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Walmart vs. Union-Backed OUR Walmart


Walmart vs. Union-Backed OUR Walmart

Photographs by: (L) Stephen Wilkes/Gallery Stock; (R) Jonathan Alcorn/Reuters

(The story has been corrected to reflect that the UFCW is reviewing allegations of workers' rights violations by Walmart, and to include Walmart's slogan, "Save money. Live better.")

Cindy Murray has been working at Walmart store No. 1985 in Laurel, Md., for 13 years. She’s stationed in the fitting rooms and earns $12.40 an hour. Murray, who’s in her fifties, says she loves her job. She thinks of herself as a model employee. She also helped start OUR Walmart, or Organization United for Respect at Walmart, the group of employees who defied one of the most powerful companies in America by holding protests at about 1,000 stores on the busiest day of the year for retailers. OUR Walmart says it has at least 4,000 members. The protests, on the Friday after Thanksgiving, involved about 500 of them, as well as many thousands of others sympathetic to their cause. Murray and her colleagues are asking Wal-Mart Stores (WMT) for more full-time jobs with predictable schedules instead of part-time work with hours that can change every three weeks—and wages that can provide their families a decent life. They also want respect.

OUR Walmart member Cindy Murray in MarylandPhotograph by Christopher Leaman for Bloomberg BusinessweekOUR Walmart member Cindy Murray in Maryland

On the morning of Nov. 23, instead of going to work, Murray put on her bright green OUR Walmart T-shirt and boarded a bus provided by the United Food and Commercial Workers Union, which has tried and failed to unionize Walmart associates for more than a decade. “Walmart isn’t on a good path, and someone needs to stand up and speak out,” says Murray. “But we always have fear inside of us, too.” They weren’t sure how many police would be present or if shoppers would support them. They weren’t sure if afterward their hours would be cut or if managers would make their lives difficult. None of them could afford to lose their jobs.

Murray was one of several hundred people, employees and activists and community leaders, who met at a store in nearby Hanover, Md. She helped lead chants, including “Stand up! Live better!” a play on Walmart’s slogan, “Save money. Live better.” They sang and marched for a couple of hours, then moved on to another store. At 7 a.m. on Saturday, she punched in for her regular shift.

Walmart is the largest private employer in the U.S., with nearly 1.4 million workers in 4,602 stores. The company operates in 26 other countries, employing an additional 780,000 people. Its efficiency, in stores and throughout its supply chain, has remade the retail industry. When Walmart decides to sell mortgages, local produce, or compact fluorescent light bulbs, the effects ripple through the economy. So do its decisions about workers’ schedules, wages, and benefits. With revenue of $464 billion over the past year, it’s the biggest company in the U.S.

As it has expanded, Walmart has been vilified by activists and watchdog groups who say the company’s relentless growth has come at the expense of its workers, the environment, and the law. Since 2005 it has agreed to pay about $1 billion in damages in six different cases related to unpaid work. The U.S. Department of Justice and the Securities and Exchange Commission are investigating allegations of corruption by company executives in its Mexican subsidiary, Walmart’s biggest, and a potential coverup by executives at its headquarters in Bentonville, Ark. Walmart says it’s cooperating with the investigations and is conducting its own internal investigation and review.

Last month more than 100 workers died in a fire at a factory in Bangladesh that was sewing clothes for several retailers, including Walmart. The company says it was unaware its supplier had sent work to the factory and has fired the firm. According to Bloomberg News, the previous year Walmart had declined to sign an agreement among retailers to pay their suppliers to improve safety conditions at Bangladeshi factories. Walmart said it would be too expensive.

Walmart has survived labor fights before. But Murray and a core group of about 100 employees—along with the largest union of retail employees in the country and a branding firm founded by a top adviser to President Obama—are the architects of what may prove to be the most potent challenge yet. Crucially, the thousands of associates who have joined OUR Walmart say they’re not agitating for legal recognition or collective bargaining rights; unlike previous efforts, they’re not trying to unionize. They say they want to make Walmart a better place to work and shop. “It’s a cause that affects every American,” says Murray.

