Complaint against PepsiCo International for violations of ...

1 1 Complaint against PepsiCo International for violations of the OECDG uidelines for Multinational EnterprisesThe International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco andAllied Workers' Associations (IUF) is an International trade union federation composedof 348 affiliated organisations in 127 countries representing a combined membership ofover 2,7 million. The IUF, jointly with its Polish affiliate Food Secretariat of NSZZ Solidarno , hereby lodges a formal Complaint against PepsiCo International , mothercompany of PepsiCo Poland and Frito-Lay Poland Ltd for violations of the OECDM ultinational Guidelines with specific reference to its provisions on "Employment andIndustrial Relations" (Chapter IV). 1 Frito-Lay operations in Poland and PepsiCo headquarters in the USThe facts we refer to have taken place at the Frito-Lay Poland Ltd. snack foods plant inGrodzisk Mazowiecki near Warsaw (ul.)

2 Zachodnia 1, 05-825 Grodzisk Mazowiecki, tel. 022670 7610, fax 022 670 7625), a company of PepsiCo International . The headquarters of Frito-Lay Poland Ltd. are located in Warsaw (ul. Zamoyskiego 24/26, 03-801 Warszawa, tel. 022670 7070, fax 022 670 7261). The plant employs 400 workers (100 male and 300 femaleworkers) of which 171 were members of NSZZ "Solidarnosc" as of 30 September IUF repeatedly wrote and appealed to PepsiCo Chairman and CEO Steven Reinemundand sent individual letters to Board of Directors members to inform them and request theirgood offices and intervention to lead the dispute to a resolution but obtaining eitherstandardised replies or no International headquarters are located in New York (700 Anderson Hill RoadPurchase, NY 10577, 914 253-2000) while Frito-Lay's are in Plano, Texas (7701 LegacyDrive, Plano, TX 75024, 972 334-7000).

3 PepsiCo 's Boards of Directors can be contacted at the following address and telephone number: PepsiCo Board of Directors, PepsiCo , Inc. 700 Anderson Hill Road Purchase, NY 10577, 866 seeking dialogue with Frito-Lay Poland management for the negotiation of a fairsettlement to the referred violations negotiations which were refused or conditioned onunacceptable terms by the company NSZZ Solidarnosc has been in touch with Frito-LayPoland management. Specifically, the union had contacts with (a) Glafkos Persianis, Presidentof the Board of Frito-Lay Poland and (b) Katarzyna Tomczyk, Personnel Manager, Frito-LayPoland. 2. General background and summary descriptions of the violations of the OECDMNE Guidelines committed by Frito-Lay Poland Ltd. at the Grodzisk violations we refer to represent serious cases of: ( ) discrimination at work in theform of sexual harassment and unfair dismissal of eight women workers.

4 And ( ) denial of the rights of freedom of association and collective bargaining through the illegal firing of theunion chairman and repeated attempts to destroy union membership at the Sexual harassment and unfair dismissal of eight women workers Summary description of the caseIn December 2004, eight women workers and union members (Beata Klimkiewicz, Gra ynaCegli ska, Dorota Ha as, Maria Mamul, Marzena Przybylska, Elzbieta Rzek , BarbaraWydzy ska and Alexandra Zar bska), all of them victims of or witnesses to sexualharassment over two years by a night shift supervisor at the plant, were forced to resignwithout previous notice and official justification under a threat of disciplinary dismissal. Inthe presence of the human resource manager they were asked to sign a letter of voluntaryresignation which would entitle them to 9000 PLN (corresponding to 3-4 monthly salaries,significantly more than the legal requirement) severance pay.

5 Had they not signed theresignation letter, they would have been subject to disciplinary dismissal, which makes itvirtually impossible for them to find other employment. No official reason was given for thedismissals at that stage. Two of the seven women refused to sign the letter of voluntary resignation. All eight women were requested to leave the facility immediately afterwards and were not allowed to talk toany other worker at the factory. The NSZZ "Solidarnosc" chairman at the plant, S awomirZagrajek, had his weekly day off on the same day. The forced dismissals were clearlyintended to punish and silence the women who reported the abuses - and to intimidate otherpossible victims and witnesses. Mr. Zagrajek immediately intervened at plant level requesting a meeting with localmanagement to demand the reinstatement of the women and the opening of a serious management refused to discuss the matter he referred the issue to the regional office ofSolidarno in Warsaw, which tried to raise the issue at the level of PepsiCo nationalheadquarters.

