By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
In February 2000, the meat-cutting department at a Wal-Mart Supercenter in Jacksonville, Texas, voted to join the UFCW. It marked the first time since the company was founded in 1962 that employees had opted for collective bargaining. The response from Wal-Mart was extraordinary. Rather than bargain with the employees, the company chose to eliminate all meat-cutting departments nationwide. In addition, four of the workers who'd voted to join the union were fired. Since then Wal-Mart has only sold pre-packaged meat.
The company's animosity toward organized labor is practically pathological. New hires are shown a video laying out the evils of collective bargaining and the company operates a 24-hour "union hotline" for managers to call if they detect union activity. At the first whiff of organizing, a team from corporate headquarters is dispatched to quell the uprising. Bernie Hesse, an organizer with UFCW Local 789 in South St. Paul, says that the fear of unions is so pervasive among employees that when he attempts to engage them in conversation their response is to simply stare at the floor. "That's a culture I've never seen before," Hesse notes.
Of course, Wal-Mart is far from alone in being virulently anti-union. In recent years, it's become a standard business practice to thwart organizing efforts by any means necessary, particularly at large retailers such as Target and Home Depot. But as the episode in Jacksonville shows, the characteristic that separates Wal-Mart from other companies is its willingness to employ incredible, drastic measures in order to ensure that labor costs remain as low as possible.
There are currently lawsuits pending in 25 states, including Minnesota, charging that Wal-Mart systematically deprived employees of overtime pay. In the first case to go to trial, in December 2002, a federal jury in Portland, Oregon, unanimously ruled that Wal-Mart was guilty of withholding overtime pay at its 18 stores in the state. A judge is currently deciding how much the company should pay in penalties. Other class-action lawsuits have not been as successful: In January a Florida judge dismissed a similar claim.
The Minnesota case was filed in Dakota County District Court in 2001 by four former Wal-Mart employees. They allege that the company engaged in "a scheme of wage abuse and fraud" and that employees were routinely required to work off the clock and denied breaks. "The managers are under these strict rules not to allow overtime," says Jonathan Parritz, the attorney representing the plaintiffs. "That forces these managers into these practices of basically [taking] time from the employees." On November 3, Judge Thomas Lacy issued an order certifying the class and allowing the lawsuit to proceed. It could potentially affect some 65,000 people who have worked at Minnesota Wal-Marts since 1998.
Failing to pay workers the wages they're due is not the only nefarious practice that Wal-Mart has been accused of in recent years. There have been dozens of complaints of sexual discrimination lodged against the company. According to figures Wal-Mart provided to the Equal Employment Opportunity Commission, 72 percent of the company's employees are female, but two-thirds of management positions are held by men. In addition, female employees make, on average, 34 cents less an hour than their male counterparts in identical positions. In December 2002, the company agreed to pay $220,000 to a Phoenix woman who'd been turned down for a job because she was pregnant. Last September, Wal-Mart settled another lawsuit by shelling out $150,000 to a Dallas employee who allged she was punished after complaining of sexual harassment by a bakery manager.
Those payouts pale in comparison to what could be in store for Wal-Mart, however. In 2001, a class-action, sexual-discrimination lawsuit was filed in the U.S. District Court in northern California by six female employees. If the class is certified, it could become the largest such suit ever, potentially affecting 2.5 million women who have worked for the company.
But perhaps nothing has damaged Wal-Mart's wholesome, all-American reputation like the revelation that it relies on scores of illegal immigrants to clean its stores. In October, federal agents raided 60 Wal-Mart stores in 21 states and picked up more than 250 illegal immigrants. This followed similar raids in 1998 and 2001 that netted a total of 102 illegal workers. The employees had been hired by outside companies that the retailer contracts with for cleaning services. Following the October arrests, workers complained that they were denied overtime pay, rarely allowed time off, and paid as little as $2 a day. Nine of the former cleaners have filed a racketeering lawsuit against Wal-Mart in New Jersey State Court charging that their civil rights were violated. Wal-Mart has repeatedly insisted that it had no idea illegal immigrants were being employed to clean its stores.
Stacy Mitchell argues that this explanation doesn't make sense, considering Wal-Mart's reputation for exacting control, right down to setting individual store temperatures. "They can tell you how many tubes of Crest toothpaste were sold at store number 851 yesterday and yet they claim they had no idea that their contractors were using illegal immigrants and mistreating them?" Mitchell asks.
Wal-Mart's most profound impact on the labor market, however, has nothing to do with how the company treats its own workers. Because the retailer wields such tremendous buying power and controls such a large share of the market for so many products, it exerts incredible influence over suppliers. Companies need to do business with Wal-Mart in order to survive. Therefore they have little choice but to accede to the retailer's demands for lower and lower prices. In turn, pressures like these lead manufacturers to look for cheaper labor overseas, often under wretched working conditions. A recent story in the Washington Post detailed how workers at Chinese manufacturing plants that supply Wal-Mart are paid as little as $75 a month and sometimes work upward of 80 hours per week. Allegations of child labor abuses are rampant.