Last Updated 07 Oct 2020

Wal-Mart in the United States

Essay type Case Study
Words 1895 (7 pages)

BENTONVILLE, Ark. — In corporate America, there is nothing like Wal-Mart. In just 40 years, it has become the nation's biggest company and the world's largest retailer. In the United States alone, it owns 3,300 stores and employs more than one million workers. And not one of them is a union member. In fact, unions have made only one successful effort at organizing at a Wal-Mart in the United States — in a butcher's department in a Texas store. Two weeks later the company disbanded that department.

The Texas drive and growing but scattered support from workers as well as 10 judgments in its favor from the National Labor Relations Board are all organized labor has to show for a four-year effort to organize Wal-Mart workers. But labor is escalating its efforts, and in an all-out assault on the discount retailer that has grown to nearly 100 stores in 20 states, the United Food and Commercial Workers Union has hired disaffected managers as organizers and created a radio show and Web site that lambaste Wal-Mart's working conditions.

The union tells Wal-Mart workers that it can increase their wages, which average less than $9 an hour and $18,000 a year, and improve their health coverage and lower their premiums by getting Wal-Mart to contribute more. For labor, it is an enduring embarrassment not to have a presence at a company that is widely viewed as the epitome of American business success. Many labor leaders see this organizing effort as a test case of whether unions can succeed in the 21st century. Wal-Mart officials, like many companies, have strategies to keep out unions as a way of holding down costs.

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But labor leaders assert that Wal-Mart often crosses the line and violates federal laws protecting workers' rights to unionize. Over the last four years, the National Labor Relations Board has filed more than 40 complaints against Wal-Mart, accusing managers in more than two dozen stores of illegal practices, including improperly firing union supporters, intimidating workers and threatening to deny bonuses if workers unionized. Of those, the board found illegal practices in 10 cases; 8 cases were settled and the rest are pending.

But Wal-Mart executives say the company has been able to remain nonunion not because of unfair tactics but because the company keeps its employees happy and pays competitive wages. "Our track record of taking care of our people and taking care of our customers is very good," said Jay Allen, Wal-Mart's senior vice president for corporate relations. "We have a million people in the U. S. , and I'm not saying this is true for every one of those one million, but they like the way we operate our stores. "

Labor leaders say Wal-Mart's strategy to remain nonunion threatens to undermine the wage gains that unions have made over the years. Many Wal-Mart competitors, including Sears, Kmart and Costco, have long had unions, and some of those rivals, most notably, Safeway and Kroger, have started demanding contract concessions, insisting that it is hard to remain competitive when Wal-Mart's wages and benefits are often 20 percent below theirs. Unionized Kroger workers, for example, earn an average of $14 to $17 an hour after three years, retail analysts said, while such Wal-Mart workers often earn $10 to $12. In general Kroger's wages and benefits are significantly higher than Wal-Mart's," said Gary Rhodes, a Kroger spokesman. "Obviously we need to find ways to lower the cost gap. " The effort to organize Wal-Mart has become labor's most ambitious and arguably most difficult unionization drive. "It's essential that the biggest company in the world treat its employees decently, with decent wages and benefits," said Bill Meyer, director of the union drive in Nevada. "It's going to be a struggle. It's not going to be overnight. "

The drive comes when organized labor is eager to reverse its decline — unions represent 9 percent of private-sector workers, down from nearly 40 percent in the 1950's. Many retail and labor experts say the union faces long odds against Wal-Mart. "I think they're very anti-union," said Gary Wright, chief executive of a retail consulting firm based in Denver. "They would do anything they could to keep from becoming a union. " Labor experts see many reasons why Wal-Mart remains nonunion. Turnover is so high, nearly 100 percent at some stores, that many employees have little stake in improving their jobs.

Many Wal-Marts are in rural areas where there is no union tradition. "Unions haven't made headway because Wal-Mart tries to create a better work environment for its employees, it tries to create opportunities for them," said Burt Flickinger III, managing director of Reach Management, a retail consulting firm. "At the same time, Wal-Mart fights unions very aggressively. " Because of Wal-Mart's size, labor leaders hope that a contract with Wal-Mart will have a ripple effect on other parts of the industry. In the 1970's, General Motors was the nation's largest corporate employer," said Allen Zack, an organizing director for the United Food and Commercial Workers, "and, thanks to its contracts with the U. A. W. , it not only set the standards, but it raised the standards for all workers. Wal-Mart is doing the exact opposite. Nowadays it is the nation's largest corporate employer, and it is lowering standards for everyone. " Wal-Mart's labor tactics sometimes take illegal forms. In a ruling in September, a federal administrative law judge found that managers at three

Wal-Marts in Las Vegas had broken the law a dozen times by, among other things, interrogating workers, confiscating pro-union literature and denying a promotion to a woman because she supported a union. Wal-Mart executives say the retailer has been found guilty of using illegal tactics in fewer than a dozen cases, far fewer than many other companies. They said Wal-Mart's record was good considering it has 3,300 stores, including its Sam's Club division, and said that many of the rulings were on appeal.

