Point-By-Point Commentary On:
Sodexho Marriott's " FAQs on issues raised by the Prison Moratorium Project"
The following is handed out to Sodexho Marriott employees and individuals raising issues raised by the Prison Moratorium Project
By Kevin Pranis of the Prison Moratorium
Q: Sodexho Marriott Services has been the target of
protests organized by a group called Prison Moratorium Project. Can you
explain what this is all about?
A: Recently we have come under attack by an activist group
known as the Prison Moratorium Project (PMP), which is opposed to the
operation of prisons by privately run companies, comparing for-profit
prisons to slave labor camps.
- Comment: While we have helped to lead this fight, PMP is only one of the organizations working to end the Sodexho-prison connection. Students for a Sensible Drug Policy, the Student Association of the State University of NY and the U.S. Student Association helped launch the campaign, and we have also been joined by the Canadian Federation of Students, the Student Environmental Action Coalition and the Young Democratic Socialists. On campus, the campaign has been taken up by dozens of organizations with no previous affiliation to PMP
PMP alleges that Sodexho Marriott Services derives profits from
ownership and management of prisons. Sodexho Marriott Services is not in
the for-profit prison business. The PMP is making a questionable link to
this issue through one of our shareholders.
As a publicly traded company, Sodexho Marriott Services has more than 36,000 shareholders, including
Sodexho Alliance which owns a minor stake (less than 8%) in Corrections
Corporation of America (CCA), a private prison company. Sodexho Marriott
has no control over the investments and business dealings of any of our
shareholders, including Sodexho Alliance.
- Comment: The campaign has never alleged that Sodexho Marriott Services owns or manages prisons. It is Paris-based Sodexho Alliance, SMS' parent company, that is involved in the ownership and management of for-profit prisons. While it's true that SMS has 36,000 shareholders, ONE of those shareholders owns 47% of the company, while the other 35,999+ share the other 53% (meaning that the rest of the shareholders own, on average, 0.14% of SMS apiece). It is widely acknowledged by the financial community and even Sodexho Alliance Chairman Pierre Bellon himself that Sodexho Marriott is a subsidiary of Sodexho Alliance, and that SMS generates 52% of SA's total revenues. By campaigning against Sodexho Alliance's North American subsidiary, students have the potential to directly influence SA business dealings, and Bellon has effectively admitted as much by promising to divest. And it's not a minor stake: Sodexho is the largest institutional investor in the largest private prison company in the world.
However, Sodexho Alliance's Chairman Pierre Bellon has said publicly
that it is the company's intention to divest its stake in CCA.
- Comment: If true, this would go part of the way toward meeting our demands. Unfortunately, it looks like Sodexho Alliance is actually headed in the opposite directions thanks to its recent acquisition of U.K. Detention Services and Corrections Corporation of Australia.
Q: What is the Prison Moratorium Project?
A: PMP is an activist organization, affiliated with the U.S.
chapter of Socialist International. Led by professional activist Kevin
Pranis, the organization was founded in 1995. PMP describes itself as
"a youth-led grassroots organization dedicated to halting prison
expansion, empowering youth and other constituencies affected by prison
expansion." PMP also seeks to stop the incarceration of non-violent
youth offenders, including those convicted of drug crimes.
- Comment: Actually, PMP is an independent organization not affiliated with the Socialist International, and Kevin Pranis is one of several board members (Kate Rhee is its program director). Otherwise, it's a good description of PMP, although it again suggests that PMP is solely responsible, when in fact many organizations have made the campaign happen.
Our senior executive team held discussions with PMP earlier this year
to attempt to understand and respond to their issues and concerns,
explaining that we have no control over the business affairs of our
investors. Nonetheless, PMP officials have publicly stated that regardless
of the facts, they will continue to target our company to generate
publicity for their cause.
