Walmart vs. Union-Backed OUR Walmart
By Susan Berfield on December 13, 2012, Businessweek
http://www.businessweek.com/articles/2012-12-13/walmart-vs-dot-union-backed-our-walmart
Cindy Murray has been working at Walmart store No. 1985 in Laurel, Md., for 13 years. She’s
stationed in the fitting rooms and earns $12.40 an hour. Murray, who’s in her fifties, says she
loves her job. She thinks of herself as a model employee. She also helped start OUR Walmart, or
Organization United for Respect at Walmart, the group of employees who defied one of the most
powerful companies in America by holding protests at about 1,000 stores on the busiest day of
the year for retailers. OUR Walmart says it has at least 4,000 members. The protests, on the
Friday after Thanksgiving, involved about 500 of them, as well as many thousands of others
sympathetic to their cause. Murray and her colleagues are asking Wal-Mart Stores (WMT) for
more full-time jobs with predictable schedules instead of part-time work with hours that can
change every three weeks—and wages that can provide their families a decent life. They also
want respect.
Photograph by Christopher
Leaman for Bloomberg BusinessweekOUR Walmart member Cindy Murray in Maryland
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On the morning of Nov. 23, instead of going to work, Murray put on her bright green OUR
Walmart T-shirt and boarded a bus provided by the United Food and Commercial Workers
Union, which has tried and failed to unionize Walmart associates for more than a decade.
“Walmart isn’t on a good path, and someone needs to stand up and speak out,” says Murray.
“But we always have fear inside of us, too.” They weren’t sure how many police would be
present or if shoppers would support them. They weren’t sure if afterward their hours would be
cut or if managers would make their lives difficult. None of them could afford to lose their jobs.
Murray was one of several hundred people, employees and activists and community leaders, who
met at a store in nearby Hanover, Md. She helped lead chants, including “Stand up! Live better!”
a play on Walmart’s slogan, “Save money. Live better.” They sang and marched for a couple of
hours, then moved on to another store. At 7 a.m. on Saturday, she punched in for her regular
shift.
Walmart is the largest private employer in the U.S., with nearly 1.4 million workers in 4,602
stores. The company operates in 26 other countries, employing an additional 780,000 people. Its
efficiency, in stores and throughout its supply chain, has remade the retail industry. When
Walmart decides to sell mortgages, local produce, or compact fluorescent light bulbs, the effects
ripple through the economy. So do its decisions about workers’ schedules, wages, and benefits.
With revenue of $464 billion over the past year, it’s the biggest company in the U.S.
As it has expanded, Walmart has been vilified by activists and watchdog groups who say the
company’s relentless growth has come at the expense of its workers, the environment, and the
law. Since 2005 it has agreed to pay about $1 billion in damages in six different cases related to
unpaid work. The U.S. Department of Justice and the Securities and Exchange Commission are
investigating allegations of corruption by company executives in its Mexican subsidiary,
Walmart’s biggest, and a potential coverup by executives at its headquarters in Bentonville, Ark.
Walmart says it’s cooperating with the investigations and is conducting its own internal
investigation and review.
Last month more than 100 workers died in a fire at a factory in Bangladesh that was sewing
clothes for several retailers, including Walmart. The company says it was unaware its supplier
had sent work to the factory and has fired the firm. According to Bloomberg News, the previous
year Walmart had declined to sign an agreement among retailers to pay their suppliers to
improve safety conditions at Bangladeshi factories. Walmart said it would be too expensive.
Walmart has survived labor fights before. But Murray and a core group of about 100
employees—along with the largest union of retail employees in the country and a branding firm
founded by a top adviser to President Obama—are the architects of what may prove to be the
most potent challenge yet. Crucially, the thousands of associates who have joined OUR Walmart
say they’re not agitating for legal recognition or collective bargaining rights; unlike previous
efforts, they’re not trying to unionize. They say they want to make Walmart a better place to
work and shop. “It’s a cause that affects every American,” says Murray.