But union officials noted that in addition to 10 rulings that found illegal tactics, Wal-Mart had settled eight other cases, with nearly two dozen other complaints awaiting adjudication. Labor leaders said these cases represented a high percentage of the 90 stores where there has been organizing activity. Coleman Peterson, the executive vice president of Wal-Mart's people division, said the company instructs managers not to violate labor laws and has never been found guilty of firing any employees — Wal-Mart calls them associates — for supporting a union. We see ourselves as really more pro-associate as opposed to having an attitude toward labor unions," Mr. Peterson said. "Our belief is that if we continue to manage our business in a positive way and take care of associates, they will see no need for third-party representation. " Many employees support the company's position. "The union would hurt — sometimes it tells people not to shop here," said June Hurst, a Sam's Club worker in Las Vegas. "I think our health plan is fantastic. After I pay $3,500 out of pocket, Wal-Mart picks up almost 100 percent. Loretta Hartgrave, who works at a Wal-Mart in Rogers, Ark. , said: "We have a very good open-door policy. We can talk to our management any time we want. " To some labor experts, Wal-Mart is a case study of how aggressive tactics can defeat organizing drives. Fred Feinstein, a former labor board general counsel, said that even when the board charged companies like Wal-Mart with illegal actions, the remedies often could not salvage an organizing drive crippled by employer illegalities. When a union is up against an employer that is determined to stay union-free, that has virtually unlimited resources that it's willing to put into the anti-union effort, it's very, very difficult for the union to win," Mr. Feinstein said. Wal-Mart gives all its employees a handbook that says, among other things, "We are not anti-union. " But it gives its managers a 56-page guide called "The Manager's Toolbox to Remaining Union Free. " The guide tells managers, "It is important you be constantly alert for efforts by a union to organize your associates. Workers who favor a union say they do so because their pay is low. "A lot of the girls were working full time and still qualified for welfare," said Angie Griego, a former Wal-Mart sales clerk in Las Vegas who earned $8. 16 an hour. "Many also received food stamps and medical care from the state. They couldn't afford Wal-Mart's health insurance. " When Ms. Griego began campaigning for a union, she said, managers followed her around the store to monitor her conversations, and the store's top manager put his desk near her department.

She said managers gave her impossible workloads and ordered her into meetings where several managers interrogated her at once. The police were called several times while she was distributing union fliers in the parking lot. "It got unbearable," said Ms. Griego, 59, who said she quit after her doctor warned that her blood pressure was soaring. In the Las Vegas ruling, the judge found that Wal-Mart had repeatedly violated her rights. Wal-Mart is appealing. Union officials say Wal-Mart has the most comprehensive union-fighting strategy of any retailer.

They note that when Wal-Mart acquired Woolworth's operations in Canada, it bought 120 stores, but not the seven that were unionized. Two former managers said that when they telephoned a company hot line to report that union literature was being distributed in their stores, labor relations specialists were flown in on a company jet that afternoon. Managers and workers in a dozen states said the strategy of these specialists included identifying the strongest union supporters, showing anti-union videos and giving speeches telling workers that unions only want their dues money. As soon as they determine you're pro-union, they go after you," said Jon Lehman, a former Wal-Mart store manager who now works as a union organizer. "They go after you any way they can to discredit you, to fire you. It's almost like a neurosurgeon going after a brain tumor: We got to get that thing out before it infects the rest of the store, the rest of the body. " Sidney Smith, a union supporter who worked in the meat department at a Wal-Mart store in Jacksonville, Tex. , was fired after managers accused him of stealing a banana from a boxful that he said he had agreed to buy.

After the labor board charged Wal-Mart with illegally retaliating against Mr. Smith for backing a union, the company paid him $7,000, without admitting wrongdoing. Wal-Mart also settled with three other Jacksonville union supporters who the labor board said had been improperly dismissed. In February 2000, the meat department in Jacksonville became the only Wal-Mart operation in the nation to vote to unionize. Two weeks later, Wal-Mart announced plans to phase out butchers and use prepackaged meat at that store and 179 others.

Wal-Mart said the move was a cost-cutting measure. It said it had been considering using prepackaged meat for several years and the timing of its decision was a coincidence. But the union asked the labor board to declare that the move was illegal retaliation, saying it was designed to warn Wal-Mart workers nationwide against unionizing. Leonard Page, who was the labor board's general counsel at the time, said Wal-Mart's timing was "outrageous," but said he did not file charges because he was unable to gather enough evidence to prove that the timing was not coincidental.

Wal-Mart in the United States essay

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