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July 5, 2013 7:38 AM Age: 4 yrs

Passing the Buck at 7-Eleven

Category: AC - Billboard, AC RSS Feeds, AC RSS, CSR Commentary & Opinion, ERM Commentary & Opinion, Ethics Commentary & Opinion, ESG Highlighted Commentary
Source:  Rebecca Smith, coordinator of the National Employment Law Project’s Immigrant

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Dallas-based 7-Eleven’s response to the trafficking indictments of owners of a dozen of its New York and Virginia franchises has been tepid, to say the least.  The convenience store giant needs to step up and take responsibility for the actions that went on in as many as 40 of its stores for as long as a decade.

The workers who should be at the center of this story are immigrants smuggled into the United States and forced to work up to 100 hours a week, for as little as $1 to $3 per hour.  They were housed by their employers, and forced to pay them rent.  Reports say that the trafficking ring ensnared some 50 Pakistani immigrants and went on for more than 13 years.

Most news reports have made much of the workers’ immigration status, but at its heart, this is not a story about some bad-actor franchisees hiring undocumented workers.  It is a story about labor trafficking in its most extreme form.  It is a story, not just of those directly responsible for trafficking, but of the big brands that increasingly dominate our economy and our daily lives, but that eschew responsibility for labor-law compliance. And it’s a story about the crushing need to reform our immigration laws so that eight million vulnerable undocumented workers can stand up for their rights and not fall prey to the most rank exploitation.

7-Eleven corporate headquarters is clearly in a position to monitor and prevent the abuses going on under its nose:

·        The company’s franchise agreements stipulate a high degree of control over what goes on in its stores.

·        the brand controls the training of employees (who must be schooled in the “7-Eleven System”), the uniforms they wear and the stores’ janitorial and banking services. 

·        The brand owns and leases the buildings that its franchisees operate. Franchisees must agree to submit workers’ time records to the brand.   

·        7-Eleven has the right to keep the books for its stores. And it collects fees based on the profits made in its stores. 

So not only did 7-Eleven ignore mistreatment of workers in these stores, the company actually made money from the profits generated by the 100-hour weeks and meager pay received by the Pakistani workers.  The company’s 2011 revenue approached US$80 billion, and it boasted in a press release last year of robust growth, with a new store opening every two minutes.

It is stunning that 7-Eleven strictly regulates how "Slurpees" are made, but is paying no attention to the labor practices of its otherwise micro-managed franchisees. 

This is especially true in light of 7-Eleven’s stated commitment to end labor trafficking in its supply chain. “7-Eleven, consistent with its commitment to conducting business in an ethical, socially responsible and lawful manner, supports the eradication of human trafficking and slavery and fully expects its suppliers to conduct their business in the same manner,” the company’s website proclaims.

On the international front, 7-Eleven says that it is implementing procedures to ensure that human trafficking is eradicated.  We should expect no less vigilance on the home front.

But instead of pledging to support victims, the company is pushing responsibility onto its franchisees. Rather than saying it will ensure that these workers get all the wages owed them and all the services that they are entitled to as victims of labor trafficking, rather than making a commitment to monitor worker exploitation in its stores, 7-11 is saying publicly only that it will now monitor workers’ “employment status,” presumably to ensure that its franchisees hire workers who are eligible to work in the United States. 

While the workers’ immigration status certainly contributed to their victimization, this is a case about horrific levels of abuse. 

This case, which has spawned a nationwide investigation of 7-Eleven stores, also presents an extreme illustration of the need for real immigration reform that will allow workers to stand up for their rights.  Unscrupulous employers have, time and time again, used immigration status as a threat to ensure that labor abuses go unreported.  A broad and clear path to citizenship will take away the fear that keeps these workers silent. It’s the most potent way to prevent labor trafficking.

We have the right to expect that corporate giants will comply with workers’ rights and ensure that their franchisees do as well.  Let’s demand human and labor rights along with our Big Gulps.

Author Rebecca Smith is coordinator of the National Employment Law Project’s Immigrant Worker Justice Project. 


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Published by: Corporate Governance & Accountability Advisors, Inc. Content & Concepts ©2008 by CG&AA, Inc. All rights reserved