European Corporations Abuse the Rights of Working People in America’s Southern States

European corporations are two-faced when it comes to respecting working people’s freedom of association and workers’ rights. Multinational corporations based in Europe have accelerated their foreign direct investment in the Southern states of the United States. Several have interfered with freedom of association, launched aggressive campaigns against employees’ organizing attempts and failed to bargain in good faith when workers choose union representation according to a report from AFL-CIO.


The report uses several case studies to portray how some European corporations have exploited weak labor rights laws in Southern states in the United States, while boasting about having good relationships with trade unions and upholding standards for working people in western European nations. Low wages, low taxes, low levels of union representation and “right to work” laws are magnets for European corporations to relocate jobs to the U.S. South to escape European social standards. It contains several case studies where known European corporations—among them Airbus, Fresenius, Ikea, LSG Sky Chefs, NestléSchnellecke Logistics and Skanska—have used every loophole and opportunity to exploit working people in the states where they intentionally relocated to reduce their labor costs while maximizing their profits. Meanwhile, the report points out, they respect labor laws and freedom of association in their base countries.

Two different scenarios may explain the contradiction between word and deed. In one, top European company management may indeed be hostile to trade unions and would prefer to operate “union free,” but a web of national laws and regulations, effective unions, strong EU directives, social dialogue traditions and other factors in the European labor relations context prevents them from putting their anti-union views into practice.


In the United States, these constraints are lacking or weak. U.S. labor law gives management a free hand to launch aggressive anti-union campaigns when workers try to form unions. And even when employers are found to violate the law, legal delays and weak remedies often let them get away with frustrating workers’ organizing efforts.

Flaws in U.S. labor law and practice are even more acute in the American South than in other regions. Some European companies appear to relish their newfound opportunities to attack trade unions in ways they cannot undertake in Europe, especially in Southern states where they have made substantial investments in recent years.


A second possible explanation for European firms’ double standard is that top company leaders accept the role of trade unions and collective bargaining at home, but they wash their hands and let American managers deal with workers’ organizing and the intricacies of U.S. labor law. This is a failure of due diligence for which firms should be held accountable. In either case, companies are violating international human rights and labor standards to which they have publicly committed themselves.

European workers and trade unions have a stake in the American South, too. Southern state government officials stress low wages, low taxes and low levels of union representation in their appeals to Europe-based multinational firms to invest in the South. This creates a temptation to relocate jobs to the U.S. South to escape European social standards.


A longer-range interest comes into play, too. As European companies become accustomed to Southern U.S.-style anti-unionism, the temptation grows to apply the same blanket strategies and tactics in Southern and Eastern Europe, or even in the heart of the European Union. Such a turn by European firms would make it even easier for U.S.-based companies in Europe to export American management-style violations of workers’ organizing and collective bargaining rights.


Workers’ and trade unions’ interests in Europe and the United States also converge in negotiations now taking place for a trans-Atlantic trade and investment pact, sometimes called TTIP. The United States likely will pressure Europe to accept a trade arrangement promoting weak labor laws, antiunionism, decentralized collective bargaining, low wages, low taxes, privatization, deregulation of health and environmental rules, reduced public services and other features of the U.S. model that are most prominent in the American South.


Unless they are held accountable for their conduct and rectify their behavior, European companies might tell their governments “we like the U.S. system and the way we have profited from these policies, especially in the American South.” European and American workers and their allies must mobilize now to prevent American Southern-style labor practices from taking root in Europe.


IKEA is one of the European companies accused of having double standards

Sources: AFL-CIO and ETUC


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