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 The German company's biggest subsidiary has enjoyed two years of
rapid expansion in a fiercely competitive U.S. market that has seen
it overtake its closest rival Sprint <S.N> in terms of subscribers.
But it has been accused by its main labor union, the Communications
Workers of America (CWA), of flouting employees' rights and was last
year found to have engaged in illegal work practices in two U.S.
National Labor Relations Board cases.
T-Mobile, which has about 45,000 employees, says it abides by the
law and denies mistreating workers.
Two major investors in Deutsche Telekom have expressed concern to
the company about the treatment of T-Mobile employees, according to
sources. Lawmakers in Washington and Berlin have, meanwhile, called
on the German government - which controls 30 percent of Deutsche
Telekom - to put pressure on the company to ensure its U.S. business
respects workers' rights.
Pension fund manager APG Asset Management, which owns 0.15 percent
of Deutsche Telekom, told Reuters it had requested an update on
T-Mobile's treatment of workers in light of rulings by the U.S.
National Labor Relations Board (NLRB) and the CWA allegations.
"Based on this (update), we will consider our position," it said,
without elaborating.
In 2011, APG removed Wal-Mart from its portfolio, citing working
conditions and insufficient willingness to allow staff to unionize.
"Human capital management is very important to us," said APG
sustainability specialist Anna Pot. "It is an important indicator of
the quality of management."
Norges Bank Investment Management (NBIM) - Deutsche Telekom's
fourth-biggest shareholder with a 1.6 percent stake - has also
expressed concerns to the company about the treatment of U.S.
workers, according to two sources familiar with the matter.
NBIM said it had a policy of not commenting on specific investments
or companies.
A senior manager at another top-30 Deutsche Telekom shareholder, who
declined to be named because his employer does not allow him to
discuss individual investments, said it was also concerned about the
treatment of U.S. workers, but had not raised the issue with the
German company.
Deutsche Telekom declined to comment, saying discussions with its
shareholders were confidential.
POLITICAL PRESSURE
Following complaints from the CWA, a judge on the National Labor
Relations Board (NLRB) ruled in March that a number of T-Mobile's
national policies were illegal.
The violations included those that prohibited employees from
discussing wages with colleagues, speaking to the media about their
work environment and seeking help from co-workers to gather evidence
in disciplinary proceedings.
T-Mobile is appealing against the rulings on two of the 11 practices
judged illegal, but has accepted the decisions on the other nine. At
the time, it said the judge's rulings on the 11 policies were only
on "a technical issue in the law", adding: "There are no allegations
that any employee has been impacted by these policies."
In a second case, the NLRB ruled in August that T-Mobile's policy of
prohibiting staff in call centers in South Carolina and Maine from
talking to colleagues or others about employment conditions was
illegal, as was asking workers to sign confidentiality agreements
during internal investigations.
The company said it had changed its rules in response to the NLRB's
decision, but declined to give further details. It said at the time
it found the decision "puzzling, since T-Mobile's approach to
confidentiality is consistent with the National Labor Relations
Board's own investigation manual".
Separately from the NLRB cases, the CWA has documented several cases
of alleged mistreatment of employees. They include allegations
bosses yelled at call center staff, told those with low sales
figures to wear "dunce" caps and banned a pregnant worker from
taking bathroom breaks.
T-Mobile US declined to comment on individual cases. Deutsche
Telekom said the cases documented by the union were isolated
incidents.
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The issue of the U.S. carrier's treatment of staff is also making
political waves in Germany.
German trade union Verdi has taken up the CWA's case with the Berlin
government. It organized a petition on the German parliament
website, which has drawn around 50,000 signatures, demanding that
the finance ministry ensure workers' rights are upheld at T-Mobile
US.
Following the second NLRB ruling, 25 members of the U.S. Congress
sent a letter to German Chancellor Angela Merkel, urging her to look
into the matter. "We respectfully request action by your government
as a significant shareholder to call on Deutsche Telekom and
T-Mobile to fully respect workers' rights in the U.S.," they wrote
in November.
Last April, German Green lawmaker Beate Mueller-Gemmeke made a
similar appeal to the government, which said in a written response
that it respected the T-Mobile US workers' rights "in accordance
with U.S. law".
Asked by Reuters for comment, the German finance ministry, which is
responsible for the country's shareholdings, declined to comment.
BULLYING ALLEGATIONS
By offering a slew of affordable mobile plans and perks like free
music and video streaming, T-Mobile US overtook Sprint last year in
a race for subscribers, though both still lag Verizon and
AT&T. With more than 61 million customers as of September 30,
T-Mobile has a market share of about 16 percent.
The turnaround has caught the attention of potential suitors. In
2014, Sprint was in talks with Deutsche Telekom to acquire T-Mobile,
but they were abandoned in the face of opposition from antitrust
regulators. Talks last year over merging the business with Dish
Networks <DISH.O> stalled over disagreements about valuations.
The allegations from the CWA of mistreatment of individual T-Mobile
workers were compiled in a report the union published in July. The
union said it had documented scores of incidents.
In T-Mobile US's Chattanooga call center, former customer service
worker Julia Crouse said workers were humiliated if they did not
meet their targets when she worked there in 2010.
"The person who had the lowest (sales) stats would end up wearing a
dunce hat and then with the stuffed turtle ... it would be on your
desk," she told Reuters.
She left the company shortly after the alleged bullying and didn't
lodge complaints about her treatment.
T-Mobile US declined to comment on individual cases but said Chief
Executive John Legere and other senior managers visited call centers
regularly and have an "open dialogue" with staff.
The company declined to disclose its average call center staff
turnover rate. However during an NLRB court case in 2014, it said
the turnover rate at the Wichita center was 74 percent in the
previous year.
That is more than double the overall U.S. call center industry's
average across various sectors, which is 25 to 35 percent, according
to Forrester Research analyst Art Schoeller.
A T-Mobile spokesperson said that "currently the average retention
rates at T-Mobile call centers are better than ever and are within
the range of the Forrester Research analyst."
(Additional reporting by Matthias Sobolewski in Berlin and Gwladys
Fouche in Oslo; Editing by Pravin Char)
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