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<p>We examine the influence of labor unions on non-GAAP reporting. We find managers are less likely to provide non-GAAP earnings disclosures after employees unionize. This relation arises because non-GAAP earnings metrics typically exclude expenses/losses and thus are higher than GAAP earnings. We also find some evidence that managers are more likely to disclose non-GAAP earnings metrics that are lower than GAAP earnings following unionization than they were prior to unionization. Additionally, we find decreased non-GAAP disclosure around unionization is associated with lower employee-related expenses and greater analyst forecast errors and dispersion. Overall, our results suggest managers modify their non-GAAP reporting to increase leverage in union negotiations, and these disclosure choices have real consequences. Our study extends the literature by examining managers’ strategic use of voluntary disclosure to present a negative outlook to unions. We also add to the literature by providing novel evidence on non-executive employee influence over non-GAAP disclosure.</p>

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Labor unionization and non-GAAP reporting

  • 期刊论文

  • 发表日期：

    2026年3月9日

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  • Riddha Basu,
  • Gary Chen,
  • Spencer Pierce

摘要

We examine the influence of labor unions on non-GAAP reporting. We find managers are less likely to provide non-GAAP earnings disclosures after employees unionize. This relation arises because non-GAAP earnings metrics typically exclude expenses/losses and thus are higher than GAAP earnings. We also find some evidence that managers are more likely to disclose non-GAAP earnings metrics that are lower than GAAP earnings following unionization than they were prior to unionization. Additionally, we find decreased non-GAAP disclosure around unionization is associated with lower employee-related expenses and greater analyst forecast errors and dispersion. Overall, our results suggest managers modify their non-GAAP reporting to increase leverage in union negotiations, and these disclosure choices have real consequences. Our study extends the literature by examining managers’ strategic use of voluntary disclosure to present a negative outlook to unions. We also add to the literature by providing novel evidence on non-executive employee influence over non-GAAP disclosure.