NEW YORK Dollar Tree Inc (DLTR.O) and Dillard's Inc (DDS.N) have agreed to boost oversight to ensure worker safety at their suppliers' factories, and as a result the overseer of New York state's public pension fund said he has withdrawn shareholder proposals on the issue.
The agreements were announced on Thursday, one year after the collapse of the Rana Plaza garment factory in Bangladesh, which made products for many retailers, including Wal-Mart Stores Inc (WMT.N). More than 1,100 workers died in the factory collapse.
New York state Comptroller Thomas DiNapoli, who oversees the $173 billion New York State Common Retirement Fund, said that as a result of the agreements by Dollar Tree and Dillard's, he has withdrawn shareholder proposals asking both retailers to strengthen oversight of suppliers.
Failure to promote worker safety at suppliers can cause financial and reputational damage to retailers, hurting investors, DiNapoli said.
The comptroller said Dollar Tree agreed to have suppliers show they meet global workplace safety and labor standards, and appointed a vice president to oversee its supply chain.
Dillard's created new workplace safety rules for overseas suppliers, DiNapoli said.
Both companies agreed to require suppliers to cooperate with audits of their safety practices, he added.
As of April 22, the Common Retirement Fund owned $30.7 million of Dollar Tree shares and $5.6 million of Dillard's shares.
Dollar Tree is based in Chesapeake, Virginia, and operates about 4,990 stores in 48 U.S. states and Canada. A spokesman called its actions "consistent with our goal to establish a higher level of accountability, conformity and compliance" with its policies toward workplace safety and worker rights.
Dillard's is based in Little Rock, Arkansas, and has about 296 stores in 29 states. A spokeswoman did not immediately respond to a request for comment.
(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler and Dan Grebler)