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IX. When Wal-Mart’s Strategy to Defeat Union Organizing Fails

Wal-Mart’s sophisticated and aggressive strategy to defeat union formation is almost always successful.  Human Rights Watch has uncovered only one case since Wal-Mart’s inception in 1962 in which workers at a US store have organized.  On February 17, 2000, meat cutters at the Jacksonville , Texas, Wal-Mart voted seven to three in favor of a union.⁶⁰⁰  That case illustrates how Wal-Mart responds when it fails to prevent worker organizing and the tactics the company implements to continue to stifle union activity.

Illegal Refusal to Bargain: Jacksonville, Texas

Less than a week after the meat cutters at the Jacksonville, Texas, Wal-Mart organized in February 2000, Wal-Mart began announcing that all Wal-Mart stores serviced by the Temple, Texas, distribution center, including the Jacksonville store, would phase in pre-cut, pre-packaged, case-ready meat and be selling only case-ready meat by August 2000.⁶⁰¹  When the switch was completed, the affected stores’ meat cutting departments would be eliminated and meat cutters would be reclassified as sales associates in the new meat and deli departments.  The move would destroy the Jacksonville meat cutters’ bargaining unit.

Wal-Mart also refused to recognize or negotiate with the meat cutters’ union, denied them information they had requested for bargaining purposes, and refused to bargain over the decision to switch to case-ready meat or the impact that that switch would have on the meat cutters.⁶⁰²  The union responded by filing unfair labor practice charges against Wal-Mart on behalf of the meat cutters, claiming the company had acted illegally.  In addition to the charges addressing Wal-Mart’s refusal to recognize and bargain with the union, the union also charged that the switch to case-ready meat itself was illegal because it interfered with workers’ right to organize and deterred Wal-Mart workers across the country from organizing.  The union also alleged that Wal-Mart illegally accelerated the switch to target stores where organizing drives were underway. 

The NLRB general counsel found merit to the charges, but the NLRB administrative law judge hearing the case only partially agreed.  The judge held that Wal-Mart legally closed the meat department and was not obliged to bargain with workers over the decision to close because the company had decided to move to case-ready meat long before union organizing at the Jacksonville store began and did not speed up the move to target stores with union activity.⁶⁰³  The judge found that the company had acted illegally, however, when it failed to recognize and negotiate a contract with the union, share requested information with them, and bargain over the impact of the switch to case-ready meat.⁶⁰⁴ 

Both sides appealed.  On September 28, 2006, roughly 6.5 years after the Jacksonville meat cutters formed a union and over three years after the NLRB administrative law judge’s decision in the case, the five-member NLRB ruled on the appeals.  The Board narrowed the judge’s ruling against Wal-Mart.  The NLRB held that the company was required to negotiate over the effects of the switch to case-ready meat and provide the union the information it had requested but reversed the ruling that Wal-Mart illegally failed to recognize and bargain a collective agreement with the union.⁶⁰⁵ 

The union has appealed to the District of Columbia Circuit Court, and Wal-Mart has filed a motion for reconsideration with the NLRB.⁶⁰⁶  The litigation continues, and Wal-Mart has yet to negotiate with the union.  As the UFCW executive vice president and organizing director observed with frustration, “In [Jacksonville] Texas, we did everything right, but we [still] didn’t get a contract.”⁶⁰⁷

Illegal Store Closure: Jonquiere, Quebec, Canada

On August 2, 2004, the Quebec Labor Commission certified UFCW Local 503 as the bargaining representative for the workers at the Jonquiere, Quebec, Canada, Wal-Mart store.⁶⁰⁸  Less than nine months later, the store was closed.  The store was not the first nor the last at which Wal-Mart workers in Canada successfully organized, but the closure marked the first and only time that Wal-Mart has shut any of its Canadian stores since entering the country in 1994.⁶⁰⁹  

In October 2004, before collective bargaining had even begun but after union formation, Wal-Mart issued a public statement that “[t]he Jonquiere store is not meeting its business plan, and the company is concerned about the economic viability of the store.”⁶¹⁰  Contract talks nonetheless began roughly two weeks later and lasted for about three months.⁶¹¹  On February 1, 2005, however, the union broke off negotiations and requested binding first-contract arbitration, as permitted by the Quebec Labor Code.⁶¹²  The Minister of Labor granted the union’s request on February 9.  That same day, Wal-Mart announced that it would close the Jonquiere store on May 6, 2005.⁶¹³  The store closed on April 29, 2005, one week early.⁶¹⁴  

