AP NEWS

Teamsters lobbying for XPO Logistics board changes

May 8, 2019

GREENWICH — The International Brotherhood of Teamsters union, a longtime critic of transportation-and-logistics giant XPO Logistics’ labor practices, is pushing for a new board chairman — but a shake-up does not appear imminent.

The Teamsters are seeking shareholders’ support, in the company’s May 15 board election, for a proposal to appoint an independent chairman who has not previously served as an XPO executive officer, arguing that such a leader would better respond to alleged labor violations and obstacles to the company’s growth. The union, however, has not suggested an individual to replace CEO and Chairman Bradley Jacobs in his latter position, and XPO said that he and the seven other board members are running uncontested for new one-year terms.

“With XPO at a critical juncture in its history, and facing significant industry headwinds, we believe independent leadership is needed more than ever,” Teamsters General Secretary-Treasurer Jim Hall wrote in a letter to shareholders.

Hall’s letter also said the board’s lead independent director, Michael Jesselson, a longtime business associate of Jacobs, was the “wrong choice” for the position and the recent creation of a separate vice-chairmanship “confuses, rather than enhances board leadership.”

In a statement, the board stood by the company’s corporate governance and backed Jacobs who has served as chairman since the company was founded, in its current form, in 2011. Other than Jacobs, XPO’s board directors are all independents who are not XPO employees.

“As the company’s Board of Directors has repeatedly demonstrated over the years, the board takes matters of corporate governance very seriously and believes that an appropriate balance already exists between Mr. Jacobs’ effective leadership and the robust corporate governance practices in effect,” the board’s statement said. “The proposal … would unduly restrict the board from determining the best structure at a particular time and, thus, would not be in the best interests of the company and its stockholders.”

Long-standing tensions

The Teamsters have organized about 400 XPO employees across six locations, equal to less than 1 percent of the firm’s U.S. workforce of about 50,000.

Those workers in Miami; Laredo, Texas; Aurora, Ill.; Cinnaminson, N.J.; King of Prussia, Pa.; and Trenton, N.J. have voted to join the union. Negotiations on their contract are ongoing, according to the company.

Alongside its representation of that contingent, the union has consistently admonished XPO for purported worker mistreatment.

In particular, the Teamsters have assailed the company for alleged pregnancy discrimination and sexual harassment at a warehouse in Memphis, Tenn. Those accusations sparked Congressional investigations.

In February, XPO announced the warehouse would shutter due to what it described as an “overall business model change” by the plant’s customer, which is believed to be Verizon.

The Teamsters accused the firm of shutting down the plant in retaliation for the workers coming forward with their allegations.

XPO denied that charge, saying it has a “strict no-retaliation policy in place that applies to the company, as well as individuals.”

The company said all of the facility’s approximately 375 hourly workers would be able to get new jobs — at the same wage levels and without having to apply again — at 11 other Memphis-area distribution centers.

In addition, XPO plans to hire 80 for a new warehouse set to open this summer across the street from the facility that is closing.

Last December, the company announced a new policy for the care and support of pregnant workers that includes paid family leave, pregnancy and postpartum benefits, and flexible working arrangements.

Two months later, XPO announced a program for U.S. employees and their families that would give them mobile-app access to a network of more than 1,400 health practitioners.

Setbacks and growth

Meanwhile, XPO has weathered financial headwinds.

First-quarter revenues dropped about 2 percent year over year, to $4.1 billion. Profits fell to $43 million, from $67 million a year ago.

Those dips followed XPO officials’ disclosure in February of a $600 million loss of business, worth two-thirds of its annual transactions with its largest client, which is widely believed to be Amazon.

“The loss of $600 million in business from the company’s largest customer, and a rapidly changing marketplace, make it essential that XPO’s board is optimally structured to ask the tough questions of strategy and managerial performance,” Teamsters’ Hall said in the letter.

XPO executives, however, remain bullish about the company’s future. They have highlighted the firm’s closing in the past quarter on $1.1 billion of new business, up 15 percent year over year.

Company shares closed Wednesday at $62.68, nearly flat compared with their Tuesday finish.

“I don’t think we’re 100 percent out of the woods yet on the curveballs we’ve had in the last year, but we’re making excellent progress — faster progress than I would have expected three months ago,” Jacobs said on a May 2 call with investment analysts.

pschott@stamfordadvocate.com; 203-964-2236; twitter: @paulschott