Sodexo: the dining hall provider that Scripps College and Harvey Mudd College use to structure and provide their dining services
“We provide food service. We don’t provide prisons. We really respect the students for caring about the world, but picking on the cafeteria is not the way to change it” – Sodexo Spokeswomen Lesile Aun
TL;DR: students “picking on” a corporation with operations in 80 countries and annual revenue of more than $19 billion
What has Sodexo been up to?
Privatization of the prison industry
American and British support for Public-Private Partnerships has grown over the past twenty years, paving the way for the exponential expansion of multinational corporations such as Sodexo. Public-Private Partnerships involve some sort of contractual relationship between a public-sector department and a private industry: the private industry benefits from tax breaks, annual revenue subsidies, and/or public grants; while the public sector is backed by an investor in the competitive market that incurs the borrowing.
From 1994-2001, Sodexo owned between 8 and 17% of the stock in the Corrections Corporation of America (CCA). Sodexo soon became the primary investor in the CCA by 2000, but in 2001, student-led protests across the country pressured the corporation to sell shares of CCA in the United States.
However, Sodexo already owned half of the shares of the UK Detention Services, and just before Sodexo sold its US shares of the private prison industry, the CCA sold the other half of the UK company to Sodexo. Sodexo had pulled out of the US private prison industry, but it now owns, operates, and services a large (undocumented) number of private prisons across Europe. It now is the 18th overall largest private employer in the world.
Compulsory Competitive Tendering
Thanks to the government policy for “Compulsory Competitive Teaching,” which encouraged competition between private and public sector services, major corporations like Sodexo were able to expand into public departments. The policy was created based on the idea that setting up competition between private and public services would lead to better, more cost effective local programs. Compulsory competitive tendering supported price over value, quantity over quality and generally disregarded health, labor rights, customer service, and sustainable development.
Fight against the Service Employees International Union (SEIU)
In 2009, the Service Employees International Union (SEIU) initiated a countrywide campaign against Sodexo to protest low wage and job standards. College students across the nation joined in SEIU demonstrations, fighting Sodexo’s unjust labor rights, unlivable wages, and anti-union policies.
In March of 2011, Sodexo turned to the courts to try and put an end to these protests. They filed a lawsuit against the SEIU under the Racketeer Influenced and Corrupt Organizations ACT (RICO), claiming the union organization used threats throughout their campaign against Sodexo. The two entities reached a settlement later that year. The following statement was released by Sodexo’s general counsel Robert Stern.
“With this settlement, we can begin the process of resuming a constructive relationship with the SEIU that is consistent with Sodexo’s strong record of respecting our employees’ rights under national labor laws.”
By this point, the company had over 120,000 employees in North America alone. 18,000 of these employees were members of 30 unions.
Mental health facilities/Psychiatric asylums
As sole shareholder of the UK Detention Services, Sodexo owned and operated the Harmondsworth Detention Centre outside of London. The Detention Centre holds over 600 people, ranging from young children to the elderly, some of which are as young as 4 years old. Experts globally agree that children detained in asylums and other forms of incarceration experience overwhelming psychological damage. A simple Google search of the Centre shows evidence of the horrific conditions patients are forced into.
According to several news reports, Sodexo’s goal for Harmondsworth was for its patients to essentially act as “slave labor” to cut operating costs for Sodexo.
Racial discrimination led to $80 million class action lawsuit
Sodexo paid $80 million in April of 2005 to settle a lawsuit brought by the company’s thousands of black employees, who claimed that they were “routinely barred from promotions and segregated within the company.” The settlement also outlined a plan to increase company diversity. At the time of the settlement, manager positions were held by one black employee for every seven white employees, and only 18 of the 700 upper management jobs were filled by black employees. It was further alleged that most of these higher positions were only staffed at historically black colleges and universities, and that promotions outside these locations were rare. The money was split between employees depending on how long they had been with the company and was used to “set up monitoring, training, and other diversity initiatives.”
Looking for the cheapest options compromises workers’ rights, the environment, safety, etc.
Sodexo used its 2014 annual report to claim that aspects of government funding, such as “labor law, antitrust law, corporate law, anti-corruption law, and health, safety and environmental law,” are all “risk factors” that impede business and long-term success. Sodexo’s priorities are clearly on profit and global expansion, rather than on labor rights, sustainability, safety, local businesses, or the well-being of their communities.
