Employee Activism As A Risk Factor

Fascinated by an article I just read in Quartz at Work about WeWork’s inclusion of employee activism in its public filing with the SEC. The S-1 filing says: “If our employees were to engage in a strike or other work stoppage or interruption, our business, results of operations, financial condition and liquidity could be materially adversely affected.”

WeWork responded to Quartz at Work’s question about why they would include this reputation risk factor:

“Although we believe that our relations with our employees are good, if disputes with our employees arise, or if our workers engage in a strike or other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.”

I have certainly seen statements about reputation risk, CEO transitions, ongoing litigation, etc. in S-1 filings but this is particularly interesting since it signals something that could possibly be amiss. I do wonder, however, how much investors care that there is a potential risk of employee protests afoot. I understand CEOs and C-Level executives being concerned but investors? In our research on Employee Activism, only 12% of employee activists regard financial investors as a target they want to attract when they speak up about their employers. Employees are interested in impacting other employees and top leaders in their organization.

Frighteningly, the article also mentions the possibility that mass shootings will be the next risk factor added to the list. Not good.