The union described the closing as anti-union “interference and intimidation” that was “certain to have a negative effect on organization campaigns at other [Wal-Mart] establishments.”⁶¹⁵  Wal-Mart disagreed.⁶¹⁶  Vice president of corporate affairs for Wal-Mart Canada Corporation Andrew Pelletier explained, “[W]e’ve been unable to reach an agreement with the union that in our view will allow the store to operate efficiently and profitably. . . .  In our view, the union demands failed to appreciate the fragile conditions of the store.”⁶¹⁷  Pelletier told Human Rights Watch:

The store wasn’t profitable at the time. . . .  What the union was demanding . . . was driving a wedge in the business model.  We thought the union was trying to fundamentally change the business model.  We bargained . . . with the union [in] numerous meetings to try to agree to a contract because we did not want to close the store. . . .  [Closing] was the toughest thing we’ve ever had to do, . . . but at the end of the day, there is not a business in the world that under the same circumstances, . . . would not have done the same thing.⁶¹⁸

Pelletier added, “If it were just about shutting the store [to eliminate the union], we could have shut when the union became certified.”⁶¹⁹  Instead, the company announced store closure only after “attempting to convince the union to agree to a contract that would allow the store to be viable.”⁶²⁰  Nonetheless, the store closure announcement also came immediately after Wal-Mart learned that the company and the union would be required to submit to binding first-contract arbitration, which could yield a labor contract with terms and conditions running counter to the company’s “business model.” 

Jonquiere workers who lost their jobs when the store closed filed seventy-nine complaints against Wal-Mart with the Quebec Labor Relations Commission, arguing that the store closure was illegal because it was done “to interfere with the employees’ right of association.”⁶²¹  The commission began by hearing four of the seventy-nine complaints.⁶²²  On September 15, 2005, it upheld three of the four, finding that Wal-Mart failed to show a “just and sufficient” cause for the dismissal of the workers.⁶²³  Explaining the ruling, Pelletier told Human Rights Watch, “The Labor Commission ruled that the closure of the store was retaliation against unionization.”⁶²⁴  Wal-Mart appealed, but on July 13, 2006, the Quebec Superior Court upheld the Labor Relations Commission decision.⁶²⁵  Wal-Mart appealed again.  Pelletier explained, “We are appealing . . . because we did not close the store in retaliation.”⁶²⁶  

Impact on US Workers

Many Wal-Mart workers across the United States with whom Human Rights Watch spoke were aware that Wal-Mart closed its Jonquiere store and believed the company did so because the workers had formed a union.  This widely shared belief among US workers, regardless of the company’s true motivation for the store closure, shows the far-reaching effects of Wal-Mart’s success in creating an intimidatingly anti-union work environment.  And worker interpretations about what happened in Jonquiere in turn have further stymied organizing efforts at US stores.

A Las Vegas, Nevada, Sam’s Club worker commented to Human Rights Watch, “Look at what they did in Canada.  Just for spite, they could close down the whole store.”⁶²⁷  Another Las Vegas Sam’s Club employee recounted, “Every morning [we would] have information meetings. . . .  They forced every area to go. . . .  Associates would bash the union.  [They were] under the impression that [the company would] close the club, and apparently [they’ve] done it in Canada. . . .  Management would stand back and not get involved and let it happen.”⁶²⁸  

Similarly, when Human Rights Watch asked an Aiken, South Carolina, Wal-Mart worker why workers at her store did not attempt to organize again after their failed efforts in 2001, she replied, “I think because everyone is scared, and with the union going into that store in Canada and it closing, that didn’t help either.”⁶²⁹  A department manager at the Aiken store added:

They will close the store before they allow the union.  They did that in Canada, and they rub it in our faces.  There is a shadow box [a box with a glass door in which announcements are posted] that they keep under lock and key.  This started during the union [campaign]. . . .  When the Canada store closed, they announced [via the shadow box] that it had closed. . . .  It was their subtle way of letting you know that this is what happens to stores if they get a union.⁶³⁰

Three Wal-Mart workers in Colorado had similar thoughts.  One noted, “They said the reason the [Jonquiere] store closed was not because of the union but because the store was not showing a profit. . . .  We didn’t believe them. . . .  We thought it closed because of the union.”⁶³¹  Another worker added, “They said the store was unprofitable, but I was just thinking, ‘It was Wal-Mart.  I doubt it was unprofitable.’ . . .  The associates thought it was because of the union.”⁶³²  A third worker noted, “In our anti-union meetings only for TLE, someone, an associate, asked what happened to the store in Quebec.  The response was that the store was not profitable. . . .  We suspect [it was] because of the union.”⁶³³