Law, Business and Society 11th Edition by Tony McAdams

Exercise 56

Three hundred workers at the Mott's apple juice plant (a Dr Pepper Snapple subsidiary) in Williamson, New York, waged a 16-week strike when the company demanded a $1.50 per hour pay cut even though Snapple had produced a $555 million profit in the previous year (2009) and increased its dividend by 67 percent in May 2010. Snapple claimed the wage cut was justifiable to increase competitiveness, because the workers were averaging $21 per hour while other similar workers were averaging $14. The union, on the other hand, noted that the area suffers from nearly a 50 percent poverty level. The strike ended in September 2010 with a three-year deal freezing rather than reducing wages. Snapple dropped a demand to freeze pensions for current employees, but new hires will join a 401 (k) plan instead of receiving a pension. Snapple will save money on retirement plans. Both sides reportedly considered the result a victory.
Dr Pepper Snapple argued that it had a responsibility as a public company to seek concessions from its workers. Explain that argument.