Developing Diagnostic and Analytical Skills

“SAVE MONEY. LIVE BETTER”—WAL-MART AND UNIONS INTERPRET THE SLOGAN DIFFERENTLY

 

People might be surprised to learn that historically anti-union retailer Wal-Mart does have stores with active unions. They are not in the U.S., though; they are in China and Canada.

Wal-Mart workers in the United States haven’t met with much success as they try to organize unions. Wal-Mart, like many employers, resent having a union as a third party representing workers to negotiate for working conditions, benefits, and com- pensation. A handful of meat cutters in the Jacksonville, Texas, store voted to join the United Food and Commercial Workers (UFCW) in 2000, but their affiliation was short lived. Within weeks, Wal-Mart closed the meat cutting operations in 180 stores in six states, including Texas, switching to prepackaged meat. Wal-Mart denied that the union membership had anything to do with the move.

Canadian Wal-Mart workers haven’t had much more success. In late 2008, Wal-Mart workers in Hull, Quebec, and Weyburn, Saskatchewan, won the right to representation by the UFCW. If his- tory is any guide, they won’t be dues paying members for long. In 2005, Wal-Mart announced the closing of their store in Jonquiere, Quebec, just two months after workers voted to be represented by the UFCW. Wal-Mart explained that the store had struggled finan- cially since it’s opening, but a survey by Pollara Inc., Canada’s largest polling organization, found that only 9 percent of Canadians believed that Wal-Mart closed the store for financial reasons.

Chinese Wal-Mart workers have found union membership much easier. The All-China Federation of Trade Unions (ACFTU) is a monopoly with 170 million members and is controlled by the Communist Party. In the face of a union so much more powerful than those in the United States and Canada, Wal-Mart agreed to ACFTU representation in several cities in China. Workers will receive 8 percent pay raises each year for the next two years. The ACFTU is generally seen as much friendlier to management than unions in other parts of the world.

Are U.S. Wal-Mart workers getting any closer to union represen- tation? Possibly. Proposed legislation called the “Employee Free Choice Act” (EFCA) would make unionization faster and easier by allowing union representation if over 50 percent of the employees sign a card indicating that they want to join. Presently, companies can demand a secret ballot, slowing the process. In the fall of 2008, Wal-Mart Human Resource managers reportedly alerted store managers and supervisors that if Barack Obama were elected president, that it was likely that the “Employee Free Choice Act” would sail through congress and be quickly signed by Obama. David Tovar, a Wal-Mart spokesman, is quoted as saying “We believe EFCA is a bad bill and we have been on record as opposing it for some time. We feel educating our associates about the bill is the right thing to do.” Some managers present at the meetings interpreted HR’s remarks to endorse John McCain, Obama’s opposition in the 2008 election. Federal election laws allow companies to advocate specific political candidates to management, but not hourly workers. The supervisors who attended the meetings were hourly workers, but the managers were not.

Questions:

 

Provide a brief overview of the case scenario and respond to all discussion questions. Conclude by sharing your own thoughts and opinions regarding issues presented in the case.

1. What are the advantages and disadvantages to Wal-Mart of working with unions?

2. Explain the advantages and disadvantages of union member- ship from the employee perspective.

3. Explain the consequences of Wal-Mart’s efforts to slow or stop union representation in the United States.

4. Which laws regulate the activities of Wal-Mart and the employees in the organizing efforts? Do you believe Wal-Mart is ethical in its efforts to stop the unions?