There’s also growing financial pressure. Walmart wants to expand into big cities where its size and power are controversial. Elected officials, community leaders, and residents often see the company as a disruptive economic force and a socially dubious one as well. “A business case can be made that it would be smart for them to figure out a way to improve the situation for their workers so that OUR Walmart is an ally, not an opponent,” says Ken Jacobs, chairman of the University of California at Berkeley Labor Center. Or it could continue to dismiss OUR Walmart as a small group of disgruntled associates who speak only for themselves and their union backers. Despite the organization’s success in attracting attention to the Black Friday strikes, less than one-tenth of 1 percent of the company’s U.S. workforce participated. What’s certain is that Walmart’s management is facing a new kind of unrest at a time when it’s already vulnerable. Says Julius Getman, a labor law professor at the University of Texas School of Law: “This is a battle for the soul of Walmart’s workforce.”

Walmart has been opposed to unions since Sam Walton opened his first store in Rogers, Ark., in 1962. These days, “we have human resources teams all over the country who are available to talk to associates, and we will get questions about joining a union,” says David Tovar, a spokesman for the company. “We would say: ‘Let us remind you of all that Walmart offers, and of what might go away. Quarterly bonuses might go away, vacation time might go away.’ ”

Tovar says the company is proud of the jobs it offers, that its benefits are affordable and comprehensive, and that there are plenty of opportunities for associates to advance. Walmart has more employees working full-time than its competitors do, he says, and a lower turnover rate. “The suggestion that the issues OUR Walmart is raising are widespread or representative of any sizable number of associates is ludicrous,” he says. “We know this because we have hard data. And we know this because our managers and executives are in our stores every day asking associates questions. They believe what they’re getting at Walmart is a good deal.”

In a rare public appearance at the Council on Foreign Relations in New York on Dec. 11, Walmart Chief Executive Officer Mike Duke, interviewed by Bloomberg LP CEO Daniel Doctoroff, dismissed the idea of a rift between Walmart’s employees and management. “The characterization is not always accurate,” he said. “This tension for me is not a tension.”

Murray’s campaign started six years ago. Backed by the UFCW, and a coalition it called “Wake Up Walmart,” Murray tried to get workers in her store to join the union. She didn’t get far. “We knew we had to do something different this time,” she says. “The organization had to be made by associates and for associates so they would feel more free to join.”

Organizers at the UFCW felt the same way. In 2010 the union hired a veteran labor leader, Dan Schlademan, to be the director of “Making Change at Walmart,” a campaign it had just launched. “We needed to build something new,” says Schlademan. He connected with Murray and a few other Walmart employees and then turned to ASGK Public Strategies, the media and branding firm started by David Axelrod, a senior political adviser to President Obama. (Axelrod had sold his stake by 2010.) “There is a permanent political campaign around the legitimacy of Walmart on both sides,” says Nelson Lichtenstein, a history professor at the University of California at Santa Barbara and author of The Retail Revolution: How Wal-Mart Created a Brave New World of Business. “Walmart hires operatives who are in and out of political campaigns. Unions enlist the hottest political consultants around.”

On its side, Walmart had Leslie Dach, who had been a strategist in several Democratic campaigns and a vice chairman at public-relations firm Edelman. Dach was hired in 2006 in part to improve the company’s reputation, especially with liberal politicians and shoppers. By 2010 the company had reduced waste and energy use, tried to offer more affordable health insurance, and had supported Obamacare. At an analysts’ meeting that October, Dach said: “I think the numbers clearly show that customers and elected officials like us better. … And that makes it easier for us to site stores, makes it easier for us to stay out of the public limelight when we don’t want to be there.”

In the fall of 2010, ASGK began conducting opinion research about how to effectively reach Walmart employees. The firm declined to comment on its work, but as a former executive described it, they realized that buying an ad on Facebook (FB) would allow them to target users who had identified themselves as Walmart employees. There were about 150,000 of them. Then ASGK asked the employees to rate themselves according to how committed they were to Walmart. It focused on the group in the middle: dedicated employees with a couple of complaints. Chief among them was that they weren’t treated with respect by their managers. Second was their pay.

“ASGK was good at getting to the heart of what really was important to people,” says Schlademan. The firm helped name the movement and craft a logo that looks like the OK hand sign. “Three employees have it tattooed on their arms,” he says.

