DEALING WITH THE UNION THING
Byline: Paul French
TORONTO — A union drive to certify a Wal-Mart store — for the first time ever — will be appealed, Wal-Mart Canada said Tuesday.
The organizing effort has sparked unionizing requests from other Wal-Mart sites, one in a border state, and could influence other American retailers’ decisions to set up shop in Canada, retail observers noted.
Marie Kelly, a lawyer for the United Steelworkers, said the union’s office in Toronto got a call from a Wal-Mart employee in the U.S. wanting to know more about the certification process. She declined to name the location.
“It could scare off other American chains from coming to Canada, and that would lessen the competitive environment,” said John Williams, an analyst with J.C. Williams Group Ltd., retail consultants here.
That could dampen the plans of J.C. Penney and Target, two chains that are eyeing the Canadian market, according to Richard Talbot, a retail analyst with Thomas Consultants International Inc. of Toronto.
A controversial ruling last week by the Ontario Labor Relations Board overturned a vote against unionization and awarded a Wal-Mart store in Windsor, Ontario, union certification. In handing down its decision, the OLRB cited interference by Wal-Mart and said management had threatened to close the store, which is just across the border from Detroit, if the unionization effort succeeded.
The issue has divided the 209 employees at the Wal-Mart store, and some of them have begun a petition campaign to call another vote. The campaign included a petition-signing effort in front of the Windsor store Tuesday.
A Wal-Mart spokesman said the Bentonville, Ark.-based company, which generates sales of about $100 billion annually, would welcome another vote at the Windsor store. He expressed confidence that the outcome would be similar to the 151-43 vote last May, which opposed certification by the United Steelworkers of America.
“The Labor Board decision is flawed and flies in the face of the wishes of our sales associates,” the Wal-Mart spokesman asserted. A manager at the Windsor store declined to comment and said employees were not available to discuss the issue.
The labor board contends that Wal-Mart breached codes of the labor act that prohibit coercion and intimidation of employees. It said Wal-Mart also engaged in practices that ran counter to the company’s policy of open communication with its staff, prompting legal observers to say the severity of the board’s decision to certify the store is a form of punishment to Wal-Mart for not living up to its own guidelines on employee relations.
Wal-Mart has two avenues of appeal.
The first is to get the OLRB to reconsider its ruling. This is possible if the board has made an obvious error of fact or if new information is brought forward. The OLRB has 30 days to review the Wal-Mart decision, which was made last Wednesday.
The second, more difficult, route is to go to the courts. A judicial review requires that the decision be “patently unreasonable” and legal observers told WWD Tuesday the courts are reluctant to interfere with labor board decisions.
Nonetheless, Talbot thinks there is room for an appeal.
“The harshness of the verdict suggests Wal-Mart is beyond all hope, and I don’t think that’s the case here,” he said.
In the meantime, Wal-Mart must attempt to negotiate an initial contract for its unionized workers at the Windsor store. If Wal-Mart finds its two avenues of appeal fall short, then a vote to decertify the Steelworkers as the bargaining agent for the Wal-Mart store would happen under the board’s supervision only if the union fails to obtain an initial contract. Even if that were the case, another vote would not be held for at least a year.
In the days leading up to the vote held last May, Wal-Mart parachuted-in company managers to circulate throughout the store and answer questions from the staff, according to the text of the 38-page OLRB decision issued late Friday. However, questions about whether the store would be closed if it were unionized were not answered, the decision said.
Wal-Mart also allowed an anti-union employee to speak at a staff meeting without distancing the chain from the speaker’s views. A pro-union spokesman was not allowed to address the same gathering, the OLRB stated.
These actions, the labor relations board said, went against employee rights to information.
“In our view, you cannot have it both ways,” the 38-page decision said. “If you adopt the approach of constantly soliciting questions in an environment such as was present in this case, you have to answer the questions asked or you do not circulate among the employees in the manner in which management did in this case.”
The OLRB concluded that a second vote would be “meaningless” because of the implied threat to job security.
The story has taken on a high profile and is the subject of Canadian talk radio programs and newspaper editorials, debating the fairness of unionizing a store where the majority of employees voted against the union.
For its part, the United Steelworkers said attempts by the Windsor employees to seek another vote will not change the outcome.
“A petition has no weight whatsoever in this case and won’t be reviewed by the board,” union lawyer Marie Kelly maintained. “Still, it’s not surprising staff members are signing the petition because it’s being carried out just outside the store under the watchful eye of management. We don’t view this as a meaningful indication of employees’ views.”
Employees are aware that Wal-Mart has a fundamental resistance to unions and had successfully fought them off since the firm was founded in 1962. When Wal-Mart entered Canada in 1994, it established a strong market presence by acquiring 122 Woolco stores, one of which became the Wal-Mart store in Windsor.
However, it did not pick up the nine Woolco units with union representation. It also distanced itself from unionized distribution and shipping contractors.
Wal-Mart insists it is not prepared to close the unionized store, one of two Wal-Marts in Windsor. Analyst Richard Talbot said such a shuttering wouldn’t be the first time this has happened in Canada, citing a grocery chain in the West that closed stores, had the union decertified and later reopened.
Analysts don’t expect one unionized store to have any impact on consumers.
“You’re not going to see higher prices because one store is union,” said Williams. “There might be less flexibility for shift work under the union, and that could affect the level of service at the store.”