Introduction - The rise of brand activism

Brand activism is a term used when a brand looks to have an effect on a social, economic, environmental, or political issue. Many purpose-driven employers view this as a way of attracting and retaining the best people, alongside broadening their brand’s reach and driving sales. 

Inevitably, brand activism has the potential to court controversy and result in a backlash from some quarters. It also raises employment law issues concerning employers’ rights to restrict their employees’ behaviours inside and outside work, and employees’ rights to express their personal views without restriction.

What’s behind the rise of brand activism?

Covid-19

A Deloitte study “#GetOutInFront” tested public attitudes to issues before and after Covid-19, and how those issues have influenced behaviour and reputation. It found that 40% of the general public say they are more likely to be activists after Covid-19. 38% classify as an activist already, and a fifth say they switched brands because of how they feel about the issues.

Stakeholder pressure

Stakeholder pressure is often behind the increased vocalism of businesses on social issues beyond those which directly relate to their business. Customers, investors and employees increasingly base decisions on from whom they buy, where they put their money and for whom they choose to work on the values of the organisation in question. People, especially the young, are using social media and taking to the streets to stand up against all forms of injustice.

The 2021 Edelman Trust Barometer illustrates the growing importance of an organisation’s values in the decisions of consumers and employees. The report highlights that more is now expected of the businesses we purchase from, with more than half of consumers now buying or advocating for brands based solely on their beliefs. It also shows that six in 10 employees will choose employers based on shared beliefs and values.

Trust is greater today in business than in politicians or journalists. The Edelman Trust Barometer shows that businesses are regarded as both ethical and competent whereas as the media and politicians are regarded as neither. However, with this trust comes increased responsibility. People expect businesses to step up in the face of a sense of failure of leadership by governments and traditional institutions, and many progressive businesses see themselves as taking stands to create a better world.

The role of ESG

The promotion of corporate values has, in many cases, complemented a company’s ESG strategy. The S in ESG refers to “social” and represents a company’s impact on its stakeholders and its broader community.  An increased willingness for a company to comment on issues in society represents an important feature of many ESG strategies.

In the UK, social or political issues to which business have responded include the Russian invasion of Ukraine, Black Lives Matters, trans rights, sustainability, and Brexit.

Influence from the US

The rise in brand activism is particularly visible in the US. There has been a succession of examples in which companies have taken stances on topical issues. For example, many companies, including IBM and Microsoft, considered it important to support publicly the Black Lives Matter movement. As well as abortion rights, gun control is another political issue on which some companies have taken a stand.

The US can be distinguished from the UK by the donations commonly made to politicians by companies - a practice severely restricted in the UK. This may contribute to the greater pressure businesses in the US come under to take political positions on key issues. For example, the US company BSR reacted to the leak of the draft US Supreme Court decision on abortion rights suggesting that Roe v Wade would be overturned after nearly fifty years by commenting:

Whilst such an approach may go too far for most in the UK at present, American-based multinationals will often expect their overseas subsidiaries to follow the values and policies of their US parent. These pressures will no doubt increasingly cross the Atlantic and concern businesses on this side of the Pond.

Emerging divisions

At the same time that brand activism is on the rise, conflicting values and beliefs within society are becoming more pronounced. This report by Lewis Silkin for the Future of Work Hub Eight Drivers of Change – the future of work considers in detail how values, attitudes and behaviours are evolving and creating divisions in society and the workplace.

Identity politics

Identity politics is complementing the old left/right divide with political scientists categorising the new political divisions on the GAL-TAN scale (Global, Alternative, Liberal) – (Traditional, Authoritarian, Nationalist).

The divisions seem to be coupled with decreased tolerance of others’ views. This is illustrated by the emergence of the term “woke” to describe those aware of and attentive to racial and social injustice and references by some to the “Woke Brigade” who they claim seek to police others’ actions and words.

This heady mix has the potential to be replicated within workforces and create friction between colleagues; between employees and the organisation itself; and between the organisation and politicians and commentators promoting conflicting values.

