May 1, 2007

III. Findings and Recommendations

Wal-Mart asserts that "respect for the individual is one of the core values that have made us into the company we are today." [28] Wal-Mart's systematic interference with individual workers' right to freedom of association flies in the face of this professed core value.Wal-Mart should make respect for this fundamental right a component of its recently launched "transformation"-called "Wal-Mart Out in Front"-one of the five pillars of which is "Becoming an Even Better Place to Work." [29] If Wal-Mart does so, the company will truly be a better place to work and will be out in front not only for its financial results but for upholding the rights of its workers.

Weak US labor laws must be reformed to remove the shortcomings that in part account for Wal-Mart's coercive anti-union behavior and to deter other employers from emulating Wal-Mart's approach to workers' right to organize.In our 2000 report, Unfair Advantage: Workers' Freedom of Association in the United States Under International Human Rights Standards ("Unfair Advantage"), Human Rights Watch made numerous recommendations to address the violations of workers' right to freedom of association in the United States, among them that the United States ratify the two core ILO conventions on workers' right to freedom of association: ILO Convention 87 concerning Freedom of Association and Protection of the Right to Organise and ILO Convention 98 concerning the Right to Organise and Collective Bargaining.More than six years later, neither this nor most other recommendations have been implemented.As detailed in this report, US companies, such as Wal-Mart, continue to violate workers' right to freedom of association with virtual impunity.Human Rights Watch continues to urge the United States to bring US labor law into conformity with international law on the crucial issue of workers' right to organize. [30]

Weak US Labor Laws and Wal-Mart's Strategy to Defeat Union Organizing

Imbalanced Communication and Information

Finding: US employers are permitted to campaign aggressively against union formation, including by strongly encouraging and even requiring worker attendance at anti-union "captive audience" meetings on work time, without allowing workers similar access to information supporting organizing efforts.Wal-Mart takes advantage of this imbalance with an aggressive strategy that includes anti-union presentations and videos and bombards workers with the message that disastrous results will ensue if they organize, while largely denying them access to contrary views.As a result, workers' right to choose freely whether to organize is violated.

Recommendation to US Congress:US labor law should return to an approach that recognizes the power imbalance of the employment relationship and the inherent coerciveness of employer anti-union campaigning.It should regulate employers' actions to ensure that workers can freely decide whether to select union representation, including by allowing workers to receive a fair balance of employer and union views on organizing.Specifically, when employers hold anti-union captive audience meetings, a principle of proportional access should apply and workers should be allowed to hear information from union representatives under similar conditions about the right to form and join trade unions.

Recommendation to Wal-Mart: Wal-Mart should immediately cease all tactics, whether allowed under US law or not, that undercut workers' freedom of association.While Wal-Mart has no obligation under US or international law to remain neutral on union organizing, it has a duty to ensure that its workers are free to choose for themselves, without coercion, whether to organize.

In addition, Wal-Mart is an industry leader and we urge it to be a leader on workers' rights.To compensate most effectively for its past record and truly be "out in front," Wal-Mart should dramatically alter its approach to workers' exercise of their right to organize: as a few other US employers have done, the company should pledge neutrality on union formation and should drop its hard-hitting strategy against worker organizing.Wal-Mart should set forth this new commitment in a workplace code of conduct governing its US facilities, convey it to workers through company-wide communication channels, and provide for independent and transparent third-party monitoring to ensure compliance.

Limited Worker Access to Union Information and Representatives

Finding:US labor law also restricts workers' access to pro-union views by allowing employers to bar employees from receiving information from union representatives anywhere on company property, even in areas otherwise accessible to the public, like sidewalks and parking lots.As long as employers do not single out union solicitation and distribution of union materials for such a ban, US law allows them to treat union representatives as trespassers.To communicate with workers, union organizers may have to visit workers' homes or handbill off company property, tactics which also make organizers vulnerable to charges of harassing employees.Wal-Mart bans solicitation and distribution of literature by all outside organizations inside Wal-Mart facilities.Though in some cases it allows such activities on company property outside the stores, it has at times selectively and discriminatorily banned union organizers from distributing materials in violation of its own policy and US law.[31]

Recommendation to US Congress: Employers should be required to allow union organizers and advocates to meet with and provide information to workers in non-work areas during non-work time, creating rules that balance the right of workers to receive union information with employers' right to operate on their property uninterrupted.