- Comment: No PMP "official" has ever made such a comment, nor, as far as we know, has any member of the campaign. Rather than ignoring the facts, NWOM! representatives directly refuted all of the Sodexho team's arguments about the company's "independence," citing documents filed with the Securities Exchange Commission by the company itself. We pointed out, among other things: that former Marriott CEO Charles O'Dell had been replaced by longtime Sodexho executive Michel Landel; that SMS' bylaws, which provide for a classified board and non-cumulative voting, effectively prevent anyone but Sodexho from controlling the board; that Sodexho's 48% share gave them complete control over the company; and that CCA founder "Doc" Crants was a member of the SMS board of directors.
Q: PMP has compared for-profit prisons to slave
labor camps. What is your response?
A: We're in the food service and facilities management
business, not the prison business, and we have no official position
regarding the for-profit prison industry.
- Comment: Sodexho Alliance, unfortunately,
continues to go on record in support of the for-profit prison
Q: I heard that Sodexho Marriott Services uses
prison labor on its campuses. Is that true?
A: That is absolutely false. We do not and have never
employed prisoners at any of our 5,000 locations in the U.S. and
- Comment: The campaign has never accused SMS of using prison labor
Q: Why don't you convince Sodexho Alliance to sell their minority ownership in CCA.
A: We have no control over Sodexho Alliance's business and investment decisions. You can't sell what you don't own and Sodexho Marriott Services does not own shares in CCA or any other prison company.
- Comment: There is only one thing that will convince Sodexho Alliance to divest itself of CCA, U.K. Detention Services and Corrections Corporation of Australia-the threat of lost revenues. And since 52% of Sodexho Alliance's worldwide revenues come from Sodexho Marriott, the only feasible alternative is for us to stop providing revenue to Sodexho Alliance's U.S. subsidiary. Sodexho Alliance's newly declared intention of divesting from CCA (doubtful though it may be) simply proves our point: by refusing to do business with Sodexho Marriott,, students have already begun to make a real difference.
Q: Does Sodexho Marriott Services operate
A: No. The company has no operational or ownership interest
in any part of the private or public prison industry. Sodexho Marriott
Services' business is providing food service and facilities management to
schools, colleges and universities, corporations and health care
- Comment: Unfortunately again, Sodexho Alliance is the largest institutional investor in the largest prison company in the world, and it also directly owns private prison companies in Great Britain and Australia.
Q: Sodexho Marriott Services has been accused by Hotel Employees and Restaurant Employees (HERE) international union of treating its employees unfairly. What is your response to this?
A: Sodexho Marriott Services is dedicated to providing a positive working environment for all its employees. Part of that commitment is an ongoing effort to provide job training, employee advancement opportunities, and competitive wages and benefits. In many cases, our pay and benefit packages are better than what is provided by our competitors. Currently, we provide jobs and benefits for 103,000 employees at 5,000 locations across North America.
- Comment: We would be very interested in seeing wage data from Sodexho Marriott to back up this claim. In the meantime, all we have are reports like the following from the Albany Student Press, "[SMS workers] are paid $6-7 an hour, and most of them work 12 hour shifts. They receive no sick or personal time. Their benefits have nearly quadrupled in cost, from $50 a month to $50 a week. Furthermore, Sodexho-Marriott workers were promised raises every six months, pending evaluation. As of now, there have been no such evaluations, and they have been told evaluations may not be conducted until January 2001 -- 18 months after the food service took over." Given the fact that many food service workers are laid off during the summer months, it seems probable that many families of Sodexho Marriott employees are living below the poverty line. If this pay and benefit package is "competitive," this is a comment on the sad state of the industry, not the generosity of Sodexho Marriott. It's interesting to note that SMS' parent company, Sodexho Alliance, was recently criticized in the Australian press for exploiting child labor at the Olympic Stadium by forcing children as young as 14 to work as independent contractors (Australian Associated Press, 8/22/00).