6 In an inconclusive meeting between Solidarno representatives and PepsiCo 'sPoland management that took place on 7 January 2005, the company rejected the unionrequests for a fair and unbiased procedure and for the reinstatement of the unfairly dismissedwomen. Despite repeated requests by the NSZZ Solidarnosc and by the IUF for the reinstatement ofthe women while their Criminal and Labour Court cases are ongoing, the plant managementhas refused to reinstate the women at their jobs and provide compensation for lost income. Asa result of this refusal, the eight dismissed women and their families have faced enormousfinancial hardship and psychological stress in a situation of high unemployment and limitedreemployment prospects. Management has also repeatedly rejected demands for a transparentinvestigation of the harassment The company's response to the sexual harassment caseThe company's reaction to date has been to fire the victims rather than investigate thesupervisor's alleged misconduct.

7 On 7 January 2005, during the meeting between NSZZ "Solidarnosc" representatives andFrito-Lay Poland management, the union presented the alleged charges, hoping by means ofnegotiation to persuade the company to honour its responsibilities, investigate the charges andreinstate the women. PepsiCo management refused the request but accepted to investigate the3charges. The investigation consisted in hiring a psychologist who had individual talks with allworkers at the Frito-Lay plant except for the victims and witnesses of sexual harassment. The company has been providing professional legal assistance to the accused in prison, he continues to receive his salary from the company, which also provideshim with expensive legal counselling for his defence. The human resource manager whocooperated with the supervisor in the unfair dismissal of the eight women is charged withviolation of the Polish Labour Code was suspended but is still employed at the plant in thesame position.

8 The unfairly dismissed women, however, have not received so far anyfinancial or legal assistance neither from the company nor from any public institution orsocial security system. Eighteen months later, they have neither been reinstated at their jobsnor received any compensation. PepsiCo 's Worldwide Code of Conduct commits itself to "providing a workplace free from allforms of discrimination, including sexual and other forms of harassment (Section 4). Thecompany also commits itself to protecting the rights of those individuals who report violations against retaliation and to reviewing any such report in a prompt manner and takingremedial action where appropriate (Section 14). The PepsiCo Code is available in Polish onthe company To the IUF demand of clarification on the transparency and effectiveness of its sexualharassment policy, PepsiCo replied on 27 January, 2006 with a standard letter that they "havemechanisms in place whereby employees can report - anonymously if they wish -inappropriate activity in the workplace " and that "no complaints about harassment have beenreceived through these channels".

9 PepsiCo equally stated that they "regularly conductanonymous surveys of employees to measure satisfaction" and that" in these surveysemployees in the Grodzisk plant rated their workplace very highly ". Reference: Standard letter sent by PepsiCo International to the IUF, Solidarnosc informed us, however, that these mechanisms" in the Grodzisk plantconsists of a box where workers can put their observations or complaints , which is placednext to the glass walls of the managers room. complaints directly channelled through theunion chairman have been ignored. The union is not aware of any employee satisfactionsurvey being conducted at the Frito-Lay plant. This approach is consistent with PepsiCo 's record of sexual harassment issues at theworkplace, which has already produced at least two recent rulings against the company in theUnited States.

10 On December 23, 2002 the Equal Opportunity Commission (EEOC)found that a class of female employees had been subjected to egregious sexual harassmentand retaliation at the South Beach Beverage Company (SoBe, a division of PepsiCo ) sales anddistribution facility in Norwalk, Connecticut. The judgement in this lawsuit (Case No. CIV-02-10136, in District Court for the Southern District of New York) fined PepsiCo andSoBe million dollars in damages. In February of this year, Pepsi-Cola General Bottlersagreed to pay out USD 400,000 in damages, back pay and legal fees to resolve a case ofsexual harassment brought by the United States' Equal Employment Opportunity Commission(EEOC). The lawsuit (EEOC, et al v Pepsi-Cola General Bottlers, Inc, NDIII, No 03 C 6576)involved ongoing sexual harassment of a female dispatcher at a Chicago facility over threeyears, repeated changes in her terms of employment after she brought the harassment to the 1 of supervisors, and, finally, her termination of employment in retaliation for a result of the first lawsuit, the EEOC commended PepsiCo for agreeing, under the termsof the Consent Decree, to develop policies and practices aimed at preventing problems ofsexual harassment and discrimination.