Saturday, 23 July 2016

Sports Direct: investors now have to act or lose legitimacy

About a year ago, the group I'm involved in - Trade Union Share Owners (TUSO) - wrote out to major Sports Direct shareholders calling on them to challenge the company. Specifically we recommended that other shareholders join TUSO in signalling concerns about both corporate governance and workplace practices by voting against the chairman.

The background to this was that numerous cases of poor treatment of workers had been exposed by Unite whilst at the same time investors were concerned by various long-standing corporate governance issues. These issues were brought together vividly when Keith Hellawell gave evidence to the Scottish Affairs committee and admitted he had been in the dark about the collapse of Sports Direct subsidiary USC.

TUSO held a briefing for investors on precarious work last summer, at which Sports Direct had been featured as an example. Many large shareholders who were/are major Sports Direct investors attended. It is fair to say, then, that investors have been told the inside story about this company directly.

At the September AGM abut a third of the non-Ashley vote went against Keith Hellawell. In a normal company that would be getting close to fatal, but this is Sports Direct we're talking about. But perhaps what was more surprising was that two thirds of independent shareholders apparently thought Hellawell was doing a good job.

What's more, one of the company's major investors told the Telegraph (anonymously) that unions were basically thick and didn't get capitalism, that Sports Direct wasn't doing anything wrong, that corporate governance reforms were a waste of time, and that the board were under-paid. No, I'm not joking -

“Unions and capitalism are not a natural fit but it is important to remember that Sport Direct has not broken any laws... If you look at those companies who have impeccable corporate governance and have ticked all the boxes, they are also those who are the most cumbersome... Mike Ashley is a ferociously effective entrepreneur who, as a major shareholder, is aligned with the success of the company. You can chastise Sports Direct for all of its quirks but if you compare the board’s remuneration and its share performance to other listed companies, then Sports Direct’s team is under-remunerated.”

This was in September 2015, when Sports Direct was a FTSE100 company and its shares were worth about £8.

Not even a year later and the picture is very different. Sports Direct shares closed on Friday at £2.57 a pop, about a third of where they were at when Mr "unions are too thick to understand capitalism" was mouthing off in the Telegraph. The company is now in the FTSE250. Mike Ashley admitted in front of the BIS committee that the company had broken the law by paying less than the minimum wage in some cases, and an HMRC investigation is ongoing. Chief exec Dave Forsey is subject to an investigation into the collapse of USC. Sports Direct has been repeatedly in the news because of the continuing exposure of inhumane treatment of workers at its Shirebrook site. Unite's excellent campaigning has drawn the veil from the reality of precarious work in Britain in the 21st century, and it looks ugly.

This week the BIS committee reported on Sports Direct and knocked lumps out of it:

"Whistleblowers, parts of the media and a trade union shone a light on work practices at Sports Direct and what they revealed was extremely disturbing. The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable High Street retailer. For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct and Mike Ashley, as the face of Sports Direct, must be held accountable for these failings."    

The BIS committee report says Sports Direct needs to have an independent review of its corporate governance alongside making significant changes to its workplace practices.

Corporate governance is there to ensure that in running companies, boards balance the interests of the many different stakeholders, including the employees and workers. In a well-run company, widespread evidence of poor working practices would be detected at an early stage, reported to the board and properly addressed. This did not happen. We recommend that Mr Ashley should complement his working practices review with an independent review of his corporate governance arrangements. We believe that such a review would improve the running, and hence performance of his company, as well improving the reputation of Sports Direct amongst stakeholders and investors. (Paragraph 74)

There is no way any major shareholder in Sports Direct can have missed any of this, not even those that think unions don't understand the maverick entrepreneurial genius of turning £8 shares into £2.57 ones that Mike Ashley brings to the party.

Sports Direct's AGM takes place on 7th September, about 6 weeks away. Shareholders have various way that they can hold the board accountable, and make sure that the company fundamentally overhauls how it treats its staff, and its corporate governance. This company is the poster boy of poor practice, and it has cost asset managers' clients a lot of money to leave these problems unaddressed. Therefore it is vital that investors act, and are seen to do so.

Shareholders have been granted ever greater powers in the UK in order to enable them to facilitate effective oversight of companies. They have been repeatedly encouraged by governments of various stripes to actively engage with companies, particularly when performance is weak and there are practical steps investors could take to seek to address this. There is no better target than Sports Direct.