The war on ‘woke capitalism’

Predictably, it is from the US that the first signs of a move in the opposite direction are emerging. Andrew Egdecliffe-Johnson writing in the Financial Times from Davos described the emergence of a backlash against what he described as “the war on ‘woke capitalism’”, with right-wing populists in the Republican Party and industry sceptics fighting back.

A Gallup poll shows how Republican Party confidence in big business has rapidly declined in the last three years. A similar result can be seen from the Pew Research Center study in the US on whether corporations have a positive influence on the country.

In response, some organisations (in the US again) are introducing policies prohibiting discussions of politics or social issues at work. It may be an increasingly brave organisation which is prepared to find itself embroiled in divisive politics - whether in the US, the UK or elsewhere. Nonetheless, some organisations will find not only that they believe that a stance on societal issues is right but that it is necessary to attract and retain the best people, particularly from the millennial and Gen Z generations.

The impact of values in the workplace

Employee values

With ongoing debate on the drivers behind the “Great Resignation”, the current skills shortage has caused employers to recognise that in competing to attract and retain the best people both prospective and current employees now expect more of their employer. Increasingly the choice of employer and its values is seen by employees as an extension of their own personal brand and employers are having to respond to this.

Staff are increasing vocal and assertive about their expectations, pushing their employer toward reflecting their own values and priorities.  Deloitte’s 2022 Global Gen Z and Millennial Survey showed that a majority of both Gen Z and Millennial employees are dissatisfied with their employer’s commitment to societal impact.

There are number of topical examples from the US which illustrate the backlash which can be triggered. For example, the dispute which erupted recently in Florida between the Republican Governor Ron DeSantis and the Walt Disney Company. Having remained silent initially on legislation restricting discussion of sexual orientation and identity in schools, the company responded to employee disquiet by opposing publicly the law only for DeSantis to fight back by threatening to revoke special privileges the company has enjoyed for over half a century.

A further example is the number of major employers in the US which have announced their commitment to reproductive rights in the wake of the overturning of the Roe v Wade decision. In some cases, employers in the US are taking active steps to support those who have to seek abortion care outside of their home state, such as travel expenses, prompting lawmakers to threaten action against them.

Employer values

The pressure to promote certain values can also come from the employer. Purpose-driven employers invest greatly in promoting their values in a climate of increased brand activism and they will want to avoid their employees’ words or actions damaging that brand.

It is common for employment contracts to contain a clause along the lines of:

“You will not whether in the course of your employment or otherwise directly or indirectly make any statement or comment, publish/share any blog or social media post or act in a way which is likely to damage our reputation”

It is easy to see how an employer may consider an employee, particularly a senior employee, acting contrary to its values might be in breach of a clause like this (possibly outside of work as well as in the course of fulfilling their duties).

Take an organisation whose values include promoting a sustainable future and reducing the environmental impact of its activities. Is one of that organisation’s executives potentially in breach of that contractual term if they drive a gas guzzling car or take long-haul flights on holiday where the organisation is taking steps to limit unnecessary business travel? Recall the criticisms levelled at business executives and politicians visiting Davos for flying to the event in private jets and helicopters to discuss climate change – prompting the World Economic Forum to recommend taking the train instead of flying this year. In a high-profile case in a work setting, it is easy to see how the media might pick up on a senior executive espousing one set of behaviours in work and then, they will say, hypocritically behaving in a contradictory way in their private life.

Employment law implications

Disciplinary action

Disciplinary action can be taken in cases of social media activity outside of work where that activity is likely to affect the employment relationship either because of the nature of the work or because of concerns about damage to employer reputation. In terms of justifying action in the context of unfair dismissal claims, much will depend on being able to identify the potential damage to the organisation’s reputation, rather than just a risk of being seen in a poor light by the public. Information shared internally on the importance the organisation places on its values and employee behaviours, as well as the extent to which employers have promoted their values more visibly externally, are likely to be relevant.

As brand activism grows, we may see employers taking more action against employees on this basis.

