Union Pacific Corporation – Paid Sick Leave (2024)

Outcome: Successfully withdrawn for agreement after Union Pacific agreed to disclose in its next sustainability report that all employees are not subject to discipline for taking sick days.

Whereas: One in five people working in the United States have no access to earned sick time, or “paid sick leave,” (PSL) for short-term illness, health needs, and preventive care.[1] They face an impossible choice: stay at home and risk their economic security or go to work and risk their own, their coworkers’, and the public’s health. Until 2023, Union Pacific Corporation (“UP”) did not offer PSL to most of its employees.[2]

While we commend UP for negotiating PSL policies for unionized employees in 2023, we are concerned that UP’s practice of treating PSL as an absence subject to discipline for certain employees under the company’s points-based attendance policy could meaningfully limit access to and use of this benefit.[3]

We believe subjecting employees to potential discipline for using PSL is unnecessary, bureaucratic, and punitive. While the Railway Labor Act requires railroad carriers, including UP, to negotiate with their unionized workforce over the terms and conditions of employment including PSL, federal courts have decided that the law does not require railroad carriers to negotiate over their attendance policies.[4] We believe UP should unilaterally de-link its attendance policy from its PSL policy in order to provide employees time to visit a doctor or recover from an illness without fear of discipline or job loss.

PSL is a crucial contributor to public health, allowing contagious employees to isolate themselves from coworkers and the public. One study found a 56 percent reduction in COVID-19 cases because of temporary federally mandated paid sick leave in states that did not previously have PSL laws.[5] State and local PSL laws have also been shown to reduce influenza-like illness (ILI) without causing negative effects on employment or wages,[6] but these state and local laws are preempted by federal law and do not generally apply to UP employees.[7] The cost of a pandemic like COVID can amount to 7.3 percent of the average economy.[8] Such systemic costs threaten the diversified portfolios of investors.[9]

Additionally, PSL could help reduce turnover, attract and retain employees, support employee health and safety, and lead to more reliable service—particularly important as UP competes with peers and trucking to maintain share and gain volume.[10] Workers with PSL are “28 percent less likely to experience non-fatal occupational injuries.”[11]

Now that UP has granted all employees PSL, the company must ensure that employees may freely utilize it without fear of discipline or job loss, which would benefit the health of our company, our workforce, and our economy.

Resolved: Shareholders ask the Board of Directors to adopt and publicly disclose a policy that all Union Pacific Corporation employees be able to utilize paid sick leave benefits without being subject to discipline under Union Pacific Corporation’s employee attendance policies. This policy should not expire after a set time or depend upon the existence of a global pandemic.

[1] https://www.bls.gov/news.release/ebs2.t06.htm

[2] https://www.up.com/media/releases/paid-sick-leave-nr-230322.htm

[3] https://ble-t.com/resc/Union%20Pacific%20Railroad%20TEY%20Attendance%20Policy%2001-15-23.pdf

[4] https://law.justia.com/cases/federal/district-courts/illinois/ilndce/1:2019cv06120/368684/34/

[5] https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00863

[6] https://voxeu.org/article/pros-and-cons-sick-pay

[7] https://crosscut.com/news/2022/12/why-cant-wa-rail-workers-use-state-sick-leave

[8] https://www.stlouisfed.org/publications/regional-economist/third-quarter-2021/covid19s-economic-impact-world.

[9] https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf

[10] https://time.com/6213399/railroad-strike-impact-trains/

[11] https://onlinelibrary.wiley.com/doi/epdf/10.1002/ajim.23469?domain=author&token=SRURYFUS3FFZEGVMAZUG