Recommendation to Wal-Mart: Wal-Mart should grant outside union organizers access to non-work areas of its facilities to communicate regularly with workers during specified hours during non-work time.

Aggressive Anti-Union Election Campaigns

Finding: Since 1947, US labor law has allowed employers to reject workers' demand for union recognition based on "card check"-union authorization cards signed by the majority of workers in the proposed bargaining unit-and, instead, force an NLRB election.Even when a majority of employees have clearly chosen representation, Wal-Mart invokes the law and demands an NLRB election.The company then uses the time leading up to the election to focus its campaign against union formation, while disallowing opportunities for opposing views.The result is a climate in the workplace so acrimonious and coercive that workers are effectively denied their right to freely choose whether to organize.

Recommendation to US Congress:US law currently fails to ensure free and fair union elections and to prevent employers like Wal-Mart from engaging in election campaign conduct that undermines workers' right to freedom of association.The US Congress should, therefore, enact the Employee Free Choice Act, passed by the US House of Representatives on March 1, 2007, and pending in the US Senate, which would require employers to recognize unions based on card check after an NLRB determination that the majority of workers in an appropriate bargaining unit had freely signed the union authorization cards.

Recommendation to Wal-Mart: Wal-Mart should accept worker demands for union recognition based on card check upon a showing that the majority of workers in an appropriate bargaining unit signed the cards, with adequate safeguards, including monitoring by independent parties, to ensure the cards were signed freely and without coercion from union supporters.

Permanent Strike Replacements

Finding: US labor law permits employers to permanently replace workers on economic strikes.Strikers have a right to their old jobs back only if the replacements leave and have the right to jobs similar to their former positions only if those jobs are available.International standards do not allow for permanent replacement of striking workers.Wal-Mart regularly stresses the weaker US legal protections during organizing campaigns, as well as in new worker trainings, telling them that if they form a union and a strike occurs, the company will continue operating by hiring permanent replacement workers.It emphasizes that strikers, therefore, will have no right to their jobs back after the strike.Wal-Mart uses this threat of permanent replacement as part of its strategy to scare workers into rejecting union formation at its US stores, undermining their right to freely choose whether to organize.

Recommendation to US Congress: Employers should be banned from hiring permanent replacements during all labor strikes.They should be allowed to continue operating only with temporary workers who cede their jobs to strikers at the strike's conclusion.

Recommendation to Wal-Mart: Wal-Mart should stop threatening workers with permanent replacement in the event of an economic labor strike.The company should also commit to using only temporary replacement workers to continue operations in the event of a strike and should convey that commitment to workers through company-wide communication channels.

Inadequate Penalties for US Labor Law Violations

Finding: Employers face no punitive consequences for violating US labor laws.Instead, a guilty employer can only be ordered to restore the status quo ante.US labor laws' weak remedies, such as orders to reinstate illegally fired workers with small back-pay awards; to cease and desist from unlawful conduct; and to post notices in the facilities at issue, do not effectively deter employers from breaking the law and violating workers' right to freedom of association, largely because they carry, at most, nominal economic consequences.Benefiting from these minimal consequences, Wal-Mart has repeatedly used illegal tactics to prevent union formation at its US stores. [32]

Recommendation to US Congress: The penalty for violating US labor laws should be increased to effectively dissuade employers from using illegal anti-union tactics.Employers should be required to give illegally fired workers full back pay, regardless of interim earnings, plus punitive damages in cases of willful violation of US law.In all cases of unlawful conduct, employers should also be assessed significant, meaningful fines payable to the US government.Specifically, the US Congress should enact the Employee Free Choice Act.Under the proposed act, if an employer illegally fires or fails to hire union supporters, the employer will have to award the affected workers three times back pay. [33] If an employer willfully or repeatedly discriminates against union supporters or otherwise interferes with or coerces workers in the exercise of their right to organize, the employer will face a penalty of up to $20,000 per violation, payable to the US government. [34]

Recommendation to Wal-Mart: Wal-Mart should not engage in illegal anti-union conduct and should use company-wide communication channels to convey to workers a policy affirming their right to organize and bargain collectively.

