CVS Health Corp – Worker Rights Assessment (2024)

Outcome: 23.7% voted in favor of the proposal

Worker Rights Assessment

Resolved: Shareholders urge the Board of Directors to commission and oversee an independent, third-party assessment of CVS’s adherence, above and beyond legal compliance, to its stated commitment to workers’ freedom of association and collective bargaining rights as contained in the International Labour Organization’s (ILO) Core Labor Standards and as explicitly referenced in the company’s Human Rights Policy. The assessment should address management non-interference when employees exercise their right to form or join a trade union, as well as any steps to remedy any other practices inconsistent with CVS’s stated commitments. The assessment, prepared at reasonable cost and omitting legally privileged, confidential, or proprietary information, should be publicly disclosed on its website.

Supporting Statement: CVS has made various commitments to labor rights in its Human Rights Policy and acknowledges widely accepted labor standards like the ILO and the United Nations Guiding Principles on Business and Human Rights. However, CVS provides no reporting on how it’s implementing and complying with these labor principles and human rights commitments.

CVS discloses that it conducts human rights assessments but does not disclose the results of such assessments. Investors are concerned that while these assessments cover workers’ freedom of association and collective bargaining on its overseas supply chain, they exclude a review of CVS’s labor practices in the U.S.[1] CVS’s failure to assess its U.S. operations in the same manner leaves a large gap in the company’s human rights assessments. Shareholders currently have no way to assess whether CVS is complying with its own principles and commitments.

CVS has faced numerous labor and worker rights controversies:

• 2018—CVS was accused of attempting to undermine the validity of union election results at a Brooklyn store with the National Labor Relations Board, delaying collective bargaining negotiations.
• 2021—approximately 6,700 unionized CVS workers signed a petition to support a new union contract citing demands of employees for better pay, healthcare improvements, increased safety standards, and more security for workers.
• 2022—CVS was accused of interfering in union elections in California, leading to an administrative law judge ruling for a new election.
• 2023—CVS pharmacy workers staged protests to draw attention to inadequate staffing and increasing work requirements which they say made it harder to do their jobs safely.

We believe the potential misalignment between CVS’s public commitments and its reported conduct and policies represents meaningful reputational, legal, and operational risks, and may negatively impact its long-term value. Failing to respect workers’ rights could harm CVS’s reputation with consumers and hurt its ability to attract and retain a high-performing workforce, a crucial element of its ability to provide quality products and services.

We believe the requested assessment will enable the Board to provide informed oversight and provide shareholders with necessary transparency regarding management’s adherence to CVS’s labor principles and human rights commitments.

[1] https://www.sec.gov/Archives/edgar/data/64803/000121465923005984/b426230px14a6g.htm