Diversity and inclusion

Workplace cultures that reflect an employer’s values can encourage employee retention, help attract the best candidates and enhance an employer’s reputation. Will some organisations which place a certain set of values at their heart unrepentantly trumpet these values to attract customers or employees who share those values at the expense of those with different values? And if organisations seek to recruit employees committed to the employer’s core values, how would this play out under equality laws? How would an employer reconcile this with a drive to create a diverse workforce in order to harness a wide range of skills and experience which would inevitably embrace a range of views on political or social issues?

The Equality Act 2010 provides that it is unlawful to discriminate against someone because of a protected characteristic. There are nine protected characteristics, including age, disability, race, sex, religious or philosophical belief and gender reassignment.

Courts and tribunals already grapple with the scope of protection under the Equality Act where different rights and protections clash. Conflict tends to arise between the protected characteristics of religion or belief and sexual orientation and gender reassignment, since some religious groups have strong views on sexual orientation, sexual identity and trans rights.

To amount to a philosophical belief, a belief has to relate to a weighty and substantial aspect of human life and behaviour; have attained a certain level of cogency, seriousness, cohesion and importance; and be worthy of respect in a democratic society, not be incompatible with human dignity and not conflict with the fundamental rights of others. Tribunals have held that the protection against discrimination on the grounds of philosophical belief can potentially cover veganism; a belief in climate change; “gender-critical” beliefs; and a belief in the sanctity of life extending to anti-fox hunting.

The Forstater case is the most recent decision in this area on the potential conflict between “gender-critical beliefs” and the rights of transgender and non-binary people. The tribunal in this case considered that the right to hold a protected belief includes a limited right to manifest that belief and taking detrimental action over legitimate statements of (protected) belief can, in some circumstances, be regarded as unlawful direct discrimination. However, employers ought still to be able to ask employees to avoid proactively airing their views in the workplace if they are causing offence or those views are incompatible with internal policies (as was the case in the case of Mackereth, another recent decision in this area). Taking action because of the inappropriate manifestation of a protected belief in this way could amount to indirect, rather than direct discrimination, which is potentially justifiable as a proportionate means of achieving a legitimate aim.

The European Convention on Human Rights, including the Article 10 right to freedom of expression, applies in the UK pursuant to the Human Rights Act 1998. This Act confers rights directly on public sector workers in respect of whom restrictions will be more difficult to justify. In the private sector the rights become relevant indirectly in the interpretation of other employment laws and restriction would probably be easier to uphold.

Clashes of rights and protections in the workplace are not new, but employers may increasingly find themselves balancing these competing rights when confronted by those expecting employees to adhere to the organisation’s values whilst others decry any attempt to stifle free speech. Equally claims can be foreseen from those whose values run counter to the values espoused by their employer and who may claim to have been denied opportunities or harassed by colleagues as a consequence.

Whether under human rights or equality laws, the employer will need to tread carefully, particularly where activity takes place outside of the workplace, and the employee makes clear that they are expressing their personal views and not that of their employer.

Employer actions

Brand active employers will need to tread carefully in promoting their values and commenting on social and political issues whilst minimising the risk of tensions or even legal issues arising in the workplace.

Prudent employers will want to consider a range of steps to prepare for value clashes at work

• In developing an ESG strategy, consider carefully how brand values will impact on the workforce

• Consider how corporate values can best aid the attraction and retention of the best people

• Set out clearly any expectations on employees both in and out of work to act consistently with the organisation’s values and the consequences of acting or behaving in ways that would undermine those values

• Train managers around the organisation’s values in a changing world of work

• Develop internal procedures for dealing with values clashes

• Reinforce policies to make clear the need in a diverse workforce to treat everyone’s views with respect.

This article was written by James Davies, Employment Partner at Lewis Silkin LLP.

James has also written a report for the Hub ‘Eight drivers of change - the future of work’. The report considers the eight drivers that are collectively propelling change in the world of work, the emerging trends from the drivers and identifies eight predictions for the years ahead.

If you would like to hear more about the report, you can listen to our podcast episode 'In Conversation with...James Davies'.