An issue that nearly caused a national rail strike, Reuters- investors proposed shareholder resolutions at two U.S. railroads calling for paid sick leave for workers, and they could go to an advisory vote at shareholder meetings in the spring.
On Friday President Joe Biden signed legislation to block a rail shutdown that could have a devastating effect on the American economy. The deal he approved did not include paid sick days for workers, a sticking point for unions in contract talks with five major U.S. railroads.
Proposals seen by Reuters by activist investors ask Norfolk Southern Corp and Union Pacific Corp to offer a reasonable amount of paid sick time, determined by company directors. If accepted, each resolution would appear as a ballot item at the railroads' springtime shareholder meetings.
Kate Monahan, a director at Trillium Asset Management, said that more flexible sick time would have broader benefits like reducing workforce turnover.
She said that there was a business case that makes sense for us as investors.
A Union Pacific representative did not comment on the resolution, but referred to a trade group statement that industry employees already receive substantial time and leave for longer-term illnesses.
The resolutions about worker welfare have attracted more support at corporate annual meetings in recent years, as a result of the COVID-19 epidemic. Voting on the resolutions would not be binding.
Railroads worry that implementing paid sick leave would require more employees at a time when many companies have cut their workforces dramatically. In a Nov. 30 investor note from Susquehanna analyst Bascome Majors, sick time was included in federal legislation that would cut U.S. rail earnings by 1.5% to 2%.