Samsung shareholders warn of legal action over union strike

A banner put up by the Samsung Electronics Shareholder Action Headquarters is seen near the Leeum Museum of Art in Yongsan-gu, Seoul, Wednesday. (Newsis)

A Samsung Electronics shareholder group warned Wednesday it would take legal action against union members if a planned strike damages the chipmaker’s key assets, as the company’s majority union presses management to set aside 15 percent of operating profit for performance bonuses.

The Korea Shareholder Action Headquarters staged a protest from 8 a.m. near Itaewon-ro in Yongsan-gu, Seoul, according to industry sources, putting up banners opposing the union’s planned walkout.

The protest followed the group’s public appeal issued Tuesday over what it described as a looming strike crisis at Samsung Electronics. In the statement, the group said shareholders would pursue legal action if the union pushes ahead with an unlawful strike or if management agrees to what it described as an improper deal.

“The result of a ruinous Samsung union strike is clear,” one banner read. “Public opinion has already turned against it.”

Another banner said a strike affecting key semiconductor processes would be “more serious than a strike by the military or police,” arguing that lawmakers should ban walkouts that hold the national economy hostage.

The warning comes as the Samsung Electronics Labor Union, which says it represents more than half of Samsung Electronics employees, has stepped up pressure on management over wages and incentives.

The union is demanding a 7 percent increase in base pay, the removal of the cap on performance bonuses and the use of 15 percent of operating profit as a bonus pool. It has threatened to stage an 18-day general strike from May 21 if the company does not accept its demands.

Industry watchers have warned that a full-scale strike could cause losses of up to 30 trillion won ($20 billion), although the scale of any impact would depend on the scope and duration of the walkout.

In a statement issued Tuesday, the shareholder group said it would seek damages from all union members if an unlawful strike causes damage to Samsung Electronics’ key assets.

“Samsung’s semiconductor production lines are ultra-precision facilities that must operate around the clock, every day of the year,” the group said. “Even a single disruption could force the disposal of tens of thousands of wafers and result in enormous recovery costs.”

The group urged the union to drop any plan for a walkout that could disrupt production. It also warned Samsung Electronics’ management against accepting the union’s demand for a bonus scheme linked to operating profit.

Even if no strike takes place, the group said it could file a shareholder derivative suit under the Commercial Act if management signs what it called an unfair performance bonus agreement to avoid short-term pressure from the union.