Private Equity Firms Faced with Cautionary Advice from New York Comptroller Tom DiNapoli in Regards to Union Suppression Strategies
In a significant move aimed at ensuring workers' rights and fair labor practices, New York State Comptroller Thomas DiNapoli has announced a new policy to scrutinise the working conditions at private equity-owned companies before investing state pension dollars. This policy, which came into effect in 2023, encourages private equity firms to prioritise workers' rights, protect health and safety, and provide fair compensation and benefits.
The enforcement of this policy involves monitoring and engaging with private equity firms to address any labour issues. Notable private equity firms, such as Blackstone, Carlyle, and KSL Capital Partners, have been warned about union-busting or anti-union activities at companies in which they hold stakes. These warnings are part of the pension fund’s broader effort to combat anti-union practices and uphold labour standards in companies benefiting from public pension investments.
The New York City Comptroller's office has taken a proactive approach to supporting workers’ rights. In addition to direct warnings, they enforce prevailing wage laws, engage in shareholder initiatives that support unionization efforts, and advocate for worker protections, including minimum wage and protection against unfair dismissals. This multi-faceted approach aims to champion labour standards across both public and private sectors.
Justin Flores, director of labor and jobs at the Private Equity Stakeholder Project, has commended New York's labour standards, stating they are "the strongest out there right now" among pension funds.
The records obtained by New York Focus offer a first look at how the state is following through on its new labour standards. Since implementing this policy, the comptroller's office has conducted nearly ten reviews of potential investments as part of implementing the new labour standards.
In a recent instance, DiNapoli's urging was prompted by revelations of child labour at a sanitation company owned by Blackstone, which financed the sanitation operations in part with state workers' savings. In response, the comptroller's office formalised stricter labour standards enforcement for private equity investments.
This is not the first time DiNapoli has weighed in on a labour dispute. In 2017, he urged a company backed by Apollo Global Management to reach a settlement with striking workers due to investments in the company.
In a notable case, DiNapoli sent letters to Carlyle and Blackstone regarding union campaigns and alleged poor working conditions at ZP Better Together and Sorenson Communications in November. The letters listed reasons against unionization and included a call to vote against it if workers felt they were being bullied, intimidated, or lied to.
Last September, DiNapoli wrote to KSL Capital Partners, a private equity firm that specialises in "travel and leisure" and owns properties like ski resorts. The KSL-owned hotel, Outrigger Waikiki Beachcomber Hotel, encouraged workers to vote against unionizing despite earlier promises of neutrality.
As the state continues to enforce these labour standards, it is expected that more private equity firms will be held accountable for their labour practices. The New York State pension fund's commitment to workers' rights, fair wages, and safe working conditions in entities supported by public pension funds is a significant step towards ensuring ethical investment practices.
- In light of the new policy, the New York State Comptroller's office is scrutinizing the labor practices of private equity firms, such as Blackstone, Carlyle, and KSL Capital Partners, before investing state pension dollars in companies owned by these firms.
- The Albany-based Comptroller's office is not only enforcing this policy but also taking proactive steps to support workers' rights, including engaging in shareholder initiatives and advocating for minimum wage and protection against unfair dismissals.
- In response to allegations of poor working conditions and union-busting activities, the Comptroller's office has issued warnings and formalized stricter labor standards enforcement for private equity investments, such as the one regarding the sanitation company owned by Blackstone that received funding from state workers' savings.
- The commitment of New York State's pension fund to workers' rights, fair wages, and safe working conditions in entities supported by public pension funds is expected to hold more private equity firms accountable for their labor practices, fostering ethical investment practices across the industry.
