The world's largest company _ and biggest private employer _ finds union at its back door

Saturday, October 16th 2004, 12:33 pm
By: News On 6

JONQUIERE, Quebec (AP) _ The signs topping sales racks wear the same yellow smiley face, but promise ``Chute de Prix,'' instead of price rollbacks. The boxes of Tide lining the shelves in housewares come packed with a bonus CD, just for Canadian stores, inviting shoppers to experience ``la passion du Hockey.''

But except for a few tweaks, the low-slung gray and blue Wal-Mart store off highway 70 could be almost any one of the retail Goliath's nearly 5,000 discount emporiums in the United States and eight other countries. And that's what worries executives at the Arkansas headquarters of Wal-Mart Stores Inc.

While still not a certainty, the 165 retirees, single moms, students and other hourly workers at this store 2 1/2 hours north of Quebec City could soon become the first anywhere to extract what the world's largest private employer insists its 1.5 million ``associates'' around the world neither want nor need _ a union contract. A government agency has certified the workers as a union and told the two sides to negotiate.

``One person against Wal-Mart cannot change anything,'' said Gaetan Plourde, a fiery 49-year-old sales clerk in the store's home electronics department, explaining simmering frustration over the store's pay, scheduling and other practices. ``Wal-Mart wants to be rich, but it won't share.''

Wal-Mart responds that it does share its cost savings with consumers through lower prices and that it treats its workers fairly. The company has redefined retailing by squeezing its suppliers and keeping a tight lid on other costs, including labor, allowing it to undercut competing stores. That translated last fiscal year into profits of more than $9 billion on sales of $256.3 billion.

It would be easy to overlook events in northern Quebec _ a region separated from the nearest big city by more than 100 miles of thickly wooded mountains seemingly planted with more moose crossing signs than houses, in a province known for its idiosyncratic labor laws _ as purely local.

But it's not. There has been angry name-calling by workers riven into pro-union and anti-union factions and accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union.

And on Wednesday, Wal-Mart, referring to the strife, said the store was losing money and might have to close.

``If we are not able to reach a collective agreement that is reasonable and that allows the store to function efficiently and ultimately profitable, it is possible that the store will close,'' Andrew Pelletier, a spokesman at Wal-Mart Canada, said in an interview.

The buzz at the Jonquiere store is no accident. It is just the current focus in a larger chess game, waged by labor organizers in stores scattered across Canada _ including two other Wal-Marts in Quebec, where union spokesman Michael Forman said employees have also applied to the provincial labor board for union certification.

The public jockeying over Jonquiere is also also geared to capture the attention of workers in the United States.

Hourly wages are Wal-Mart's biggest single operating cost, about 35 percent to 40 percent of the bill to run its stores. Benefits are second. Those costs have been rising, pushed higher by factors including health care bills and the retailer's entry into more expensive cities.

Wal-Mart says the average hourly wage of its U.S. workers is $9.96 an hour _ just below the $10 an hour average pay for U.S. discount department store workers and short of the $10.87 an hour earned by the average supermarket employee.

But pay and benefits are substantially better at some unionized food stores. A strike by Southern California supermarket workers _ most making $12 to $15 an hour _ early this year came after grocers sought to cut pay for entry-level workers and shift health-care costs. The concessions were essential, grocers said, if they were to compete with Wal-Mart.

Wal-Mart defends its pay as very competitive, and says its chief concern with unions is that they would get in the way of doing business.

Even if a union gains entry, it will come slowly and make only an incremental difference in Wal-Mart's costs and profits, said Emme Kozloff, an analyst who tracks the retailer for Bernstein Research in New York.

But it's the perception among employees and shareholders, as much as the bottom line impact, that concerns Wal-Mart, she said.

``I do think the union thing would be a symbolic blow externally and internally, but they're probably gearing up to handle something like this,'' she said. ``For a retailer, the biggest component of your cost structure is labor and so you're going to be darn sure you do everything in your power to make sure you avoid an increase.''

Wal-Mart, whose sweeping reach and zealous pursuit of lower prices has made it a potent economic force, does little to disguise its distaste for unions. It has built such a high wall against organized labor that it's not clear what would happen if a single brick was yanked loose.

Maybe, as has been the case often before, Wal-Mart's bankroll, tenaciousness and skill at buying time will win out and the union effort here will fizzle. Maybe nothing more will come of it than a few extra cents an hour for a handful of workers _ a financial non-event for a company whose annual sales are larger than the economies of all but 20 countries.

Or just maybe, something else happens _ a prospect the union savors _something with an impact beyond Jonquiere.

``It's a little bit like watching a hurricane form,'' says Robert Hebdon, a professor of labor relations at McGill University in Montreal. ``You don't know whether it's going to be just be a little bit of wind ... or whether it's going to be a storm, a full blown storm.''


The whispered complaints began almost three years ago, months after Wal-Mart opened on the fringes of town, in what used to be a cow pasture. It was only two or three employees at first, grumbling mostly to themselves. Some, like Patrice Bergeron, were irritated about what they perceived as pay inequities _ he was making $7.70 an hour (about $6.05 in U.S. dollars) stocking groceries, while a co-worker was earning $8.50. Others say they were angered about the way managers locked the doors on workers restocking shelves after the store closed, making it impossible for them to take their lunch break even though they were not being paid for the time.