According to Huffpost’s “Outsourcing America: Sodexo Siphons Cash from Kids and Soldiers While Dishing Up Subprime Food:”
“In 2010, Sodexo was caught fomenting a race to the bottom in food service, by choosing food suppliers based not on quality but based on which supplier could give them the highest cash rebate for the contract. This iced out small local farmers and other quality food suppliers in favor of big agriculture and big business that could best engage in the kickback scheme.”
In the United States, Sodexo has been criticized for a consistent pattern of interfering with worker rights in many states, including the right to organize. These controversies include: Louisiana in 2011, Georgia in 2010, Pennsylvania in 2010, New Jersey in 2009, and Arizona from 2003 to 2009.
Complaints against Sodexo from TransAfrica Global Human Rights
In the beginning of 2011, the non-profit human rights advocacy group TransAfrica released a report, “Voices for Change: Sodexo Workers from Five Countries Speak Out,” accusing Sodexo of “paying sub-par wages, denying employees breaks, and withholding overtime pay,” all denied by Sodexo. TransAfrica’s report included interviews with Sodexo employees in the United States, the Dominican Republic, Guinea, Morocco, and Colombia. The report revealed Sodexo’s aggressive discouragement of unions and even the firing of organizing workers across countries. One interviewee, a Tulane University employee, still made $7.42 an hour after 40 years of employment.
Poor food quality
A student at Loyola-Marymount University (LMU) found a parasite in his Sodexo salmon sandwich, told the staff, and they kept serving that same salmon. Another student found a fly in her salad, another found hair, and even more got food poisoning. All this while Sodexo at LMU received the International Food Safety Leadership Award from the NSF.
Nationwide investigations for overcharging clients in False Claims Act
In July 2010, Sodexo paid a $20 million settlement under the New York False Claims Act for overcharging 21 New York school districts and the State University of New York (SUNY) system for five years, between 2004 and 2009. Despite promising to provide goods at cost, former New York Attorney General Andrew M. Cuomo’s investigation found that the company failed to acknowledge – let alone return – rebates averaging 14 percent that suppliers issued to the schools. This practice violates state and federal laws as well as client contracts.
Like many across the country, the 21 K-12 schools had contracted with Sodexo to provide food and facilities services, as part of the New York State Education Department’s Child Nutrition Programs and the National School Lunch Program, which require that rebates, credits, and discounts be credited to the schools. Federal law further requires that contractors include rebates in their invoices to ensure that federal agencies only pay for “net costs.”
Complications in the contract with the U.S. military
In 2002, Sodexo received the largest ever domestic military food service contract, worth about $1.2 billion total, for Marine Corps food services across the country. However, over the course of the contract, public records revealed numerous issues with Sodexo’s service including cost overruns, food safety violations, and more than 80 heavily redacted audit reports. Sodexo’s contract, which promised to achieve 20% cost savings, ended up inflating costs by 36%.
Sodexo’s contract, which ended in January 2011 after a one-year extension, was only re-contracted to continue east coast operations. Sodexo’s new contract is worth $926 million and provides food services at 31 Marine Corps locations.
According to Subsidy Tracker, Sodexo received $2,734,863 in government subsidies between 2004 and 2014. These subsidies have taken the form of property tax abatements, training reimbursements, grants, tax credits, and enterprise zone designation. Sodexo used the following subsidiaries to earn the distributed subsidies: Sodexho, Sodexho America LLC, Sodexho Inc., Sodexho Laundry Services Inc., Sodexo Magic LLC, and Operations LLC.
“STOP Hunger” Campaign
Sodexo Inc. is the primary funder of the non-profit “Sodexo Foundation,” founded in 1999. The Sodexo Foundation runs Sodexo’s STOP Hunger campaign and gives grants to a variety of hunger programs across the country. However, the Sodexo Foundation only receives a tiny percentage of the company’s revenue. In 2011, Sodexo Foundation reported receiving $982,569 from Sodexo Inc., only 0.01 percent of Sodexo Inc.’s total revenue of nearly $8 billion that year. Meanwhile, Sodexo continues to resist increasing wages, which according to the New York Times are “so low that some workers are required to turn to government assistance, including anti-hunger programs.”