OUR Walmart had a brand. Now it needed more leaders. Maggie Van Ness was an overnight stocker at store No. 1563 in Lancaster, Calif., when she heard about the group from a UFCW representative. In the fall of 2010, Van Ness and another employee began holding meetings at a cafe every Friday, telling their co-workers about the new movement. For a couple of months, they went to the Los Angeles union hall every other week for training. “The union was very good at teaching us what we could and couldn’t do,” says Van Ness, who left the company earlier this year for health reasons. “They stood behind us and pushed in the right direction.”

OUR Walmart member Mary Pat Tifft in WisconsinPhotograph by Ryan Lowry for Bloomberg BusinessweekOUR Walmart member Mary Pat Tifft in Wisconsin

Mary Pat Tifft, from store No. 1167 in Kenosha, Wis., joined the organization in the spring of 2011 and quickly emerged as an effective spokeswoman. Tifft, who’s 57, has worked for Walmart for almost 25 years. She says she was a contented employee until 2005, when union organizers got hold of a memo from a Walmart executive to the board of directors. The memo proposed ways to hold down spending on health care and other benefits without damaging Walmart’s reputation. It suggested capping pay, discouraging unhealthy people from applying, and expressed the company’s frustration that workers with seniority made more than new employees but were no more productive. “Reading that tells you how they feel about associates,” says Tifft. “It was degrading.” Tifft makes $19.96 an hour, the most she can earn without moving into management, which doesn’t interest her. Others in her store don’t make enough to support themselves, she says, and rely on the local food pantry that Walmart takes pride in contributing to. “Everyone always banked on the fact that Walmart would have your best interests at heart. But it’s not true,” she says.

In June 2011, OUR Walmart made its debut. At the UFCW’s expense, Murray, Van Ness, and Tifft, along with 97 other associates, traveled to Walmart’s headquarters a couple of weeks after the company’s annual shareholder meeting. They wrote a 12-point declaration that asked for wages and benefits that ensured no associate would have to rely on government assistance. They also called for dependable schedules, expanded health-care coverage, and the freedom to speak up without facing retaliation. In the parking lot, they presented the document to Karen Casey, the senior vice president for global labor relations. “It was really scary,” says Murray. “I think the executives were just as shocked as we were. Walmart heard us, but they didn’t listen.”

OUR Walmart protesters take part in a Black Friday demonstration in ChicagoPhotograph by Ryan LowryOUR Walmart protesters take part in a Black Friday demonstration in Chicago

The Bentonville trip was the first time many OUR Walmart members met face to face. “I was so taken aback listening to other associates’ stories,” says Tifft. “It made me want to speak louder.” The first discussion about holding protests on a Black Friday began then. At a hotel conference room, Schlademan set up computers for associates to learn how to use Facebook to stay in touch and reach other potential members.

During the next year, union organizers and employee leaders worked on recruitment. Van Ness says she signed up 25 employees at her store, about 10 percent of the staff. Murray says there are 40 members at her store, though most are silent. Monthly dues are $5.

OUR Walmart returned to Bentonville in June 2012 for the annual meeting, which coincided with Walmart’s 50th anniversary. The group had proposed a shareholder resolution calling for greater disclosure about incentive pay for executives, spurred by allegations in the New York Times that top executives in Bentonville covered up evidence from Walmart’s own investigation into accusations of bribery in Mexico. Schlademan had found experts to help Tifft and three others, all shareholders, craft the resolution. Then he got them a lawyer when Walmart tried to have it removed from the ballot.

In front of about 16,000 people, Proposal 6 was read aloud: “We have cut costs too far, stores are understaffed and associates cannot provide customers the service that Sam Walton built the company on and that we are proud to provide. … Sam Walton said, ‘Listen to your associates, they are your best idea generators.’… There has to be a new relationship based on honesty, based on trust, based on respect.” The auditorium was full of cheers; Tifft looked stunned. The resolution, supported by Institutional Shareholder Services, a leading proxy advisory group, won about 9 percent of the vote. The Walton family controls almost half of the shares in the company.