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There’s also growing financial pressure. Walmart wants to expand into big cities where its size
and power are controversial. Elected officials, community leaders, and residents often see the
company as a disruptive economic force and a socially dubious one as well. “A business case can
be made that it would be smart for them to figure out a way to improve the situation for their
workers so that OUR Walmart is an ally, not an opponent,” says Ken Jacobs, chairman of the
University of California at Berkeley Labor Center. Or it could continue to dismiss OUR Walmart
as a small group of disgruntled associates who speak only for themselves and their union
backers. Despite the organization’s success in attracting attention to the Black Friday strikes, less
than one-tenth of 1 percent of the company’s U.S. workforce participated. What’s certain is that
Walmart’s management is facing a new kind of unrest at a time when it’s already vulnerable.
Says Julius Getman, a labor law professor at the University of Texas School of Law: “This is a
battle for the soul of Walmart’s workforce.”
Walmart has been opposed to unions since Sam Walton opened his first store in Rogers, Ark., in
1962. These days, “we have human resources teams all over the country who are available to talk
to associates, and we will get questions about joining a union,” says David Tovar, a spokesman
for the company. “We would say: ‘Let us remind you of all that Walmart offers, and of what
might go away. Quarterly bonuses might go away, vacation time might go away.’ ”
Tovar says the company is proud of the jobs it offers, that its benefits are affordable and
comprehensive, and that there are plenty of opportunities for associates to advance. Walmart has
more employees working full-time than its competitors do, he says, and a lower turnover rate.
“The suggestion that the issues OUR Walmart is raising are widespread or representative of any
sizable number of associates is ludicrous,” he says. “We know this because we have hard data.
And we know this because our managers and executives are in our stores every day asking
associates questions. They believe what they’re getting at Walmart is a good deal.”
In a rare public appearance at the Council on Foreign Relations in New York on Dec. 11,
Walmart Chief Executive Officer Mike Duke, interviewed by Bloomberg LP CEO Daniel
Doctoroff, dismissed the idea of a rift between Walmart’s employees and management. “The
characterization is not always accurate,” he said. “This tension for me is not a tension.”
Murray’s campaign started six years ago. Backed by the UFCW, and a coalition it called “Wake
Up Walmart,” Murray tried to get workers in her store to join the union. She didn’t get far. “We
knew we had to do something different this time,” she says. “The organization had to be made by
associates and for associates so they would feel more free to join.”
Organizers at the UFCW felt the same way. In 2010 the union hired a veteran labor leader, Dan
Schlademan, to be the director of “Making Change at Walmart,” a campaign it had just launched.
“We needed to build something new,” says Schlademan. He connected with Murray and a few
other Walmart employees and then turned to ASGK Public Strategies, the media and branding
firm started by David Axelrod, a senior political adviser to President Obama. (Axelrod had sold
his stake by 2010.) “There is a permanent political campaign around the legitimacy of Walmart
on both sides,” says Nelson Lichtenstein, a history professor at the University of California at
Santa Barbara and author of The Retail Revolution: How Wal-Mart Created a Brave New World
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of Business. “Walmart hires operatives who are in and out of political campaigns. Unions enlist
the hottest political consultants around.”
On its side, Walmart had Leslie Dach, who had been a strategist in several Democratic
campaigns and a vice chairman at public-relations firm Edelman. Dach was hired in 2006 in part
to improve the company’s reputation, especially with liberal politicians and shoppers. By 2010
the company had reduced waste and energy use, tried to offer more affordable health insurance,
and had supported Obamacare. At an analysts’ meeting that October, Dach said: “I think the
numbers clearly show that customers and elected officials like us better. … And that makes it
easier for us to site stores, makes it easier for us to stay out of the public limelight when we don’t
want to be there.”
In the fall of 2010, ASGK began conducting opinion research about how to effectively reach
Walmart employees. The firm declined to comment on its work, but as a former executive
described it, they realized that buying an ad on Facebook (FB) would allow them to target users
who had identified themselves as Walmart employees. There were about 150,000 of them. Then
ASGK asked the employees to rate themselves according to how committed they were to
Walmart. It focused on the group in the middle: dedicated employees with a couple of
complaints. Chief among them was that they weren’t treated with respect by their managers.
Second was their pay.
