Compa, Lance, “Unfair Advantage: Workers’ Freedom of Association in the United States under International Human Rights Standards”, Industrial & Labor Relations Review , Vol. 59, Issue 2, 2006, Berkeley Press, p14 16 http://www.nationalexpressgroup.com/nx1/about/ 17 National Express Group Human Rights Policy http://www.nationalexpressgroup.com/nx1/ corporate/policies/human_rights_pol/ 18 www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21- mar-2011.pdf 19 National Express CEO Dean Finch verbal response to shareholder question at 2010 AGM 20 http://www.nationalexpressgroup.com/nx1/corporate/policies/Equal_Opportunities_pol/ 21 http://www.nationalexpressgroup.com/nx1/corporate/policies/Equal_Opportunities_pol/ 22 National Express CEO Richard Bowker verbal statement 2009 AGM 23 National Express CEO Dean Finch verbal response to shareholder question at 2010 AGM 24 NEX Q&A webcast session with investors on the company’s 2010 preliminary financial results, 24 February 2011, http://www.thomson- webcast.net/uk/dispatching/?event_id=e0e6e856baa7aa3ad1910a88d197cbe1&portal_id=6e15cfec 2e2d823dd7bcd41037f9f4e5 25 http://www.nationalexpressgroup.com/nx1/careers/equal/ 26 Letter to Lakeside yard employees from Daniel Jauch, Vice President of Operations, 1 April, 2011. 27 NLRB Case 21-RC-21266 28 NLRB Case 21-RC-21266 Denial of Review 29 Durham School Services “Supervisor/Manager Information Relating To Union Organizing” dated November 2008 30 TUC Publication “US Anti-Union Consultants: A Threat to the Rights of British Workers” Professor John Logan, London School Of Economics and Political Science 31 National Express Investor Presentation 7 April, 2011 – North America p. 5 32 Bus Service Operators Grant list – Travel 30/09/2009

−19 − Notes

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