Inadequate US Labor Law Enforcement

Finding: Many years often pass between the filing of unfair labor practice charges against an employer and the issuance of a decision and order by the five-member NLRB in Washington, DC.Even more years pass if a party appeals the Board's decision to a US circuit court of appeals or, ultimately, the US Supreme Court.Although in certain cases of serious allegations of illegal employer conduct, the NLRB is authorized to intervene to stop the unfair practice more immediately by asking a federal district court for a "10(j) injunction" against an employer, the NLRB rarely does so. [35] The excessive delays in labor law enforcement further undermine workers' right to freedom of association by delaying justice and in many cases rendering the already weak remedies for labor law violation virtually meaningless.

Recommendation to US Congress: As provided for in the Employee Free Choice Act, US labor law should be amended to require the NLRB to seek an injunction in cases of unlawful anti-union firing or discrimination, threats of such illegal conduct, and employer anti-union activity that "significantly interferes with, restrains, or coerces employees" in the exercise of their right to freedom of association. [36] Such an injunction would, for example, provide for the provisional reinstatement of workers allegedly fired for union activity, helping to mitigate the negative impact the firing has on organizing.The injunction would also restore meaning to the reinstatement remedy, which is currently largely useless to fired workers who have found other jobs while awaiting the resolution of their cases.

Recommendation to NLRB: The NLRB should seek 10(j) injunctions more frequently, particularly with repeat offenders such as Wal-Mart that systematically try to keep unions out of their US stores and undermine workers' right to organize.

Finding: Wal-Mart's hard-hitting, multifaceted strategy to prevent union formation at its US stores is implemented across the country and overseen and directed from Wal-Mart headquarters.The case-by-case, region-by-region approach that the NLRB uses for unfair labor practice cases against Wal-Mart is inadequate to meet the challenges posed by Wal-Mart's coordinated nationwide efforts to bar workers from organizing.

Recommendation to NLRB: The NLRB General Counsel should establish a national task force on Wal-Mart to address the company's behavior nationwide, with coordinated handling of unfair labor practice cases against the company by experienced Board attorneys authorized to seek stronger enforcement measures from NLRB administrative law judges, the five-member Board, and the federal courts.

Lack of Transparency on Wages and Benefits

Current and former Wal-Mart workers shared with Human Rights Watch myriad concerns about their wages and Wal-Mart's employee healthcare plans.Because uniform wage data and information on company healthcare spending are unavailable, however, Wal-Mart workers cannot accurately assess whether their pay and healthcare plans fall below the industry-wide average, as many suspect.

The International Labour Organization has emphasized the importance of transparency regarding workers' terms and conditions of employment.The ILO has found, for example, that collective bargaining is facilitated by laws requiring worker access to information "on the economic situation of the bargaining unit, the enterprise or companies in the same sector" because "they enable the bargaining agents to make a realistic evaluation of the situation." [37] Public disclosure of company wage rates and healthcare spending to Wal-Mart employees in the United States, none of whom is currently a union member, would allow the workers to make a fully informed assessment of their employment situation and, derivatively, a fully informed decision regarding whether they wish to select a union.

No Uniform Public Data on Wages

Finding:US law does not require employers to publicly disclose employee wages.As a result, companies are free to publish wage information at their discretion and may include in the public wage calculations the earnings of whichever employees they feel appropriate.As a result, assessing employers' compensation rates relative to industry-wide averages is often virtually impossible.For example, the only wage data that Wal-Mart has disclosed for workers at its stores across the United States is an average hourly wage for full-time employees.Because this average includes hourly managers and excludes part-time workers, it is not comparable to industry data generated by the US Department of Labor (DOL), Bureau of Labor Statistics (BLS) and is, therefore, of little use to those seeking to assess Wal-Mart wages relative to industry-wide averages.