“ASGK was good at getting to the heart of what really was important to people,” says
Schlademan. The firm helped name the movement and craft a logo that looks like the OK hand
sign. “Three employees have it tattooed on their arms,” he says.
OUR Walmart had a brand. Now it needed more leaders. Maggie Van Ness was an overnight
stocker at store No. 1563 in Lancaster, Calif., when she heard about the group from a UFCW
representative. In the fall of 2010, Van Ness and another employee began holding meetings at a
cafe every Friday, telling their co-workers about the new movement. For a couple of months,
they went to the Los Angeles union hall every other week for training. “The union was very good
at teaching us what we could and couldn’t do,” says Van Ness, who left the company earlier this
year for health reasons. “They stood behind us and pushed in the right direction.”
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Photograph by Ryan Lowry for
Bloomberg BusinessweekOUR Walmart member Mary Pat Tifft in Wisconsin
Mary Pat Tifft, from store No. 1167 in Kenosha, Wis., joined the organization in the spring of
2011 and quickly emerged as an effective spokeswoman. Tifft, who’s 57, has worked for
Walmart for almost 25 years. She says she was a contented employee until 2005, when union
organizers got hold of a memo from a Walmart executive to the board of directors. The memo
proposed ways to hold down spending on health care and other benefits without damaging
Walmart’s reputation. It suggested capping pay, discouraging unhealthy people from applying,
and expressed the company’s frustration that workers with seniority made more than new
employees but were no more productive. “Reading that tells you how they feel about associates,”
says Tifft. “It was degrading.” Tifft makes $19.96 an hour, the most she can earn without moving
into management, which doesn’t interest her. Others in her store don’t make enough to support
themselves, she says, and rely on the local food pantry that Walmart takes pride in contributing
to. “Everyone always banked on the fact that Walmart would have your best interests at heart.
But it’s not true,” she says.
In June 2011, OUR Walmart made its debut. At the UFCW’s expense, Murray, Van Ness, and
Tifft, along with 97 other associates, traveled to Walmart’s headquarters a couple of weeks after
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the company’s annual shareholder meeting. They wrote a 12-point declaration that asked for
wages and benefits that ensured no associate would have to rely on government assistance. They
also called for dependable schedules, expanded health-care coverage, and the freedom to speak
up without facing retaliation. In the parking lot, they presented the document to Karen Casey, the
senior vice president for global labor relations. “It was really scary,” says Murray. “I think the
executives were just as shocked as we were. Walmart heard us, but they didn’t listen.”
Photograph by Ryan LowryOUR
Walmart protesters take part in a Black Friday demonstration in Chicago
The Bentonville trip was the first time many OUR Walmart members met face to face. “I was so
taken aback listening to other associates’ stories,” says Tifft. “It made me want to speak louder.”
The first discussion about holding protests on a Black Friday began then. At a hotel conference
room, Schlademan set up computers for associates to learn how to use Facebook to stay in touch
and reach other potential members.
During the next year, union organizers and employee leaders worked on recruitment. Van Ness
says she signed up 25 employees at her store, about 10 percent of the staff. Murray says there are
40 members at her store, though most are silent. Monthly dues are $5.
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OUR Walmart returned to Bentonville in June 2012 for the annual meeting, which coincided
with Walmart’s 50th anniversary. The group had proposed a shareholder resolution calling for
greater disclosure about incentive pay for executives, spurred by allegations in the New York
Times that top executives in Bentonville covered up evidence from Walmart’s own investigation
into accusations of bribery in Mexico. Schlademan had found experts to help Tifft and three
others, all shareholders, craft the resolution. Then he got them a lawyer when Walmart tried to
have it removed from the ballot.
In front of about 16,000 people, Proposal 6 was read aloud: “We have cut costs too far, stores are
understaffed and associates cannot provide customers the service that Sam Walton built the
company on and that we are proud to provide. … Sam Walton said, ‘Listen to your associates,
they are your best idea generators.’… There has to be a new relationship based on honesty, based
on trust, based on respect.” The auditorium was full of cheers; Tifft looked stunned. The
resolution, supported by Institutional Shareholder Services, a leading proxy advisory group, won
about 9 percent of the vote. The Walton family controls almost half of the shares in the company.