So investors really need to act quickly, to do so with real intent, and to do it in a way where there is a very clear signal to both the board and to Sports Direct workers that enough is enough and that real change is needed.

Otherwise we may have to count this as your sixth strike.    

Wednesday, 20 July 2016

The slow-moving car crash

Executive pay is like a slow-moving version of MPs’ expenses car crash, but without the degree of self-awareness shown by politicians (who do face a meaningful threat of removal from office). Each year the same headlines, each year the same justifications, each year a bit more legitimacy lost. This may continue for years to come, in the way that a car with flat tyres can keep driving on its rims. But you have to choose to not listen to not to hear the screeching. And it really takes a highly-educated mind to conclude that politicians are somehow turning executive pay into a political issue, rather than reacting to problem that won’t go away.

As the newly-installed leader of a Conservative majority government, Theresa May’s intervention on executive pay shows that a third flavour of political administration (previously Labour, then the Tory-Lib Dem coalition) is going to have a crack at the problem. Politicians are not uniquely attracted to executive pay as an issue, they are responding to the prevailing view that the business elite is out of touch, with executives enriching themselves and paying little attention to the needs of others in society.    

Despite this, some people apparently think the obvious response is to indulge in another round of what we have tried before. Leave it to the shareholders, they say, it’s their money, and they have an incentive to act if need be. I won’t beat about the bush: I think this stance is both idiotic and emblematic of a deeper problem in corporate governance and responsible investment.

Let’s look at how we got here. We have left it to the shareholders. And lots of otherwise clever people in the business of managing capital have long contended that we are wrong to get annoyed by executive pay, and that it’s a small cost in exchange for the large benefit of executive talent. They have offered instead the technical fix of performance-related pay. “What matters is structure, not scale,” they have told us each time anger has threatened to boil over.

We have been through several rounds of technical fixes, each of which has decided that the political problem of high executive pay is best solved by giving asset managers more information, and more power to shape it as they see fit. The result has been repeated attempts to redesign performance-related pay, with no real downwards pressure on scale.

Provided with the tools to challenge companies in the shape of increased shareholder voting powers, asset managers have used them to give the large majority of executives and their pay packages overwhelming support. Judged by this metric, the only one that really counts, the picture is clear: the public thinks there is a big problem with executive pay, asset managers largely don’t. There is an enormous gap between beneficiaries and those that manage their capital.

Even the small steps that some shareholders have taken to address executive pay seem utterly feeble to most people. One personal experience illustrates the problem. I did a radio interview during the so-called shareholder spring of 2012 where I explained we were advising shareholders oppose a particular executive pay policy, on the basis that it was excessive. An old mate of mine heard the interview and texted me to say “people actually pay you to tell them that?” Fair point.

Yet to articulate what ordinary members of the public think about executive pay is to invite criticism that this isn’t the “smart” response, and that the issue is becoming “political” (as if the distribution of rewards hasn’t always been a fundamentally political issue). Rather than directly address the repeatedly expressed view that executives are simply paid too much, most investors and their advisers seem far more comfortable re-interpreting this anger as a need for more “performance linkage”.

For example, one of the recent “big ideas” in responsible investment is to tie executive pay to ESG metrics. Aside from the questionable effectiveness of this approach, given evidence that monetary rewards can crowd out other motivations, to a less “informed” person it could look a bit like executives needing to be paid more to behave well. Similarly we are regularly told that if we want asset managers to devote more attention to ESG issues we have to pay for it. To which I might reply: “People actually have to pay you to use their own money in their interests?”

The blind adherence to the 1990s vintage Anglo-American corporate governance model is striking. When Theresa May puts forward a vague commitment to employee representation on company boards - something in place across numerous European countries - the immediate response of one asset manager was to write to the FT to say shareholders will resent it. At any stage are the views of beneficiaries, some of whom presumably could end up as employee representatives on boards, ever considered? I doubt the idea that beneficiaries might have views, which might even have validity, is given a second thought.

A regularly heard refrain is the need to “keep politics out of it”, whether it’s executive pay, investment decision-making, engagement priorities or pension fund governance. The clear preference is for technocrats to determine what gets done, and how. Keep out the views of the ordinary punter, and the politicians, the professional intermediaries know best. Rarely is there recognition that everyone (even professional intermediaries) has biases and conflicts, shaped by their own position in society, by their class, their culture and wealth. What may look value-free and apolitical to intermediaries looks laden with assumptions from the outside. Yet it's the views of the intermediaries that carry the day. Incredibly, often they won't even tell you what they are saying to companies (or employers, as most beneficiaries experience them) on your behalf.

