• Tech workers at The New York Times who recently formed a union have found new support among institutional investors focused on human capital management practices as a pillar within the ESG framework for long-term shareholder value.
• A coalition of investors representing over $1 trillion and led by Trillium Asset Management sent a letter on Tuesday urging the management of the Times to honor the results of a current Tech Workers Guild election and reach an agreement with the workers.
• As digital subscriptions have become critical to the newspaper company's success, the role of technology workers grows.
• The organizing effort is one of the largest among tech workers at any public company, and is in line with a broader movement among technology sector employees to fight for increased workplace protections.

Strong growth in digital subscription revenue, which now accounts for the majority of The New York Times Company's total revenue, is a sign of how technology is shaping the future of the newspaper business.

Behind the scenes, though, the fight for a union among technology workers at the Times is sending a different signal: tech workers linked to digital success are seeking greater workplace rights and protections, and to date have not found a management counter-party which they say is valuing their contributions properly.

Now, the workers — roughly 600 in all, representing one of the largest tech unionization efforts in the market — have a new ally: a group of institutional investors representing over $1 trillion in assets under management who sent the Times' management a letter on Tuesday saying that the interests of long-term shareholders require management to honor workers' right to organize.

"Given the growth of digital subscriptions and content are significant revenue drivers, frequent turnover or potential production stoppages due to strikes present operational risks that may affect shareholder value," the group of institutional investors led by Trillium Asset Management wrote. "We therefore urge the Company to cease and refrain from actions that may violate federal labor law, to respect the final outcome of the Times Tech Guild election without further delays, and to swiftly come to a fair agreement with the Times Guild," wrote the investor coalition, which also includes other major ESG investing firms Domini Impact Investments and Boston Common Asset Management, and New York City Comptroller Brad Lander.

A union election is currently being held with votes to be tallied in early March.

Tech workers at the Times formed a union last April which management declined to voluntarily recognize, leading to the current election through the National Labor Relations Board. The NLRB also has alleged in a complaint that The New York Times violated federal workplace law in efforts to limit support among workers for the union, with a hearing scheduled for March.

For a company whose editorial board speaks out about the importance of workplace rights and protections, there is a reputational and brand risk to The New York Times from a management team that is seen as hostile to organizing activity, says Jonas Kron, chief advocacy officer at Trillium Asset Management, which also recently sent a letter to Starbucks management about the recent unionization efforts among its workers.

"For a company, depending on their reputation and brand image, it can be much more perilous to engage in anti-union behavior," Kron said. "The point of the letter is not to scare management. The point is to make clear to management and the board that investors are not uniformly supportive of their behavior, and to date, I don't know if any investor has said that to them."

The investors stress that they are not telling management how to manage their workforce, but that management must at least start by taking a neutral position on attempts by workers to organize and collectively bargain. "The response from management should be 'go right ahead," Kron said. "As the New York Times' editorial board has suggested, either a positive or neutral reaction is the appropriate reaction and that is really what we're saying. There is an internationally recognized human right for workers to organize and collectively bargain, and standards and norms, and the New York Times should respect those rights."

A Times spokeswoman wrote in an email in response to the Trillium letter that The New York Times Company has a long history working with unions. "Managers and senior leaders have been sharing their thoughts with employees. Similarly, employees have been sharing their views, both in support of and against this union, with each other as well. That's exactly why we wanted an election and a process that allows our employees to ask questions, talk to colleagues and get the information they need to make an informed decision that's right for them," the spokeswoman wrote.

"We are not against unions," she added. "But we do not believe a union would be best for the individuals or teams in the proposed tech and digital product unit. The success of digital product development relies on collaboration, speed and constant experimentation, all of which a collective bargaining arrangement could stifle. This would be the largest unit of its kind by far among tech and digital workers. Regardless of the outcome of the election, we are committed to working together."

Messages from Times' executives leaked to the The Guardian on Tuesday detailed some of its communications strategy related to the union effort.

A new way for investors to support unionization

The letter from the investors represents a new form of engagement with public company management regarding human capital issues, which have always been a core part of ESG investor principles.