Soon, there was a small but growing cadre of workers, including Bergeron, who is 24 and lives at home with his parents, and Pierre Martineau, a 60-year-old maintenance man with a salt-and-pepper mustache who took the job at Wal-Mart after losing a similar position when the car dealership where he worked closed.

Their clandestine discussions were almost out of character in a region where union membership has long been worn proudly.

While union membership levels have declined in the United States to about 13 percent of the labor force, about a third of all Canadian workers are unionized. Quebec is even higher, with about 41 percent of its workers in unions.

The broad valley cupping Jonquiere is where Canada's first national union was formed, in nearby Chicoutimi in 1903, by pulp mill workers. It is the same place that earlier this year, unionized workers at a nearby smelting facility owned by aluminum giant Alcan Inc. _ informed that the company intended to close a line and cut their jobs _ defied managers and took control of the plant for six weeks.

``You can't live in Jonquiere ... and not have a friend or a relative, a wife or a husband or a father who is unionized,'' says Serge Lemelin, a reporter for regional newspaper Le Quotidien. ``It's a chateau-fort _ a kind of fortress for the unions here.''

Even so, the talk about a union did not win universal support in the new Wal-Mart, with some workers worried it might cost them their jobs, others rejecting the idea of paying union dues.

Soon word got back to managers. Exactly what happened next depends on who is providing the account.

Martineau said the situation grew tense after managers called his name on the intercom one morning shortly after 7 a.m., soon before opening. He says he went into the employee's assembly room, only to find himself surrounded by department managers, including one who jumped up on a table to talk, demanding that he explain his organizing activities. Soon after, many of the other employees stopped talking to him, and managers began pressing him to work faster. He accuses one department manager of trying to run him down with her car while he was collecting shopping carts from the parking lot.

The store's manager would not comment for this story, referring all questions to a Wal-Mart spokesman who denies there has been any intimidation. A department manager said all supervisors had been instructed not to speak because of threats by the union to file suit.

A worker, Noella Langlois, who opposes unionization, downplays Martineau's account and denies knowledge of other parts of it, saying managers were always fair. But she agrees that the mood inside has turned increasingly bitter.

``The atmosphere in the store has totally changed,'' she says, like her co-workers, speaking in French through an interpreter. ``Instead of helping each other, it's become 'It's not my responsibility. It's not in the job description.' ``

Martineau says the pressure soon began to rattle him. ``I would just go into the restroom and cry,'' he says. ``I couldn't take it.''

A statement released Wednesday by Wal-Mart questioned the store's viability given what it called a ``fractured environment'' there.

Forman, the UFCW spokesman countered that ``the company never has made noise that the store is underperforming. ... The company is obviously afraid that there's a snowball effect.''

Wal-Mart's Pelletier said the store has never made money and its finances have gotten worse over the past few months. Asked whether the company was using intimidation tactics in hinting that the store could close, he said no, and added, ``we think we are being realistic and honest.''

Forman's response: ``It's not about profitability, it's about power.''


Protocol says that each day, workers at Wal-Mart stores are supposed to join in shouting a cheer, attributed to founder Sam Walton. The company says it demonstrates its bond with workers, and through them, its customers.

``Give me a W!,'' workers begin the cheer, which soon has them shouting out the company name. ``Whose Wal-Mart is it? My Wal-Mart!''

But just how employees should exercise their stake in Wal-Mart has long been a subject of virulent disagreement between the company and unions bent on recruiting its workers.

``We don't feel like a union is right for Wal-Mart in any part of the country,'' said Christi Gallagher, a spokeswoman at the retailer's headquarters in Bentonville, Ark.

Gallagher notes that Canadian laws and custom are different, but that the company's thoughts on unions transcend borders.

``It's something (the Canadian unionization campaign) that we're certainly aware of in Wal-Mart U.S., but I can tell you our position and thoughts about the union in general are the same. We just don't feel like the union would add anything to our culture or improve our relationships with our associates.''

Union officials are no more generous when it comes to their appraisal of Wal-Mart. But if Wal-Mart's employees are dissatisfied, unions have failed miserably at tapping that sentiment.

The closest a U.S. union has ever come to winning a battle with Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers _ all members of the store's meatpacking department _ voted to join and be represented by the UFCW. The union represents employees at many of the nation's supermarkets and, while it is not the only union that has targeted Wal-Mart, it has long been the retailers' principal adversary in organized labor.

After the Texas vote, Wal-Mart took a stance that has become typical _ and is now being echoed in Canada _ arguing before labor officials that any union should represent all employees at the store. That argument was rejected. But Wal-Mart announced a change that it said had long been planned and had nothing to do with the Texas store. It eliminated the job of meatcutter company-wide, and announced it would only sell pre-cut, pre-wrapped meat.

In theory, the case of the Texas meatcutters, who were offered other jobs by the company, remains alive before the National Labor Relations Board. But none of the 11 employees who voted to unionize still work at the store and the union campaign there has stalled.