The result is that our investing institutions have drifted dangerously far from their beneficiaries, and that many within the system are compounding the problem by assuming public concerns are ill informed and unjustified. Somewhere along the line, the power that comes from the capital that working people have generated over decades has been usurped and used as others see fit.

We have a situation now where well-paid intermediaries, whose only power comes from other people’s money, jet around the world to deliver sermons to an echo chamber of their peers who reinforce their own values. Largely disconnected from those they notionally serve, intermediaries impose their values, their beliefs and their priorities using someone else’s capital. It is the liberalism of the wealthy, and socially and geographically mobile. Look in the mirror: it is the politics of the elite.

Responsible investment does not escape this. ESG events are dominated by sustainability, typically showcasing the numerous investor initiatives addressing climate change. Yet you would struggle to find a single topic at most of them that a beneficiary would consider to be really focused on their interests, either as a saver or in their working life. If you are a lower or middle income worker in a developed country, you are most likely to feature in asset management analysis as a cost, particularly if you have a defined benefit pension. You don't really matter as far as most shareholder engagement is concerned, even though it's your money they are using.

There is an old slogan: if you’re not part of the solution you are part of the problem. So let’s spell it out: if you are voting in favour of companies where executive reward is rising more than that for the workforce as a whole, you are part of the problem. If you fail to support (or even oppose) efforts to improve the pay and conditions of the working people whose money you manage, you are part of the problem. If you oppose attempts to find other ways to tackle the pay gap through other governance models, you are part of the problem. If you want to limit or remove beneficiary involvement in the management and utilisation of their own capital, you are part of the problem.

I have little doubt that the current model, reinforced by unreflective behaviour by investing institutions, can trundle along on its rims for a while yet. Similarly I expect calls for a change in direction to be met in part by claims of special pleading by vested interests. But so what? If you stand back and look at the mess that is executive pay, and cannot see both the legitimacy of public anger and the utter failure of shareholders to make meaningful change, then perhaps further dialogue is pointless.

All I would say is look at current events. You can repeatedly tell people they are stupid, ill informed and harming their own interests to choose a certain path. You can show them the evidence that big corporates and 'serious' figures from industry share your view. You can tell them how lucky they are with the status quo, and that they risk chucking it all away. But if they think you are in it for yourself, that you think they’re thick, that you never listen to them when they try and raise their voice, but most of all that if what you are telling them doesn’t match their own experience, then one day they will kick you in the bollocks.    

Wednesday, 13 July 2016

Worker directors: some initial responses

So, just a day in and already we can see some are already unhappy with the prospect of workers being represented on the boards of companies. There is a letter from an asset manager in the FT here specifically on worker directors, and a response from the ICSA here which looks more broadly at corp gov but also talks about it.

A lot of people in UK corporate governance have (inevitably) a very UK-focused view of this subject, and may be unaware of other systems, so here are a few quick points that I think are worth making to inform the debate that is likely forthcoming.

First, worker representation on boards is not the same as German co-determination. There are various models out there - it is in place in many more countries in Europe than just Germany - and the UK might not necessarily follow the German approach.

Second, the introduction of worker directors doesn't necessarily mean that shareholders don't get a say on board composition, it depends on the system. You may well already be exercising such a say. If you are an investor that holds FirstGroup shares, for example, have a look at how you voted on the election of Mick Barker.

Thirdly, there is no inherent reason why worker directors cannot perform their role in line with directors' duties just as well as anyone else. The same argument was made in the past in pension fund governance that member trustees would be too conflicted. In practice they are clearly able to do the job and what is surprising is the rarity of conflict.

Fourth, there is no divine right of shareholders alone to exercise control of companies. Shareholders do not own companies despite the widespread belief that they do. I say this as someone who previously accepted the assertion that shareholding = ownership. It's not true in law, and the watery shape of "ownership" that does exist - shareholder control rights - is undermined by the poor use of those rights in practice. As I blogged before, it's not like shareholders haven't been given the tools, but they have chosen to not use them very often. Perhaps if those rights had been used more effectively, or with some sense of public responsibility, then politicians wouldn't be looking at bringing other voices into corporate governance.

