Walmart Faces Blowback Over Anti-Labor Agenda

(AP Photo)

Walmart may be the place where you “save money” on all sorts of products, but the idea that its employees can “live better” just doesn’t add up. And those concerns over how the world’s largest company treats the employees that have built its ubiquitous brand is beginning to hit Walmart’s bottom line.

Questions over labor practices have dogged Walmart for decades, with activists and company employees seeking major changes in how the retail giant treats its workers in categories from low pay to anti-union activities. Corporate spin and an effort to rehabilitate the store’s public image notwithstanding, Walmart has done very little to make wholesale changes because very little has ever been on the line for the corporation when it comes to questions over labor conditions.

Things may be beginning to change, however, as investment capital begins flowing out of the company specifically because of its treatment of employees.

Last week, the largest pension fund in the Netherlands and a major Walmart investor announced that it would pull out its $121 million investment in the company due to Walmart failing to rectify concerns the fund’s managers had over labor practices. Recent attempts at conciliation with critics of its business model were “not enough” to satisfy the Dutch fund.

A major pension fund and longtime investor in Walmart has blacklisted the retailing behemoth, citing poor labor practices and the company’s anti-union stance as the driving force behind its rejection.

Walmart typically shrugs off criticism of its labor practices as union-driven propaganda and insists that its employees are happy and well-managed, but investing experts say that when one of the largest pension funds in the world divests, the company would be wise to listen to the message. It’s the same message the American labor movement has been pushing for decades.

On Tuesday, the Netherlands’ biggest pension fund, Algemeen Burgerlijk Pensioenfonds, with more than $300 billion in assets, announced that it was blacklisting the largest retailer in the world for noncompliance with the United Nations’ Global Compact principles. The Global Compact presents a set of core values relating to human rights, labor standards, the environment and anti-corruption efforts. Sixteen other companies were blacklisted along with Walmart, nearly all of them excluded for producing chemical or nuclear weapons that violate the Nuclear Non-Proliferation Treaty.

ABP said on Wednesday that the decision to pull its investment from Walmart was not hasty. The fund declined to say how much money is involved, but according to ABP records, it had invested some 95 million euros, worth $121 million today, in U.S. Walmart stores as of June 30, 2011. The fund first sent a letter to Walmart executives in 2008, a year after ABP formalized its responsible-investing policy. Four years later, after many meetings with employees and all levels of management, ABP concluded the retail giant was still falling short.

Back in 2007, as ABP began to comb through its investments with an eye toward corporate responsibility, the fund was struck by the staggering number of lawsuits and National Labor Relations Board complaints against Walmart, explained Anna Pot, a senior sustainability specialist involved in the decision.

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“There has been a change, but in the end we had to conclude that it was not enough,” said Pot. “We felt that if the workers are not happy, then what does it mean for the company?”

Anger over Walmart’s perceived social irresponsibility has migrated from what some would derisively call “tree huggers” to some of the leading investment firms in the world. Divesting from Walmart has grown in recent years, with Norway’s government investment fund dropping its $400 million stake in the company in 2006.

Walmart has faced criticism over everything from its lack of environmental awareness to its lack of compassion for local businesses failure of community outreach in planning new stores. Critics have noted that the company has made strides in many facets of its business, taking into account the criticism and changing its operations to at least deflect the voices of opponents.

But one area that Walmart has been unquestionably blind to growing disgust with the company is in terms of  labor practices and how it treats the more than 1 million Americans that work at Walmart, from its stores to its mass of distribution centers. As Walmart remains under fire for its behavior, more financial consequences could be looming.

Bitter and intractable opposition to widespread attempts to organize various sectors of Walmart’s massive employee base has led to escalating conflicts with labor activists and increasingly disgruntled workers. The heart of the corporation’s reputation for unfair labor practices lies with its refusal to compromise with employees seeking to organize in order to secure the basic rights they say are being denied to them as Walmart employees.

Agitation for employee rights have been brought straight to Walmart’s corporate doorstep in Arkansas, where current and former employees recently held a protest asking for the right to unionize. The company refused, and threats of arrest quickly followed.

In October two shabby buses filled with Walmart employees stopped unannounced outside the company’s headquarters in Bentonville, Arkansas. As the employees filed into the building’s expansive parking lot, plainclothes private security personnel sporting sleek sunglasses and Walmart emergency response badges rushed in and swiftly corralled the employees onto a public sidewalk. Members of a new union-backed campaign to organize Walmart, the workers had come from around the country to ask Walmart’s CEO, Mike Duke, for better wages and better treatment.

