Bureau of Economic and Business Affairs
March 1, 2012


UNITE HERE and LSG Sky Chefs

Background

The OECD Guidelines for Multinational Enterprises (MNEs) are voluntary, non-binding recommendations for responsible business conduct in a global context. The Guidelines are addressed to MNEs operating in or from the territories of governments adhering to the OECD’s Declaration on International Investment and Multinational Enterprises, of which the Guidelines form one part. Adhering governments have committed to encourage their MNEs to follow the Guidelines in their global operations and to appoint a national contact point (NCP) to assist parties in seeking a consensual resolution to issues that may arise under the Guidelines.

As a part of its function, the U.S. NCP receives concerns raised, in the form of a specific instance, about the business conduct of a MNE operating in or from the United States. It handles such issues in accordance with procedures it has adopted for this purpose. In such circumstances, the NCP's primary function is to assist affected parties, when appropriate, in their efforts to reach a satisfactory and consensual resolution to matters raised under the Guidelines. The NCP’s role is to take up issues that are amenable to a consensual resolution under the Guidelines and, where appropriate, make recommendations as to how the enterprise might make its business practices more consistent with the Guidelines. Consistent with the voluntary nature of the Guidelines, the NCP does not make a determination whether a “violation” of the Guidelines has occurred, nor does the NCP have legal authority to adjudicate disputes submitted under this process.

The Specific Instance

On September 26, 2011, the U.S. NCP received a specific instance submission signed jointly by the presidents of UNITE HERE, AFL-CIO and the International Union of Food Workers (IUF). UNITE HERE and its partners raised issues related to LSG Sky Chefs, specifically the consistency of the latter’s activities with the recommendations in Chapter II (General Policies), Chapter V (Employment and Industrial Relations), and Chapter VIII (Consumer Interests) of the Guidelines. UNITE HERE requested the NCP’s assistance to oversee a process of engagement between LSG Sky Chefs’ corporate leadership and UNITE HERE to find remedies to the issues it raised.

The U.S. NCP informed the German NCP of the submission, and shared with it all related documents and information. The two NCPs agreed the U.S. NCP should take the lead on this specific instance because the issues raised had occurred in the United States.

On October 25, 2011, the Chief Executive Officer of LSG Lufthansa Service Holding AG, the parent body for LSG Sky Chefs, acknowledged receipt of the specific instance filing, in a letter to the NCP. He asserted that LSG Sky Chefs was in compliance with applicable national law and practice.

At the time of the specific instance submission, the U.S. National Mediation Board (NMB) was overseeing an ongoing negotiations process between LSG Lufthansa and UNITE HERE. Because the NMB was addressing contract negotiations between the parties, the NCP determined it would await the outcome of the NMB process before assessing what, if any, role the NCP might offer to the parties. The NCP did not consider the existence of a parallel proceeding sufficient reason by itself to decide not to offer its good offices, consistent with the procedural guidance of the Guidelines. For their part, the parties did not pursue further involvement from the NCP while the NMB process and contract negotiations were ongoing.

On January 12, 2012, UNITE HERE informed the NCP that the two sides reached a tentative collective bargaining agreement. On February 17, UNITE HERE, after consultation with AFL-CIO and IUF, officially withdrew its specific instance. The NCP considers the matter between the parties is now closed.

Alan Yu
U.S. National Contact Point Team for the OECD Guidelines for Multinational Enterprises
March 1, 2012