Wal-Mart's Record on Human Rights

A report from Human Rights Watch accuses the retailing giant of going to extreme lengths to prevent workers from forming unions

by Pallavi Gogoi

Human Rights Watch, a non-governmental group based in New York, is best known for scathing reports on political issues such as the Rwandan genocide and the Congo's use of children in its military. But late on Apr. 30, the human rights group focused on Wal-Mart (WMT), issuing a report that charged the giant retailer with using strong-arm tactics and, in some cases, illegal means to stop its workers from forming unions. In a 210-page report, the organization says "the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus."

This is only the second time in the organization's 29-year history that it has issued a book-size report on a corporation. The first one was on Enron in 1999. The study's author, Carol Pier, says the group decided to focus on Wal-Mart because of its broad impact on labor practices and the U.S. economy. "Wal-Mart is the largest private employer in the world. Therefore, the way it treats its workers matters," says Pier, senior labor rights and trade researcher at Human Rights Watch. "Our message is that when the world's largest economy has labor laws that are so weak that it is unable to prevent the world's largest corporation from violating workers' rights to organize, it is troubling."

The Retailer Reacts

Wal-Mart disputed the conclusions of the study. "Contrary to the allegations in this report, Wal-Mart respects our associates' right to a free and fair unionization vote through a private, government-supervised process and we remain committed to compliance with U.S. laws regarding workers' right to unionize," the company said in a statement. "Wal-Mart provides an environment of open communications and gives our associates every opportunity to express their ideas, comments and concerns. It is because of our efforts to foster such an environment that our associates have repeatedly rejected unionization attempts."

The company also said that the Human Rights Watch study was part of an effort to influence legislation under consideration in Congress. The proposal, supported by unions, would allow organizers to create a union at a company if workers publicly signed cards in favor of one, as opposed to voting for one in private balloting.

"This pro-union report uses incomplete interviews and unsubstantiated allegations from as much as six to seven years ago to support a union-backed bill before Congress that eliminates workers' rights to a private-ballot vote on unionization," Wal-Mart said.

Damaging Accusations?

The report comes as Wal-Mart is drawing fire from several sides. Politicians have criticized the company, particularly Democratic Presidential candidates such as Senators Barack Obama (D-Ill.) and Hillary Clinton (D-N.Y.) (see BusinessWeek.com, 11/16/06, "Can Barack Wake Up Wal-Mart?"). Community groups and local retailers have opposed stores in certain areas. And at the same time, shareholders have been frustrated by the company's stagnant stock price. One analyst at JPMorgan Chase (JPM) says the stock has been "dead money" (see BusinessWeek.com, 4/27/07, "Wal-Mart's Mid-Life Crisis").

The Human Rights Watch report states that U.S. laws allow Wal-Mart unusual latitude to fight against union organization efforts—and that Wal-Mart goes beyond those laws in some cases. Pier's report says that the company tries to persuade workers and managers to oppose unions from the moment they are hired. Managers receive explicit instructions on keeping out unions, many of which are found in the company's "Manager's Toolbox," a self-described guide for managers on "how to remain union free in the event union organizers choose your facility as their next target."

If workers try to organize, store managers must report it to Wal-Mart's Union Hotline at headquarters. The company responds by sending out its Labor Relations Team almost immediately to stall or stop the organizing effort, the report says.