What PMP's supporters may not realize is that if Sodexho Marriott Services loses a contract because of their protest activities, our employees will be the ones to suffer the most since it is likely many would lose their jobs.
- Comment: Sodexho Marriott has already been kicked off three campuses (State University of NY at Albany, Goucher College and James Madison University) where students have been protesting the Sodexho-prison connection, yet we have not seen one case in which a worker lost his or her job as a result. It is common practice for the new dining service company to rehire all of the old workers, but to ensure that workers are fully protected, all of the students working on the campaign have made retention of workers a non-negotiable demand. The only staff generally not rehired by the new food service provider are top-level managers, and this is only because Sodexho Marriott insists that universities sign agreements preventing the new company from rehiring the former top management staff for one year. If Sodexho Marriott did not insist on this provision, it is likely that ALL of the current staff would be rehired by the new company.
Q: Is Sodexho Marriott Services anti-union?
A: Sodexho Marriott Services works with approximately 260 collective bargaining units nationwide. It is Sodexho Marriott Service's firm belief that its wages and benefits are competitive with those of unionized workers, and the company supports and respects its employees' right to unionize.
- Comment: While it's true that Sodexho Marriott does work with collective bargaining units, the rest of the answer is completely false. The company is notorious for its anti-union tactics, most of which are described in a union-busting manual provided to SMS managers under the misleading title "A Progressive Approach to Labor." In the spring, Sodexho Marriott was forced into an historic settlement with the National Labor Relations Board over illegal work rules that barred the company's employees from talking about their working conditions and coming to public areas of their work shifts while off duty. The rules were so egregious that food service industry weekly Nation's Restaurant News called them an example of "how not to treat employees." (NRN 3/13/00) The company's behavior at the State University of New York at Albany, where managers tore down university-approved student notices, forced workers to remove union buttons and refused to recognize an existing union (until forced to do so by the NLRB), is a perfect example of business as usual.
Q: Is Sodexho Marriott Services part of Sodexho
Alliance or Marriott? What's the company's history?
A: Sodexho Marriott Services was formed following the
spin-off of Marriott Management Services from Marriott International. In
March 1998, the former Marriott management Services merged with the North
American operations of Sodexho Alliance to create a new, independent
publicly-traded company that is listed on the New York Stock Exchange.
Sodexho Marriott Services pays an annual fee to each company for
independent license agreements for the use of the names Sodexho and
- Comment: Notice that they never actually answer the question about whether Sodexho Marriott is part of Sodexho Alliance. SA Chairman Pierre Bellon does, though, and here's his answer "Today, Sodexho Alliance, including Sodexho Marriott Services, employs 270,000 people in 70 countries." Perhaps this explains why students found the July 2000 issue of "Best Of: The Magazine of Sodexho Alliance Success" sitting on the coffee table of a Sodexho Marriott campus office. On page 4, Sodexho Alliance provides a list of "our new clients," including five contracts under the heading "North America- Sodexho Marriott Services." No less an authority than Merrill Lynch agrees, referring to SMS in a May 31, 2000 Company Report as Sodexho Alliance's "U.S. subsidiary." It is, of course, typical for a subsidiary to pay a license fee to the parent company for use of its name. On the other hand, the lease on use of the Marriott name runs out in March, and given all the bad publicity generated by Sodexho's prison investments, it seems unlikely that Marriott International will renew its license to Sodexho.
Q: Does CCA's president serve on your Board of
A: No. Doctor Crants, the former president and CEO of
Corrections Corporation of America, officially resigned from Sodexho
Marriott's Board of Directors in April.
- Comment: Crants resigned from the board just a month after NWOM! representatives first raised the issue with SMS, days after students at ten campuses participated in an April 4 Day of Action against the company. The fact that he served as a member of the Sodexho Marriott board until forced out by student activists points to the tight interlocks between Sodexho Marriott, Sodexho Alliance and Corrections Corporation of America-links that were not dissolved by pushing Crants off the board.