Monday, 11 July 2016

Enter, stage right: Workers on boards

“I want to see changes in the way that big business is governed. The people who run big businesses are supposed to be accountable to outsiders, to non-executive directors, who are supposed to ask the difficult questions, think about the long term and defend the interests of shareholders. In practice, they are drawn from the same narrow social and professional circles as the executive team and – as we have seen time and time again – the scrutiny they provide is just not good enough. So if I’m prime minister, we’re going to change that system – and we’re going to have not just consumers represented on company boards, but workers as well.”
So there we go, the incoming Conservative Prime Minister has committed to having workers represented on company boards. As always, these high level statements leave a lot of unanswered questions. By "represented" do we mean the workers themselves are on the board or someone else speaks for them? By "on company boards" do we mean as directors, equivalent to non-executives, or something different? How are these people appointed? Do these policies imply changes in company law?
Nonetheless, this does represent a public commitment to a shift in corporate governance in the UK that it will be hard for the incoming PM to row back from. We need to see the precise details before saying this is unequivocally A Good Thing. But it has certainly set the cat amongst the pigeons, and is definitely a notch to the Left of some of the baby steps Labour "moderates" have advocated. Even the IoD has backed the idea.
May's other proposals are pretty much same old same old - a binding vote for shareholders on exec policy every year rather than every three (which was the original idea before some in the asset management industry lobbied for a triennial vote) and on specific aspects of pay (again part of the last exec pay consultation by BIS undertaken under the Coalition). I also read she proposed pay ratio disclosure - once more an idea consulted on under the Coalition but dropped (and opposed by the asset management lobby if I remember right).
I am going to enjoy the rare privilege of saying I Told You So. I think the direction of policy around corporate governance in general and executive pay in particular has been pretty obvious for the last few years. We had kind of reached the end of the road for the 1990s vintage version of greater disclosure and increased shareholder powers. I mean this in two senses. First, there wasn't a lot more to be done - hence the main thing May has proposed in terms of shareholder powers is increasing the frequency of binding vote, and the disclosure of pay ratios would build on already enhanced disclosure. But second, despite the provision of more powers and more information, and repeated prods from governments and regulators, asset managers have shown themselves to be a pretty weak force for pay restraint.
As I've argued before, giving shareholders prime responsibility for executive pay simply makes it likely that pay will be shaped in a way that asset managers think is reasonable, if they are motivated to engage at all. Asset managers have largely said structure (performance linkage etc) is important, not scale. This may or not be reasonable (I think not, given that the power they have derives from other people's money) but it certainly isn't in line with where the public is at.
This was always going to end badly. Otherwise smart people repeatedly said there's no sense in getting upsetting about the huge and growing rewards for a handful at the top because a) the amounts were small compared to overall company expenditure b) it was performance linked and c) shareholders gained from the "talent". This approach always misunderstood where other people were at, and that they might have different ideas. For a while it looked smart to make shareholders have responsibility for executive pay, and to promote policy to facilitate this, but the danger has always been that if shareholders didn't act this could pull the rug from under shareholder primacy itself. 
I know this is just lefty nonsense coming from me, so it's worth reading someone from the world of finance make a lot of the same points here
The UK’s big shareholders and the big boardrooms they are supposed to keep an eye on for us have had endless chances to have a go at fixing the pay problem themselves. They haven’t done it. Now the problem so bad that it looks as if a Tory government is going to have a go at fixing it for them. That’s a political shift that marks a major financial industry failure. And rather a shameful one at that.
Of course, May could still backtrack, maybe by consulting on these ideas and then ditching them when there is pushback. But even a consultation could be politically damaging is it sees some of those with a vested interest arguing against a fairly significant shake-up. I'm not sure the CBI will be putting a joint response in with the Investment Association again saying there isn't really a problem with exec pay, for example. And by opening up this argument, May is only going to take flak for caving into the donors if there is significant backsliding.
I blogged a while back about the need for Labour to set out something thorough in the area of corporate governance and company law reform. It's clear that this now needs to be done rapidly, and radically. The 1990s is over. It's time the Left started setting out a vision of corporate governance in the 21st Century.    

Monday, 20 June 2016

Inequality, human capital and investors

I've blogged before about the obvious weakness on the S in ESG. I'm someone who has come to responsible investment with a labour movement background and I have been frequently disappointed by how little attention labour issues get.