Those have taken on even more prominence after the pandemic, as the size and influence of the largest public companies has grown, as public support for workers and unions has risen, and the Securities and Exchange Commission considers a human capital management disclosure requirement.

In addition to the Times' and Starbucks' letters, Trillium sent a similar message to Luxottica, the owners of Oakley and Ray-Ban eyewear brands regarding worker organizing efforts at a Georgia plant.

"This is new and different," Kron said.

While it is not new for investors to express significant concerns and interest in human capital management broadly, he said the growing body of research that shows unions contribute to a more stable workforce is heightened in focus during a tight labor market. "It's a more compelling argument right now when we are in the middle of the great resignation, great reshuffling and all this churn," Kron said. 

While union membership remains low, public support for unions is as high as it's been in over half a century — though sharply divided along partisan political lines — and there is a higher level of organizing activity going on. "And that pushed itself into our consciousness much more forcefully," Kron said, especially in a labor market that has tilted more to workers.

The new investor engagement method is also a function of the difficulty shareholders have faced in the past in using the more traditional shareholder resolution approach to engaging on labor policies, which the SEC has historically struck down on the grounds that labor relations are an "ordinary" function of management.

"We came to be aware that the long-term solution is really workers being able to effectively advocate for what they want," Kron said.

As the SEC considers the human capital disclosure requirement, Kron says investor focus on labor relations as an issue is not going away and direct engagement with management over organizing will continue.

"Companies can look around and see what's going on, and address it or not, and if they don't address it or if they address it in a counter-productive way, investors will hold them accountable," Kron said.

Union funds' history of influence

The broader adoption of a more proactive stance on organizing may be new for many institutional investors, but for union pension and health-care funds that have long wielded considerable influence as large shareholders, it's been a focus and should be for more of their peers in the market.

New York State Comptroller Thomas DiNapoli wrote in an email that ensuring corporations respect workers' right to organize without interference or intimidation should be a concern for major investors. "Our fund is paying more and more attention to labor rights and workforce management. Companies that mistreat workers, and fail to respect established workplace rights, are not aligned with long term shareholder value," he wrote.

DiNapoli has recently weighed in on union efforts at Deere, Amazon, Starbucks and Kellogg.

Alison Omens, chief strategy officer for ESG research nonprofit Just Capital, said union pension funds have long been among the leaders on human capital issues, but there has not been as much done in the past on organizing specifically. As investors engage more on worker issues, the risks around worker activism should become more prominent, especially with workers starting to speak out publicly. "Unionization is an outgrowth of people seeing and leveraging their voices and it doesn't surprise me investors are paying more attention because of the risk of not paying attention to worker issues," she said. 

"Unions play an institutional role in influencing decisions in capitalist systems as shareholders," said Patricia Campos-Medina, executive director for the Worker Institute at the Cornell University School of International Labor Relations, and who previously worked for multiple unions including the SEIU. "That has always been a strength of the labor movement because they built institutional investments through pension funds and health care funds. They can have a voice in how the capital system works. What see now is not just union pension funds but whole pockets of investment funds actually claiming to be responsible investors and see a problem with the imbalance in income in this country." 

More investor concern about income inequality is ultimately a concern about their ability to make money in the long term — if workers don't have a way to improve their economic conditions it is a long-term problem for society, Campos-Medina said. "Giving workers the right to have a voice in what they want is a fundamental shift in how investors are seeing it," she added. "People are choosing not to go back to work, or are quitting, and responsible investors are saying the best way to give profits back to workers is giving them a voice at work, whether it be through a union or giving them higher compensation. It is a great renegotiation between companies and workers and investors and government. It is the responsibility of investors to give some level of economic stability to workers, whether low-wage or highly trained tech workers, giving workers a sense of controlling their lives." 

Omens noted that in the investor stewardship reports put out by the largest asset managers this year, including BlackRock and State Street Global Advisors, there is more discussion of human capital management, and even if these firms may not move to quickly engage in letter-writing campaigns over organizing, they are a "harbinger of what's happening in the investment community." 