As the holiday shopping season approached, several dozen employees at warehouses that serve
Walmart walked off the job in California and Illinois to protest what they said were poor
working conditions. Then, in early October, OUR Walmart staged its first strike, in Pico Rivera,
Calif. From there, some members went to Bentonville for the annual meeting for analysts. They
stood in the parking lot, chanting: “We do not get enough hours. We cannot take care of our
families.” Later, Colby Harris, who’s 22 and works in the produce department in a Walmart in
Lancaster, Tex., led a dozen or so people to Walmart’s first store. The group collected water
jugs, buckets, trash cans, cooking utensils. They found a rhythm and began chanting, “What do
we want? Respect! When do we want it? Now!” Says Harris: “I think we caught the managers
off guard. It was exhilarating.”
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Photograph by Ryan Lowry for
Bloomberg BusinessweekOUR Walmart member Colby Harris in Texas
At the meeting itself, Walmart noted how well it treats its associates. The company had already
issued guidelines to store managers about how to respond to walkouts or work stoppages on
Black Friday. “We wanted to ensure we provided the safest possible shopping environment for
our customers,” says Walmart spokesman Tovar. The company also engaged in its own workers’
campaign. “If OUR Walmart people are in a store trying to talk to associates about joining a
union, we do educate them about what it would mean,” he says.
Acknowledging their existence proved Walmart was paying attention. “That was a tactical
mistake,” says Lichtenstein of UC Santa Barbara. “That ratified the importance of the protests.”
Murray agrees: “It was a great recruiting tool.” She and other leaders spoke to associates
afterward, explaining that despite Walmart’s assertions, their group is not trying to form a union.
“Right now that’s not even a topic of conversation,” says Tifft.
On the Monday evening before Thanksgiving, Tovar told CBS News that the protests were
“another union publicity stunt.” He added: “If associates are scheduled to work on Black Friday,
we expect them to show up and to do their job. And if they don’t, depending on the
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circumstances, there could be consequences.” As encouragement, Walmart offered associates an
additional 10 percent discount if they worked the full day. (They are normally entitled to a 10
percent discount.) “Some people might call that an incentive,” says Tifft. “I call it a bribe.”
On the day of the protests, Tovar issued a statement accusing the UFCW of exaggerating the
scope of the demonstrations. “We had our best Black Friday ever,” he said. A week later, though,
Walmart felt compelled to again counter the perception that its employees were in revolt.
Michael Bender, the president of Walmart West, wrote an op-ed in the San Francisco Chronicle
with the headline, “Our workers love their jobs.” “I want our associates to know we have their
backs,” he wrote.
Cindy Boyd has been a full-time associate at a Walmart in Glendale, Calif., for the past 15 years.
Her husband and son work there, too. She doesn’t support OUR Walmart. “I feel like, if they’re
not happy, maybe it’s not the right fit for them,” she says. “They shouldn’t bash the company
that feeds them.” Shirley Jeanine Clem says she thought the protests were silly and unnecessary.
She’s been working at a Baytown (Tex.) store for nine years and was among the women
reimbursed after the company found they had been paid less than men for the same work. “As a
caring mother, I do not hesitate to tell my daughters to work for Walmart,” she says.
OUR Walmart’s decision to create a new kind of organization makes it a less predictable
adversary than the company is used to. Yet it’s hard to assess if the group will achieve its goals
without the legal protections that come with union recognition. “Walmart has the advantage of
money and power, but these things can be overcome,” says Getman of the University of Texas.
“The very fact that the situation is unusual gives an advantage to OUR Walmart.” The group has
gotten Walmart’s attention. Beyond that, it may be years before it’s possible to assess its impact
on the company.
Meanwhile, Walmart has filed a complaint with the National Labor Relations Board claiming
OUR Walmart has been organizing without seeking union recognition. The UFCW is reviewing
more than 100 allegations of workers’ rights violations by Walmart and has promised to continue
supporting OUR Walmart as long as the group needs help. “Everything will be building toward
an even bigger Black Friday 2013,” says Schlademan.
“I’m pretty sure Bentonville knows that we’re here to stay,” says Murray. “I’m not going
anywhere. I’m not backing down.”
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