It isn't like these issues aren't in the public domain. Economic inequality - both within firms and across countries - has become the focus of renewed policy interest. Perhaps most significant is that the economic argument has shifted towards the position that inequality can be drag on economic performance. And, I will repeat forever, increased inequality correlates with declining union density and collective bargaining.

Yet it has seemed that the RI community is far more comfortable talking about corporate governance or climate change than the people outside the boardroom who create value for companies and their investors, and how they are treated and paid. This seems odd, given the emphasis on 'materiality' in RI, since employee engagement and productivity must surely be important to pretty much all businesses, regardless of sector.

Finally, however, things have started to shift. In the past few months I've seen several reports that look at the issue of inequality from an investment perspective. This is being looked at both in terms of inequality at the level of the economy - in response to evidence that inequality may be a drag on performance - and at the level at the firm. For example, MSCI published a paper looking at pay gaps within firms, and found that larger pay gaps were correlated with poorer performance. And a research paper from Kepler Cheuvreux that came out earlier this year takes a very thorough look at inequality and sketches out an engagement approach.

In the field of executive pay, we finally seem to be leaving behind the damaging idea that what really matters is structure, not scale. First, there has been an intellectual shift against extensive performance-related pay - some think it's flawed on behavioural grounds, others think it creates too much complexity, or a bit of both. So there is a lack of appetite for yet another round of structural reform. Secondly, the issue of scale is now a topic of polite corporate governance conversation. We are seeing cases where pay policies that are "structurally sound" but are felt to pay out too much money being challenged.

And finally, human capital management (hate the phrase, but investors seem to like it) has also started to gain greater attention. Both the Investment Association and the PLSA have projects that look at this in one way or another. There are at least two other initiatives I am aware of underway.

This stuff doesn't go as far as many of us would like, and it is often argued in ways that make us a bit uncomfortable, but the fact that research and activity of this type is taking place is a step forward. None of this will necessarily go anywhere, that depends on what use we make of the opportunities, but it does feel like there is acknowledgement of the importance of actual human beings, finally.

Thinking positively, I remember when the IIGCC was set up and, before that, when USS commissioned a report from Mark Mansley on climate change as an issue for investors. Back then, these things felt like they were on the periphery. Now climate change is taken seriously by a wide range of financial institutions, and even conservative houses back shareholder resolutions on the topic.

Perhaps a concerted effort to raise awareness of the importance of the people that actually work for the businesses that our capital is invested in can achieve something similar. Here's hoping.

Friday, 27 May 2016

Santa Rosa snippet

Before last year's AGM, National Express sent a report to shareholders attempting to rebut criticisms of the company made by two MPs in a report by the Trade Union Group of MPs. Notably this included a full-throated defence of the company's choice to refuse to accept the election result in Santa Rosa.

Here are a couple of extracts (my highlights):
  1. National Express has challenged the election process in Santa Rosa. The “technicality” referred to in the Trade Union Group’s report was the removal of the ballot box from the voting booth and it being taken outside to a car. We believe we have no other choice but to challenge the election process when we believe such a significant violation occurs... we believe such a fundamental breach of electoral practice cannot go un-challenged. 
Now compare that with what that US Court of Appeals said, some relevant extracts:
Petitioner’s second objection borders on frivolous... 
The Regional Director found that Petitioner [the company] did not allege that any unauthorized ballots were cast. Nor was there evidence that the Board Agent’s conduct in any way affected the election’s outcome. Petitioner does not dispute these findings...  
An objecting party is not entitled to a hearing merely by imagining fanciful acts of misconduct that find no support in the evidence. Rather, an objecting party must offer concrete evidence that is sufficient to give reasonable cause for concern and thus justify a hearing... In this case, Petitioner points to nothing in the record to support a claim that the Board Agent engaged in any conduct that might have tainted the election proceeding... 

So National Express told its shareholders that there had been a "significant violation" and "fundamental breach of electoral practice" in Santa Rosa. Yet the NLRB found and the Court of Appeals agreed that the company presented no evidence to show anything had happened to justify overturning the election. The company in turn did not challenge this (!) but argued that it should have been allowed a hearing anyway, because of what could have happened, even though it could not show anything did happen (because it didn't!).
And this farce has been defended by the board at the past two AGMs at least.