Unable to get in through Wal-Mart's front door, union leaders have been trying the latches on the rear windows of the retailer's North American business. They think they've found an opening in places like Jonquiere and six other stores spread across three Canadian provinces.

``It's the contract that's the key,'' Forman said. ``It's not that the people are going to walk away millionaires. They're not. But when you start publishing that (first contract), then we'll republish it in the millions. When you start moving it to different people, whether they're in Canada or Texas or Washington, it's huge because ... what they'll see in front of them is hard evidence that there are some Wal-Mart workers out there who are doing better than them.''

Officially, this is a Canadian campaign. But the U.S. interest is clear. Union officials on both sides of the border have designated the Canadian stores for a program called SPUR _ Special Project Union Representation _ earmarking money from Washington and Toronto for local organizing campaigns.

Regardless of what happens, the faceoff in Canada provides a compelling case study in Wal-Mart's infinite creativity in keeping itself union-free.

Wal-Mart entered Canada in 1994 by buying 122 stores in the discount Woolco chain, and putting its name on them. In doing so, the retailer took a pass on 22 Woolco stores _ including the only 10 whose workers were represented by a union. The company portrays it as a coincidence, the union is certain of more sinister intentions.

Two years later, the Canadian affiliate of the United Auto Workers tried to organize workers at a Wal-Mart in Windsor, Ontario, just across the border from Detroit. It won a fleeting victory without a vote when the government certified workers as a bargaining unit based on the number who signed membership cards.

But that drive fizzled as some of the pro-union workers left for other jobs before a contract could be approved. That never happened, and the retailer lobbied the Ontario government to change its law to insure that no store could ever be unionized in the province without a vote. The law that resulted is known here as the Wal-Mart Exception.

The current battle between Wal-Mart and the union is more intense and fought on more fronts. But both sides are using much the same strategy _ probing, searching for weaknesses.

In Weyburn, Saskatchewan, the union collected enough membership cards to apply for government recognition. Wal-Mart countered by going to court, claiming the provincial government's laws violated the Charter of Rights and Freedom _ Canada's constitution _ by preventing the retailer from communicating its point of view to workers. Workers in that store and another have retained a lawyer to fight the union's efforts, a move that the retailer hails but says it played no role in.

In Thompson, Manitoba, the union has twice sought _ and lost _ a vote to represent workers.

In Moose Jaw, Saskatchewan, the union is asking the government to recognize it without signing up any workers. It bases its claim on the fact that the city once was home to one of the unionized _ and now shuttered _ Woolco stores, and that it has successor rights to represent workers.

Then there is Jonquiere, where the two sides have parried for the past year over how to proceed.


Despite managers' discouragement, talk of a union continued in the store, slowly finding new converts. Sylvie Lavoie, a part-time cashier, says she began to listen after she applied a third time for a full-time position, and saw it given to a new hire. Johanne Desbiens came around when she and Lavoie both applied for a supervisor's position and saw it given to a co-worker with less experience.

But pro-union workers say the balance only shifted in their favor after what at first seemed a failure. In April, after the union collected membership cards from more than 35 percent of the workers, the provincial labor board oversaw a vote on representation, held at the store.

As it often does, Wal-Mart demanded that managers be allowed to cast ballots. That was ruled out, but it didn't matter. The union lost by nine votes.

When the results were announced in front of television news crews set up in the store's parking lot, about two dozen managers and employees who opposed the union began a loud celebration, dancing and shouting the company cheer. Langlois, who was part of that group, says it was justified because many workers were so relieved to be rid of a union that had repeatedly sent canvassers to their homes and soured their workplace.

But pro-union employees said co-workers who had been on the fence found the celebration boastful and unbecoming. Harold Roy, a former teacher who had taken early retirement and now works as maintenance man in the store, said it was only then that he swung to the union's side.

Enough minds were changed for the union to persaude more than half the workers to sign membership cards, enough for the provincial labor board to certify a union without a vote and instruct the two sides to negotiate a contract. Each side now says it is waiting to hear from the other. But Quebec law will not let them put it off forever. If Wal-Mart resists negotiating, the union can ask for a mediator, who could then issue an interim contract.

To Wal-Mart, it smacks of an antiquated law that is disenfranchising both the company and employees.

``We are very disturbed that in Jonquiere we have a situation where our associates were not given the chance to vote,'' spokesman Pelletier says. ``We believe that the only way to ensure that employees can express their views without coercion or intimidation is by allowing a secret-ballot supervised election to take place.''

To the union, the events in Jonquiere are precisely the entry point it's been searching for. ``For the first time Wal-Mart will have to sit with us at the negotiation table,'' says Louis Bolduc, who directs the union's activities in Quebec province. ``We're not going to let them play with us.''

Then there are the workers who signed the union cards. They know the company's viewpoint, as well as the union's. But for many of them it is about something both larger and smaller than the grand strategies of the two sides.

``I didn't do this to unionize other Wal-Marts,'' says Lavoie, the cashier. ``I did it for me.''