BlackRock and State Street are among the top 10 shareholders of The New York Times Company, as they typically are across companies in all sectors of the market given the size of their mutual fund and ETF businesses. Trillium owns roughly 700,000 shares of the publisher's stock (with a value of $35 million at the time of its last quarterly filing for the period ending Dec. 31, 2021), and is the largest shareholder among signatories on the letter. Its stake represents just under half of one-percent of NYT ownership, versus BlackRock's over 8% and State Street's 2.5%, according to S&P Global Market Intelligence.

Unlike an annual shareholder proxy battle, which requires shareholders to amass enough combined voting power to tilt a campaign against a board recommendation, the letter is intended to engage with the company at a more general level and make clear these investors' viewpoint on worker rights. Kron said reasons Trillium has become more focused on this subject in the past year are the higher level of organizing activity going on and the tight labor market. "It pushed itself into our consciousness much more forcefully," he said. He noted that after the company sent its letter to Starbucks management, in which it holds roughly 450,000 shares (worth $53 million at the end of 2021), the company publicly said it would proceed in good faith negotiations. 

"Part of the difficulty in dismissing this kind of letter is it doesn't fit within the normal stories everyone tells themselves about investors," Kron said. "I've been in shareholder advocacy for 20 years and have see all sorts of positive changes long before BlackRock thought it was a good idea."

How tech workers feel about labor and management

Shay Culpepper, a member of the Times Tech Guild who has worked for the publisher for three years as a software engineer, was an independent contractor and worker for the nonprofit sector before joining the Times, which was appealing as an employer because of its mission.

"Tech workers relied on that the 'mission discount," Culpepper said. "People will be so proud to work here. Before this union fight, I don't know, I may have accepted 'bad' management because it is a good paper, because I believe in the mission," Culpepper added, but the way the paper's management has handled the union has left the software engineer's "blood boiling."

"There was all sorts of fear and trepidation," Culpepper says. "Can we do it? Can we get the numbers?"

Culpepper no longer has those fears. "We are going to win."

And there is no going back for the software engineer, either. "Now that I have been part of a collective like this, I don't think I could ever accept a non-union job or at least one where there is not a union effort happening," Culpepper said. "We have each other's backs, we share salaries and advocate for each other and we are a very close community and so I just don't know how else I would get that in a different job. I feel safe with that collective power if the boss does something not great. It's powerful," Culpepper said.

Ashok Chandwaney, a member of the Alphabet Workers Union, which represents roughly 800 employees, said workers across the tech industry want to have these companies with so much money do right for all the people who work for them, but it is a mistake to think of the tech unionization efforts as not being aligned with a broader worker and social movements.

"Nearly everyone is a worker, and when we are talking about decisions that massive tech companies are making, we are talking about all workers being impacted, not just someone who works for Google," Chandwaney said. "We have so much power because we are doing all the work. It's not unique to tech companies. Folks who sell coffee at Starbucks have a lot of power and the folks who do IT at Starbucks corporate. I don't think we're special. Everyone has a workplace. There are a lot of people who aren't seeing their share of the massive profits these companies are making."

"The reality is that the law in the U.S. doesn't protect workers. The legal landscape we live and work in is hostile to workers, and that's the starting point for me," he said. "What I really want for us is having a good life, and part is safety. If I think might be fired tomorrow. But there is other stuff, having health insurance, and good wages, and good health insurance, and some people who work for Google get, and others who work for Google don't."

The belief that workers are driving value for companies, particularly in technology, is giving workers the opportunity to flag issues and raise opportunities to show they are an asset to the company, Omens said. And one vehicle for that is through unionization. "We are seeing real activity around unionization and it's a place for investors to be paying attention," she said. "The overall calculation we are having about workers and human capital and the connection to [investment risk] materiality, it is changing in real time," she said. As a result, it makes sense, as part of this recalculation, for investors to reconsider the risks associated with unionization.

"I would be lying if didn't say I loved this as part of a bigger tech worker movement, too," said Culpepper. "I have yet to see an effective way to put a check on tech companies other than their workers. It's the workers, it all comes back to the workers having power. Having studied economics, I just want investors to care about this. It's such a bad choice for companies to fight anti-union campaigns. It is a very risky move and I don't know if it's seen that way. If you've poisoned the relationship with workers you can't undo that."

This story has been updated to include New York Times Company shareholder data.