The hoped-for meeting was not granted. Within minutes, a dozen Bentonville police officers rushed in to reinforce the security guards in forming a barricade between the employees and their headquarters’ front door. A labor relations representative emerged from the mostly windowless building. She announced that she would meet only with workers who carried Walmart employee discount cards in addition to their company badges and state IDs. Without discount cards, the protesting employees would be arrested.

“I didn’t come here today to go shopping, so why do I need my discount card?” said Girshriela Green, a young mother who until recently worked at Walmart in Southern California. “I feel totally disrespected. Shame on them for not having the common decency to sit down and talk to their own associates.”

Even as Walmart retains its intransigence on the issue of employee treatment and  union labor, loose organizations of company employees and labor allies have been popping up across the country. Pressure on Walmart from its employees and from outside the company has never been more intense in regards to questionable labor practices the the retailer.

New stories of Walmart’s mistreatment of employees and the lack of accountability at the company have kept alive the hopes for eventual victory by labor activists. Contractors used by Walmart for shipping operations are facing a class-action lawsuit from workers at Walmart warehouses in Illinois and California alleging a litany of abuses ranging from skimming their paychecks to being forced to work overtime without pay.

Meanwhile workers in Walmart’s warehouses in Chicago and southern California charge that the logistics companies contracted by the mega-retailer are nickel-and-diming them, shaving dollars off their hourly wages as temporary workers and obscuring the practice by failing to give them accurate pay stubs.

On November 19 the group Warehouse Workers for Justice helped workers file their fourth class action lawsuit since 2009 against companies that operate Walmart warehouses in the Chicago area.

This lawsuit charges that at least 18 workers at a warehouse in suburban Elwood realized once they were paid that they got less than promised and in fact less than minimum wage from the company Eclipse Advantage. This week workers marched to Eclipse offices demanding its billing and payment records so they can figure out exactly how much they are owed.

Walmart executives repeatedly defend their practice of not recognizing the right to unionize for its employees or other demands from its million-plus workforce in the United States. But this rhetoric fails to match the company’s labor record outside of this country.

Walmart has fought every attempt by its employees to organize inside the US and Canada, but most of its stores and operations abroad are staffed by union workers with labor-friendly contracts.

Walmart operations in the United Kingdom, China, South Africa and South America are covered by organized labor groups in those countries. Recognition of the right to unionize is required by law in China, where Walmart is expanding at a rapid pace.

Walmart executives fail to acknowledge the difference in labor practices, but union leaders that are working with the company are starting to make a push for Walmart to adopt universal labor practices that cover all of its employees — even those in the United States.

Its employees are not unionized in the United States, where the retailer has become infamous for its staunch opposition to labor groups. Even in Canada, it closed a store after workers there organized. But in the United Kingdom, Wal-Mart touts a growing roster of union employees and has negotiated contracts with entrenched labor groups in Brazil and Argentina for decades.

“We recognize those rights,” said John Peter “J.P.” Suarez , senior vice president of international business development at Wal-Mart. “In that market, that’s what the associates want, and that’s the prevailing practice.”

Union organizers are pushing for a unified approach to the retailer’s 2 million workers around the world. Labor leaders from disparate groups in Central America have begun talks, and unions in the United States, Argentina and Chile bolstered South African organizations during their negotiations. Last week, the international trade union coalition UNI sent a letter to Wal-Mart executives to discuss the possibility of a global agreement similar to those signed by competitors such as France’s Carrefour and retailers Ikea and H&M.

“Our message to Wal-Mart is that they should realize that this is the new reality of dealing with unions in a global economy, that we are so connected,” UNI General Secretary Philip Jennings said.

As Walmart fights efforts to improve conditions for its own employees, company leaders are simultaneously lobbying for massive tax breaks that would boost the company’s already staggering profits while also “broadening” the tax base to impose taxes on those Americans currently not earning enough to pay them.

Walmart CEO Mike Duke joined other corporate executives this summer in endorsing proposals for various legislation to ease the federal tax burden on American corporations. Duke urged lawmakers to “lower the corporate tax rate as much as you can” while making the “tax base as broad as you can.”

As the spotlight continues to shine brightly on the company’s relationship with its employees and organized labor, Walmart has dramatically ramped up its political spending activity.

Traditionally a minimal player in politics, money spent on political campaigns by its Wal-Mart Stores PAC have shot up from only $226,000 in 1998 to $3.2 million in 2010. And the company is on pace to match or exceed that in 2012, with Wal-Mart Stores having already spent well over $1 million on the 2012 election cycle.  Though leaning to the right, PAC spending by Walmart is generally bipartisan, with candidates from both parties as well as national Democratic and Republican campaign committees receiving considerable contributions.

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