As the holiday shopping season approached, several dozen employees at warehouses that serve Walmart walked off the job in California and Illinois to protest what they said were poor working conditions. Then, in early October, OUR Walmart staged its first strike, in Pico Rivera, Calif. From there, some members went to Bentonville for the annual meeting for analysts. They stood in the parking lot, chanting: “We do not get enough hours. We cannot take care of our families.” Later, Colby Harris, who’s 22 and works in the produce department in a Walmart in Lancaster, Tex., led a dozen or so people to Walmart’s first store. The group collected water jugs, buckets, trash cans, cooking utensils. They found a rhythm and began chanting, “What do we want? Respect! When do we want it? Now!” Says Harris: “I think we caught the managers off guard. It was exhilarating.”

OUR Walmart member Colby Harris in TexasPhotograph by Ryan Lowry for Bloomberg BusinessweekOUR Walmart member Colby Harris in Texas

At the meeting itself, Walmart noted how well it treats its associates. The company had already issued guidelines to store managers about how to respond to walkouts or work stoppages on Black Friday. “We wanted to ensure we provided the safest possible shopping environment for our customers,” says Walmart spokesman Tovar. The company also engaged in its own workers’ campaign. “If OUR Walmart people are in a store trying to talk to associates about joining a union, we do educate them about what it would mean,” he says.

Acknowledging their existence proved Walmart was paying attention. “That was a tactical mistake,” says Lichtenstein of UC Santa Barbara. “That ratified the importance of the protests.” Murray agrees: “It was a great recruiting tool.” She and other leaders spoke to associates afterward, explaining that despite Walmart’s assertions, their group is not trying to form a union. “Right now that’s not even a topic of conversation,” says Tifft.

On the Monday evening before Thanksgiving, Tovar told CBS News that the protests were “another union publicity stunt.” He added: “If associates are scheduled to work on Black Friday, we expect them to show up and to do their job. And if they don’t, depending on the circumstances, there could be consequences.” As encouragement, Walmart offered associates an additional 10 percent discount if they worked the full day. (They are normally entitled to a 10 percent discount.) “Some people might call that an incentive,” says Tifft. “I call it a bribe.”

On the day of the protests, Tovar issued a statement accusing the UFCW of exaggerating the scope of the demonstrations. “We had our best Black Friday ever,” he said. A week later, though, Walmart felt compelled to again counter the perception that its employees were in revolt. Michael Bender, the president of Walmart West, wrote an op-ed in the San Francisco Chronicle with the headline, “Our workers love their jobs.” “I want our associates to know we have their backs,” he wrote.

Cindy Boyd has been a full-time associate at a Walmart in Glendale, Calif., for the past 15 years. Her husband and son work there, too. She doesn’t support OUR Walmart. “I feel like, if they’re not happy, maybe it’s not the right fit for them,” she says. “They shouldn’t bash the company that feeds them.” Shirley Jeanine Clem says she thought the protests were silly and unnecessary. She’s been working at a Baytown (Tex.) store for nine years and was among the women reimbursed after the company found they had been paid less than men for the same work. “As a caring mother, I do not hesitate to tell my daughters to work for Walmart,” she says.

OUR Walmart’s decision to create a new kind of organization makes it a less predictable adversary than the company is used to. Yet it’s hard to assess if the group will achieve its goals without the legal protections that come with union recognition. “Walmart has the advantage of money and power, but these things can be overcome,” says Getman of the University of Texas. “The very fact that the situation is unusual gives an advantage to OUR Walmart.” The group has gotten Walmart’s attention. Beyond that, it may be years before it’s possible to assess its impact on the company.

Meanwhile, Walmart has filed a complaint with the National Labor Relations Board claiming OUR Walmart has been organizing without seeking union recognition. The UFCW is reviewing more than 100 allegations of workers’ rights violations by Walmart and has promised to continue supporting OUR Walmart as long as the group needs help. “Everything will be building toward an even bigger Black Friday 2013,” says Schlademan.

“I’m pretty sure Bentonville knows that we’re here to stay,” says Murray. “I’m not going anywhere. I’m not backing down.”

Susan-berfield-photo-200x200
Berfield is a writer for Bloomberg Businessweek in New York. Follow her on Twitter @susanberfield.

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