WILL UNIONS USE PROXY BATTLES JUST FOR BETTER BARGAINING?
There is an even greater danger of labor-oriented shareholder activism than your article "Labor flexes its muscles--as a stockholder" (The Workplace, July 18) suggests, since public-sector pension funds may soon develop a rationale for supporting these labor efforts.
The California Public Employees' Retirement System, the $80 billion bellwether among public-sector funds, has announced that it will start making investment decisions in part on the basis of how companies treat their employees. Labor Secretary Robert B. Reich, who regulates the pension funds under the Employment Retirement Income Security Act (ERISA), has encouraged others to follow suit.
But the political officials and public-sector funds could easily turn their reasoning into a pretext for supporting proxy campaigns based on union grievances.
David F. Shaffer
The Public Policy Institute of New York State Inc.