Allegations of legal violations cause investors to look at Pemberton-owned Oscar Mayer

For months, Oscar Mayer, a ready meals producing company owned by private equity firm Pemberton Asset Management, has been facing accusations of legal violations, union busting, and a scheme to fire and rehire employees at its operations in the United Kingdom.

After losing a major contract, the company fired staff and is requiring them to be rehired under less favorable conditions that the workers’ union says will cost employees around £3,000 per year. Unite the Union, which represents workers at the UK based plant, has alleged that some of the efforts by the company violate the law and should have been negotiated in the collective bargaining process.

“Fire-and-rehire is not illegal, but employers have to follow a long process, formally consulting workers and unions and observing set notice periods. If it is not followed correctly, employers open themselves up to legal challenges through employment tribunals or the courts,” according to the BBC.

Oscar Mayer officials have denied any wrongdoing, stating: “We have engaged fully and constructively with our colleagues and their representatives throughout this process and the majority of our employees have signed the new terms. At all times we have complied fully with all relevant regulations, continue to do so, and will defend our approach in the strongest terms should Unite pursue this spurious legal action.”

However, workers at the firm disagree and over 98% of the 550 strong workforce voted in favor of striking in response to the company’s actions with strike actions taking place this fall.^[1] Unite the Union also states that they are bringing charges against the firm that could be worth in excess of £3 million. Workers also marched to the offices of Pembertonin September to protest the actions.

Pemberton Asset Management told FN that since 2023 it “injected much needed capital into Oscar Mayer and actively supported the management in taking the necessary actions to help navigate a number of challenges and ensure a viable future for the company. Pemberton remains convinced that those actions will help stabilise the business and secure job opportunities locally.”

The local MP for Wexham, Andrew Ranger has described the company’s actions as “completely unacceptable,” saying: “I strongly urge Oscar Mayer to fully engage with workers and their representatives, Unite the Union, as soon as possible to reach a fair, ethical and mutually satisfactory resolution to the current situation at their production facility in Wrexham.”

More recently, Unite the Union has taken their case to Pemberton investors and organizations, such as the UN Principles on Responsible Investment (PRI). PRI describes itself as “the world’s leading proponent of responsible investment” to which Pemberton is a signatory. Unite the Union asked PRI to remove Pemberton due to its alleged actions that hurt workers and violated both the law and the commitments to responsible investing the firm has reported as part of their PRI membership to “safeguard the reputation, integrity and good efforts of the PRI and its signatories.”

PRI did not agree to delist Pemberton, saying that they are “not responsible for — nor can it monitor — every individual investment or activity” among its 5,000 signatories. They must be monitored by the investor, in-line with their own investment beliefs, investor duties, commitments and policies,” PRI provided a similar response to allegations that another PRI signatory, Instar Asset Management, was violating the policies that the private equity firm signed onto as part of its PRI membership by not sufficiently addressing accusations of labor abuse at Windmill Farms, a Washington based mushroom farm. PRI noted that their program is simply one where the signatories report their ESG policies, but there is no process to assess whether those reports are factual.

However, at least one Pemberton investor has decided not to invest with Pemberton in the future: The Clwyd Pension Fund. News outlet Werxham.com reported in November that: “Members of the fund’s committee agreed that no more money should be invested in Pemberton Asset Management, supporting the Unite union’s claim  that it is not ethical for those in retirement to benefit from profits gained through wage restrictions.”

As Oscar Mayer employees and their union continue efforts to reverse the changes in working conditions at the plant, more investors are likely to be evaluating their Pemberton holdings and reviewing whether the firm’s actions align with their investment guidelines or create unnecessary risk to investments.

^[1] The vote to strike saw a 76% turnout.