Deutsche Telekom under scrutiny over working conditions at U.S. arm T-Mobile

Jan 07, 2016, 07:20 AM

FRANKFURT/NEW YORK (Reuters) – Deutsche Telekom is facing growing pressure from investors and lawmakers to ensure proper treatment of workers at its American business T-Mobile US .

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 in terms of subscribers.

But it has been accused by its main labor union, the Communications Workers of America, 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.

In 2011, APG removed Wal-Mart from its portfolio, citing working conditions and insufficient willingness to allow staff to unionize.

Deutsche Telekom declined to comment, saying discussions with its shareholders were confidential.