Wal-Mart's Record on Human Rights

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'Climate of Fear'

A former Wal-Mart store manager says his experiences were consistent with the assertions. Daniel Jackson worked at the retailer for 12 years, until March, 2006, and was a store manager in Safford, Ariz. "When brand-new associates start out, they are shown a video that might as well be called an anti-union video," he says, "because it says that Wal-Mart is a great place to work and that there is no need for unions who can't guarantee better vacations or benefits or better pay—the only thing that a union can guarantee is your dues."

He adds, "The video says that we don't think our associates should pay their hard-earned money to have somebody else talk for them and that Wal-Mart's open-door policy speaks for itself." Jackson says the "manager's toolbox" had been replaced with an online "manager's workbench," which essentially detailed the same rules on how to handle union activities at the store level.

The Human Rights Watch report says that Wal-Mart's anti-union actions create a "climate of fear" at its U.S. stores. The report says that interviews with 41 former workers and managers revealed that, among other things, Wal-Mart has allegedly ordered the repositioning of surveillance cameras to monitor union supporters, told workers they will lose benefits if they organize, and fired workers for their union activity.

Taking a Union Pulse

Former store manager Jackson says he wasn't aware of any spying, but that the company used to have something called the "UPI," or the "union predictor index," a score based on surveying its workers each year. There were more than 35 questions, such as, "Would you recommend a friend to work at Wal-Mart?"

Today, the UPI no longer has an explicit union reference. It has been changed to a more generic "unaddressed people issues" and all associates are expected to participate. "Even low participation can set off red flags and can be an indication of potential problems," says Jackson. "Stores that had high scores and where there was an indication of gatherings in small groups, the company would in effect fly in a crew within 24 hours and take over the store and start talking to each associate."

Jackson points out that Wal-Mart is very effective at sending its anti-union message. He says there was a chill felt among workers after the company closed a store in Jonquiere (Quebec), Canada, in May, 2005, soon after its workers voted to make it the first unionized Wal-Mart in North America. Similarly, in 2000, it eliminated its meat department after 11 meat cutters voted to join a union in Jacksonville, Texas.

Wal-Mart spokesman David Tovar points out that only 5% of all retailers are unionized. He points out that Wal-Mart's average, full-time hourly wage is nearly double the federal minimum. "Unlike other retail employees, every Wal-Mart associate, both full- and part-time, can become eligible for health coverage. And that coverage is available for just $23 per month anywhere in the country, and only $11 per month in some areas."

Worker Protection

Pier takes issue with a number of Wal-Mart's specific responses. She says that Wal-Mart's claim of an average hourly wage of more than $10 is misleading because it includes hourly-wage managers as well as non-managerial staff. She also says that the company's assertion that it provides low-price health-care coverage doesn't take into account that many of the plans have high deductibles that can make them much less useful.

But, she says the goal of the Human Rights Watch report is to make more general points. First, the study makes the case that U.S. laws for worker protection are not as rigorous as in other countries. Second, it argues that a company as big and powerful as Wal-Mart can take advantage of those laws for its own benefit. Pier says the group's goal is for Wal-Mart to cease all tactics that undercut workers' right to organize and to go a step further as an industry leader and pledge neutrality on union formation. She says that Wal-Mart workers "have come to the realization that the one-two punch of Wal-Mart's anti-union strategy and weak U.S. labor laws is something they cannot compete with."

Gogoi is a contributing writer for BusinessWeek.com.