Recommendation to US Congress: US law should require all companies to disclose publicly wage information according to specific, established standards.The standards should, at a minimum, mandate the public disclosure of the average hourly wage of all non-supervisory workers, including full- and part-time workers, and the average annual earnings of all store employees, using BLS reporting guidelines.

Recommendation to Wal-Mart : Wal-Mart should, at a minimum, publicly disclose the average hourly wage of all its non-supervisory employees and the average annual earnings of all store employees, thereby making the data comparable to BLS figures and providing workers with the information they need to make an accurate assessment of their wage rates as compared to their counterparts throughout the industry.

No Uniform Public Data on Employer Benefits Spending

Finding : Under US law, companies are required to provide information annually on tax form 5500 concerning all of their employee welfare benefits plans, including health insurance, dental insurance, life insurance, long-term disability, and others.Employers are not required, however, to disclose separately the total costs per plan nor how much they spend per plan.Without this information, it is impossible to assess employer spending on any one category of benefits relative to an industry-wide average.Although some companies voluntarily provide such information, others, including Wal-Mart, do not, making it impossible, for example, to determine the amount these companies contribute annually to their employee healthcare plans or the percentage of total worker healthcare costs borne by the companies.

Recommendation to US Congress: US law should require companies to submit separate tax schedules for each welfare benefits plan offered, including healthcare, publicly disclosing total employer spending per plan and the percentage of total costs of each plan paid by the employer.

Recommendation to Wal-Mart : Wal-Mart should submit a separate tax schedule for each of its welfare benefits plans, including healthcare.

[28] Wal-Mart Stores, Inc., "Respect for the Individual and Corporate Contributions," November 21, 2006, http://www.walmartfacts.com/articles/4617.aspx (accessed January 10, 2007).

[29] Wal-Mart Stores, Inc., "Wal-Mart 'Out in Front,'" undated, http://www.walmartfacts.com/FactSheets/12112006_Wal-Mart__Out_in_Front_.pdf (accessed January 10, 2007).

[30] See Human Rights Watch, Unfair Advantage: Workers' Freedom of Association in the United States under International Human Rights Standards (New York, NY: Human Rights Watch, 2000), pp. 17-39.

[31]Wal-Mart Stores, Inc., "Wal-Mart Corporate Policy: Solicitation & Distribution of Literature," Policy PD-38, March 31, 2006 (on file with Human Rights Watch); see below, "VII. Freedom of Association at Wal-Mart: Anti-Union Tactics Deemed Illegal Under US Law," subsection "Discriminatory Application of Solicitation Rules."

[32] See below, "VII. Freedom of Association at Wal-Mart: Anti-Union Tactics Deemed Illegal Under US Law."

[33] H.R. 800, "Employee Free Choice Act," 110th Cong., 1st Sess. (2007), sec. 4(b).Under the act, however, back pay amounts would likely still be calculated according to current US labor law, which requires that interim worker earnings be subtracted from back pay owed. Ibid.

[34] Ibid.

[35] The 10(j) injunction was named after the labor law section creating the remedy. National Labor Relations Act (NLRA), 49 Stat. 449 (1935), as amended, sec. 10(j).

[36] H.R. 800, "Employee Free Choice Act," (2007), sec. 4(a).A similar requirement already exists in cases of serious charges of unfair labor practices against a union; if an NLRB regional director finds merit to such charges, the NLRB must petition a federal district court for a "10(l) injunction" against the offending union. NLRA, sec. 10(l).

[37] International Labour Conference, 1994, Freedom of association and collective bargaining: Promotion of collective bargaining, Report of the Committee of Experts on the Application of Conventions and Recommendations, 81st Session, Geneva, 1994, Report III (Part 4B), para. 246.