Hershey: Corporate Responsibility in Word and Deed

According to its  website the company founded by Milton S. Hershey, who gave the masses access to chocolate and whose philanthropy made education possible for countless young orphans while amassing an incredible fortune, transferred his ownership and a great deal of his wealth to the Hershey Trust to  be held for the Hershey Industrial School.  Hershey, according to the website in the section “Milton S. Hershey; the Man and His Legacy” believed “that workers who were treated fairly and who lived in a comfortable, pleasant environment would be better workers”.  Following his death in 1945, the company continued to grow and now has operations throughout the world, approximately 14,000 employees, and revenues of more than $6 billion, but not all of that growth has been accumulated through the sale of superior products and good management.  Hardworking people have also made the success possible but unfortunately, Hershey has long had policies for its work force that do not match the commitment of its founder calling for fair treatment.

In its company profile website Hershey proclaims:

For more than 100 years, The Hershey Company has been a leader in making a positive difference in the communities where its employees live, work and do business.  Corporate Social Responsibility is an integral part of the company’s global business strategy, which includes goals and priorities focused on fair and ethical business dealings, environmental stewardship, fostering a desirable workplace for employees, and positively impacting society and local communities.

Recent court cases tell a slightly different story.  Twice Hershey retail sales representatives (RSRs) were forced to sue Hershey to get fair wages, as the United States District Court held that Hershey misclassified RSRs and ruled they were eligible for overtime.  Campanelli v. The Hershey Company, 765 F.Supp.2d 1185 (N.D.Cal. 2011)

When Hershey still refused to pay overtime RSRs again filed suit to obtain what the law guaranteed them resulting in Hershey formally changing its policies to provide RSRs overtime.  However, in the litigation Hershey claimed it only had to pay .5 (“half-time”) hourly rate for overtime and not the 1.5 (“time-and-one-half”) overtime rate.  On February 20, 2013, the District Court found 1.5 was the proper rate in Zulewski, et al. v. The Hershey Company, Case No. 4:11-cv-05117-KAW.  Click here for Judge Westmore’s Order Regarding the Proper Calculation of Damages Under the Fair Labor Standards Act.

In addition, despite Hershey’s claims it fosters “a desirable workplace for employees”, Hershey engaged in a coordinated policy of getting rid of upper level management and replacing them with younger workers, according to a third suit against Hershey filed by older workers who were involuntarily terminated on or after January 1, 2009 from their jobs as Customer Sales Executives (CSEs) and Category Development Managers (CDMs) (Barnes vs. The Hershey Company (12-CV-01334-CRB (NC)).

Why Does Hershey Spend So Much on Lobbying

So against this background Hershey’s website interestingly reports its lobbying activities that reveal significant expenditures presumably “focused on fair and ethical business dealings, environmental stewardship, fostering a desirable workplace for employees, and positively impacting society and local communities.”  Others may not agree.

The following is from Hershey’s website:

Non-Deductible Lobbying Expenditures Incurred by the Company in 2012

Set forth below is a summary of the non-deductible lobbying expenditures incurred by the Company in 2012.  For any organization that received more than $10,000 from the Company in 2011, we have provided the name of the organization and the amount paid.  We have provided the aggregate fees paid by the Company in 2012 to all other organizations and our internal governmental relations personnel, categorized as set forth below.

Non-deductable expenditures in excess of $10,000 paid to any trade association or single-interest coalition:

Grocery Manufacturers Association $137,439
National Association of Convenience Stores $46,400
National Confectioners Association $39,375
Sweetener Users Association $28,000
Pennsylvania Chamber of Commerce $21,978
National Association of Manufacturers $21,360
HR Policy Association $19,200
Association of National Advertisers $12,840

Non-deductible expenditures in excess of $10,000 paid on account of any state ballot initiative:

No on Proposition 37 (CA) $520,000

The aggregate amount of all non-deductible expenditures of $10,000 or less made to any trade association, single issue coalition or on account of any state ballot initiative:

$15,959

Proposition 37 was a California ballot measure in 2012 that would have required labeling of genetically engineered food with some exceptions and would have disallowed the practice of labeling as “natural” food that was genetically engineered. $46 million was raised in opposition as the measure was defeated 51.4% to 48.59%.  Besides Hershey, other major donors are:

  • Monsanto Company $8,112,867
  • E.I.DuPont De Nemours & Co.$5,400,000
  • PepsiCo$2,585,400
  • Grocery Manufactures Assoc. $2,002,000
  • Kraft Foods $2,000,500
  • Bayer Cropscience $2,000,000
  • Dow Agro Sales $2,000,000
  • BASF Plant Science $2,000,000
  • Sygenta Corporation $2,000,000
  • Coca-Cola North America $1,700,500

Given the background and products of Hershey’s fellow donors, a question is raised as to what is really in the “chocolates” sold by Hershey, how are they made, and whether Hershey is meeting its goals and priorities focused on fair and ethical business dealings and environmental stewardship.

The suits by RSRs and other employees shed great light on Hershey’s conduct in treatment of its employees in contrast to the goals annunciated on their website.  Perhaps management could look to the words of Milton Hershey calling for fair treatment for workers for guidance.

Trademark Notice

Hershey is a registered trademark of The Hershey Company.  The use of this trademark is solely for product identification and informational purposes.  The Hershey Company is not affiliated with this website, and The Hershey Company has no affiliation with The Brandi Law Firm.  Nothing on this site has been authorized or approved by The Hershey Company.