Wal-Mart Warns of
Democratic Win
By ANN ZIMMERMAN and KRIS MAHER
Wall Street Journal - PAGE ONE
August 1, 2008
Wal-Mart Stores Inc. is mobilizing its store managers and
department supervisors around the country to warn that if Democrats win power
in November, they'll likely change federal law to make it easier for workers to
unionize companies -- including Wal-Mart.
In recent weeks, thousands of Wal-Mart store managers and
department heads have been summoned to mandatory meetings at which the retailer
stresses the downside for workers if stores were to be unionized.
According to about a dozen Wal-Mart employees who attended
such meetings in seven states, Wal-Mart executives claim that employees at
unionized stores would have to pay hefty union dues while getting nothing in
return, and may have to go on strike without compensation. Also, unionization
could mean fewer jobs as labor costs rise.
The actions by Wal-Mart -- the nation's largest private
employer -- reflect a growing concern among big business that a reinvigorated
labor movement could reverse years of declining union membership. That could
lead to higher payroll and health costs for companies already being hurt by
rising fuel and commodities costs and the tough economic climate.
The Wal-Mart human-resources managers who run the meetings
don't specifically tell attendees how to vote in November's election, but make
it clear that voting for Democratic presidential hopeful Sen. Barack Obama
would be tantamount to inviting unions in, according to Wal-Mart employees who
attended gatherings in
"The meeting leader said, 'I am not telling you how to
vote, but if the Democrats win, this bill will pass and you won't have a vote
on whether you want a union,'" said a Wal-Mart customer-service supervisor
from Missouri. "I am not a stupid person. They were telling me how to
vote," she said.
"If anyone representing Wal-Mart gave the impression we
were telling associates how to vote, they were wrong and acting without
approval," said David Tovar, Wal-Mart spokesman. Mr. Tovar acknowledged
that the meetings were taking place for store managers and supervisors nationwide.
Wal-Mart's worries center on a piece of legislation known as
the Employee Free Choice Act, which companies say would enable unions to
quickly add millions of new members. "We believe EFCA is a bad bill and we
have been on record as opposing it for some time," Mr. Tovar said.
"We feel educating our associates about the bill is
the right thing to do."
Other companies and groups are also making a case against
the legislation to workers. Laundry company Cintas
Corp., which has been fighting a multiyear organizing campaign by Unite Here, relaunched a Web site July 14 called CintasVotes.
The site instructs visitors to take action by telling members of Congress to
oppose the legislation.
"We feel it's important that our employee partners
fully understand the implications that the Employee Free Choice Act could have
on their work environment and benefits," said Heather Trainer, a Cintas
spokeswoman.
Business-backed organizations are also running ads aimed at
building opposition to the bill, including the Coalition for a Democratic
Workplace, which counts several hundred industry associations as members.
Another group, the Employee Freedom Action Committee, is run by former tobacco
lobbyist Rick Berman. The groups, which aren't affiliated with each other, say
they have a total of $50 million in funding. Neither will disclose which
companies or individuals have provided funding.
The U.S. Chamber of Commerce has made defeat of the
legislation a top priority. In the past six months, it has flown state and
local Chamber members to
The bill was crafted by labor as a response to more aggressive
opposition by companies to union-organizing activity. The AFL-CIO and
individual unions such as the United Food and Commercial Workers have promised
to make passage of the new labor law their No. 1 mission after the November
election.
First introduced in 2003, the bill came to a vote last year
and sailed through the Democratic-controlled House of Representatives, but was
blocked by a filibuster in the Senate and faced a veto threat by the White
House. The bill was taken off the floor, and its backers pledged to reintroduce
it when they could get more support.
The November election could bring that extra support in
Congress, as well as the White House if Sen. Obama is elected and Democrats
extend their control in the Senate. Sen. Obama co-sponsored the legislation,
which also is known as "card check," and has said several times he
would sign it into law if elected president. Sen. John McCain, the likely
Republican presidential nominee, opposes the Employee Free Choice Act and voted
against it last year.
Wal-Mart's labor-relations meetings are led by
human-resources managers who received training from Wal-Mart on the
implications of the Employee Free Choice Act.
Fine Legal Line
Wal-Mart may be walking a fine legal line by holding
meetings with its store department heads that link politics with a strong
antiunion message. Federal election rules permit companies to advocate for
specific political candidates to its executives, stockholders and salaried
managers, but not to hourly employees. While store managers are on salary,
department supervisors are hourly workers.
However, employers have fairly broad leeway to disseminate
information about candidates' voting records and positions on issues, according
to Jan Baran, a
Both supporters and opponents of the Employee Free Choice
Act believe it would simplify and speed labor's ability to unionize companies.
Currently, companies can demand a secret-ballot election to determine union
representation. Those elections often are preceded by months of strident
employer and union campaigns.
Under the proposed legislation, companies could no longer
have the right to insist on one secret ballot. Instead, the Free Choice, or
"card check," legislation would let unions form if more than 50% of
workers simply sign a card saying they want to join. It is far easier for
unions to get workers to sign cards because the organizers can approach workers
repeatedly, over a period of weeks or months, until the union garners enough
support.
Employers argue that the card system could lead to workers
being pressured to sign by pro-union colleagues and organizers. Unions counter
that it shields workers from pressure from their employers.
On June 30 the National Labor Relations Board ruled that
Wal-Mart illegally fired an employee in
"We've always maintained the termination was not
related to the union and that there was nothing unlawful about an answer
provided an associate about merit pay," said Mr. Tovar, the Wal-Mart
spokesman. "Following the decision, we were considering offering
reinstatement, but that is on hold, since the [union] appealed the
decision."
Unions consider the Employee Free Choice Act as vital to the
survival of the labor movement, which currently represents 7.5% of
private-sector workers, half the percentage it did 25 years ago. The Service
Employees International Union said the legislation would enable it to organize
a million workers a year, up from its current pace of 100,000 workers a year.
The Underdogs
The business-backed lobbying groups are running ads in
states where a win by a Democratic Senate candidate would boost support for the
legislation in the Senate, saying the loss of secret ballots exposes workers to
bullying labor bosses. In one, they use an actor from the "Sopranos"
TV series about mob life to hammer home their point.
Business groups say they're the underdogs since they will be
outspent by unions by a wide margin. Labor has pledged to spend $300 million on
the election and securing passage of the Employee Free Choice Act, compared
with under $100 million by business groups, according to Steven Law, chief
legal officer of the U.S. Chamber of Commerce. The Chamber's strategy is to
focus on the Senate, where labor needs eight more supporters of the legislation
to reach the 60 votes needed to overcome a filibuster.
"This is a David-and-Goliath confrontation, but we
believe we'll have enough stones in the sling to knock this out," said Mr.
Law.
Wal-Mart is a powerful ally. Through almost all of its
48-year history, Wal-Mart has fought hard to keep unions out of its stores,
flying in labor-relations rapid-response teams from its
Labor has fought back with a campaign to portray Wal-Mart as
treating its workers poorly. The UFCW helped employees file a series of
complaints about the company's overtime, health-care and other policies with
the National Labor Relations Board. Dozens of class-action lawsuits were filed
on behalf of workers, many of which are still winding their way through the
courts.
Wal-Mart has been trying to burnish its reputation by
improving its worker benefits and touting its commitment to the environment. On
the political front, it's hedging its bets, spreading its financial contributions
on both sides of the political divide.
Twelve years ago, 98% of Wal-Mart's political donations went
to Republicans. Now, as the Democrats seem poised to gain control in
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