TESLA MOTORS, INC. | Freedom of Association at TESLA MOTORS, INC.

Status
20.60% votes in favour
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
TSLA
Lead filer
SOC Investment Group
Co-filers
SHARE - Shareholder Association for Research & Education, Folksam, Domini Impact Investments
Resolution ask
Adopt or amend a policy
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Supporting materials
  • Tesla Freedom of Association Exempt Solicitation 2024.pdf Download
Resolved clause
Resolved: Shareholders urge the Board of Directors of Tesla, Inc. shall adopt and disclose a Non-interference Policy (“Policy”) upholding the rights to freedom of association and collective bargaining in its operations, as reflected in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work (“Fundamental Principles”). The Policy should contain a commitment to:
● Non-interference when employees seek to form or join a trade union, and a prohibition against acting to undermine this right or pressure employees not to form or join a trade union;
● Good faith and timely collective bargaining if employees form or join a trade union;
● Uphold the highest standard where national or local law differs from international human rights standards; and
● Define processes to identify, prevent, account for, and remedy practices that violate or are inconsistent with the Policy.
Supporting statement
Supporting Statement: Freedom of association and collective bargaining are fundamental human rights protected by international standards including the Fundamental Principles, United Nation’s Guiding Principles on Business and Human Rights, and the United Nation’s Universal Declaration of Human Rights.

According to the International Labour Organization, “Freedom of association refers to the right of workers ... to create and join organizations of their choice freely and without fear of reprisal or interference.”i

In some localities, the guidance outlined in these principles may be more stringent than national law. The United Nations High Commissioner for Human Rights asserts “…where national laws and regulations offer a level of human rights protection that falls short of internationally recognized human rights standards, enterprises should operate to the higher standard.”ii

Tesla’s policies lack clarity on this point. Tesla’s Business Code of Ethics states that “Tesla is committed to upholding and respecting all internationally recognized human rights,” but Tesla’s Global Human Rights Policy undermines this commitment by stating that Tesla respects labor rights “In conformance with local law,” notably leaving out the commitment to any more stringent international standards. Adopting the Policy will clarify to workers and other stakeholders that Tesla will adhere to the higher standard and avoid any real or perceived conclusion otherwise.

Tesla has been accused of interfering with workers’ rights in recent proceedings before the National Labor Relations Board (“Labor Board”). As of December 2023, the Labor Board has ruled against Tesla in several cases; others are pending.iii In 2021, the Labor Board upheld a ruling that Tesla illegally fired a worker in retaliation for union organizing, and illegally threatened workers regarding unionization.iv In Sweden, Tesla faces an expanding number of solidarity strikes after refusing to sign a collective agreement with mechanics represented by IF Metall.

Such reports represent material reputational and operational risks to Tesla’s shareholders. Workers’ ability to exercise their labor rights can also have positive outcomes for companies and investors. Unionization has been shown to support an equitable and inclusive workplace, decrease turnover, improve health and safety, boost innovation, and strengthen responsible business conduct.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
AkademikerPensionFor
NordeaFor
Kutxabank Gestion SGIIC SAU.For
VidaCaixaFor
AP7For
Rothschild & co Asset ManagementFor
Anima SgrForIn light of the company’s numerous controversies around the topic, and the high profile and increasingly contentious nature of the issue, additional information and clarity regarding the company's freedom of association policies would help shareholders to better evaluate the company's position.

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.