XPO LOGISTICS, INC. | Civil Rights Audit at XPO LOGISTICS, INC.

AGM date
Proposal number
7
Resolution details
Company ticker
XPO
Resolution ask
Conduct due diligence, risk or impact assessment
ESG theme
  • Social
ESG sub-theme
  • Human rights & inequality
Company sector
Industrials
Company HQ country
United States
Resolved clause
The shareholders of XPO Logistics Inc. (XPO), urge the Board of Directors to oversee a third-party audit analyzing the adverse impact of the Company’s policies and practices on the civil rights of company stakeholders, above and beyond legal and regulatory matters, and to provide recommendations for improving the Company’s civil rights impact. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on XPO’s website.
Supporting statement
The racial justice movement together with the disproportionate impacts of the COVID-19 pandemic have focused attention on civil rights and gender and racial equity issues. XPO has responded by including Diversity, Equity, and Inclusion (DEI) metrics in its executive compensation plans and internalizing DEI concerns into its structure. However, the integrity, scope and fulsomeness of these efforts are thrown into doubt by the lengthy list of misclassification lawsuits and regulatory actions against XPO. Misclassification deprives workers of full wages under minimum wage and overtime work laws, leading to ‘wage theft,’ and other critical labor protections. Preventing misclassification is an essential element of any program to advance racial and gender equity, given that women and/or people of color are overrepresented in sectors at risk for misclassification (e.g. see https://www.minnesotalawreview.org/wp-content/uploads/2017/02/Alexander.pdf). California’s port drayage drivers play a vital role in the nation’s supply chains, yet a California statute (SB 338) refers to them as the last American sharecroppers, who suffer from rampant misclassification, which contributes to wage theft and ... a cycle of poverty. They are a largely immigrant workforce, particularly vulnerable to exploitation and often fearful to report violations to state agencies or unaware of their rights, depriving them of access to critical safety net benefits by virtue of their misclassification. These drivers have also been found to be overwhelmingly Latino (e.g. see https://www.researchgate.net/publication/240628100_ A_Study_of_Drayage_at_ the_ Ports_of_Los_Angeles_and_Long_Beach). According to SB 338 there could be 16,000 misclassified drivers in California’s ports, which process 40% of all shipping containers entering the country. Critically, misclassification is a material risk for XPO. Last October, for instance, XPO agreed to pay nearly 800 drivers almost $30 million to settle class action lawsuits concerning its Californian intermodal drayage operations, which alleged the drivers were willfully misclassified as independent contractors rather than employees (see https://landline.media/xpo-settles-pair-of-port- driver-lawsuits-for-nearly-30-million/). XPO’s fiscal 2020 10-K acknowledges numerous lawsuits over misclassification issues that could involve thousands of claimants and significant potential damages and litigation costs. Whatever else XPO’s DEI program aims to achieve, ending wage theft from vulnerable populations of XPO’s workforce is surely central. Management’s seeming disregard to the plight of misclassified drivers – despite numerous legal and regulatory actions—demands a third-party undertake a root-and-branch civil rights audit.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Sandbar Asset Management LLP For