Wednesday, 18 May 2016

National Express hits the buffers in Santa Rosa

Last week, I went to my fourth National Express AGM, and the second since I joined the ITF. I have to say this is a company that I view with increasing exasperation and I know colleagues both within the labour movement and the responsible investment field feel the same way.

I want to focus in on one case because I think it is is illustrative of the problem. In February 2013 Durham School Services workers in Santa Rosa, Florida voted in election covering a little over 200 people for representation by the Teamsters. The result was about 60:40 in the union's favour so not even close (this isn't "hanging chad" territory). Yet more than 3 years later the company still refuses to bargain with the union.

The company has thrown up various legal objections with relation to the election result in 2013. Despite having lost at every stage the company continues to appeal, most recently to the US Court of Appeals in March. During this process it has used two law firms, and obviously has expended company funds in three years' worth of legal fees.

The company's defence of its record in general is that in any business there will be one or two bad cases, but this isn't indicative of the company as a whole. In the Santa Rosa case in particular there are a couple of points that board members repeat over and over -
  • We have offered to the union to re-run the election
  • The way the ballot box was handled during this election is an important point of principle
I think both of these points have pretty large flaws.

To take the first one, the National Labor Relations Board (NLRB) certified the election result as valid. It has reviewed the company's objections and rejected them. Why on earth should the union agree to re-run an election that the government agency responsible for labour law says was valid and which was won by a clear majority? The question should be why, if the company really does "respect" workers' right to form a union, doesn't it simply accept the clear result of the election? It could have done this at any point in the last three years, but has chosen instead to drag the case through the legal system.

The second point is more interesting. Anyone who attended last year' AGM would have felt that there was a very serious issue with the ballot box. I know some people were left under the impression that a union member had moved (or even stolen) the ballot box. At last week's AGM it was again suggested that the primary reason for continuing to contest the election result related to the ballot box.

Again, this is challengeable. First up, it's important to make clear that the company's objections relating to the ballot box are aimed at the conduct of the NLRB agent who ran the election, not the union or its members.

More importantly, the ballot box issue was just one of several objections raised by the company and and pushed by the two law firms that have fought this case on its behalf over the three years since the workers voted for the union. For example, the company also objected that the NLRB should not have run the election in the first place because the Board itself was inquorate. This argument was an important part of its legal position until as late as February this year, when it was dropped as the point was knocked back in a case involving a different company. Separately the company objected to the use of a photo of an employee on an election leaflet. This was even though the employee had signed a form giving the union consent to use it.

In practice, if you look at the company's legal submission to the Court of Appeals last year (this is using law firm Constagy Brooks Smith, which incidentally advertises "union avoidance campaigns" as part of their services), even then the weight put on the ballot box issue was far less than the flyer. Count the pages dedicated to each point for yourself, See Reply Brief to Court of Appeals here.

And if you want to see how much weight is attached to the ballot box issue this year I would recommend listening to the audio of the hearing in front of the Court of Appeals in March 2016 (at this point Durham is represented by a second law firm, Seyfarth Shaw). You can find it at the link below and click on the audio file next to Durham School Services LP v. NLRB.

The words "ballot box" are never spoken. If this really was the killer issue in Santa Rosa as the board has suggested then I'm surprised that the law firm they are paying to fight the election result didn't even mention it in the short window of time available with the Court of Appeals. (In reality the company's main argument against the NLRB seems to be a process point, but leaning heavily on the flyer issue)

In light of all this I really struggle to accept the board's presentation of Santa Rosa as being all about the ballot box, though it no doubt sounds better in public than arguing about quorums. It's also troubling that people apparently don't really know what is being argued in this case after three years, and it being raised publicly at AGMs. In addition, as should be pretty clear, the company's fire has been overwhelmingly aimed in this case at the NLRB itself, not union members or the Teamsters. This makes the company's "offer" to the union to re-run the election even more ludicrous.

You don't have to just take my word for it. Yesterday National Express/Durham lost at the Court of Appeals. In the decision (I have a copy if anyone is interested) the argument relating to the ballot box is completely demolished, and is described as bordering on frivolous. It concludes there was "nothing in the record to support a claim that the Board Agent engaged in any conduct that might have tainted the election proceeding" and that the company "raised no reasonable concerns regarding the propriety of the election". The company, in other words, got spanked on this point.

I hope the company learns from this, though experience to date makes me sceptical. More importantly I hope that the workers in Santa Rosa get justice, and the union representation they clearly voted for over three years ago.