[Corp. Watch] 'Pro-worker' companies break law to fight unions

[Corporation Watch]

Are Starbucks and Whole Foods Union Busters?

  By Josh Harkinson

(Mother Jones, April 6) -- Shortly before the inauguration of  
President Obama, the manager of a Whole Foods grocery store in the San  
Francisco Bay Area gathered his employees in a conference room for a  
chat about labor organizing.

	"This is not a union-bashing thing whatsoever," the manager began --  
adding, however, that he'd called the meeting because Whole Foods  
believed Obama would sign the Employee Free Choice Act (EFCA),  
intended to ease unionization, and opposed by the company's lobbyists.

	According to a tape of the meeting obtained by Mother Jones, the  
manager went on to imply that joining a union would lead to reprisals:  
"It's interesting to note that once you become represented by the  
union," he said, "basically everything, every benefit you have, is  
kind of thrown out the window, and you renegotiate a contract."

	"I think it's probably fair to construe [that] as a threat,"  
concluded Tim Peck, a representative of the National Labor Relations  
Board (NLRB) in San Francisco, after Mother Jones read him quotes from  
the meeting, which was one of several anti-union trainings held by the  
company in recent months.

	Peck pointed out that labor law bars employers from threatening to  
strip benefits from workers in retaliation for unionizing. "The  
'flying out the window' [comment] kind of suggests that the benefits  
are gone," he noted. Legally, "that wouldn't pass muster."

	That Whole Foods stands accused of union busting comes at an  
inconvenient time for the company, which late last month unveiled the  
Committee for a Level Playing Field for Union Elections, a partnership  
with Starbucks and Costco that aims to re-write the EFCA.

	This year's top priority for organized labor, EFCA would allow  
employees to form a union automatically if a majority of them sign  
pledge cards -- a plan known as "card check" -- instead of requiring  
them to vote in secret elections that unions say employers can  
manipulate.

	Whole Foods opposes card check, yet has rankled business interests by  
suggesting other ways to make it easier for workers to unionize, such  
as guaranteeing union campaigners access to workers and boosting  
enforcement and penalties for labor law violations.

	"This is a third way," says Whole Foods' attorney Lanny Davis, a  
former special counsel to President Bill Clinton and self-described  
"pro-labor, liberal Democrat."

	Unlike Costco, where 20 percent of workers are represented by the  
Teamsters, Whole Foods and Starbucks stores haven't been organized by  
traditional unions. And yet their cultures are steeped in the language  
and norms of the labor movement.

	Starbucks calls its workers "partners" and Whole Foods dubs them  
"team members." A "Business Conduct Helpline" allows Starbucks  
baristas to a report workplace issues anonymously, and special  
committees of Whole Foods workers and managers resolve disputes.

	Both companies offer employees relatively generous wages and health  
benefits and routinely make Fortune's list of "Best Companies to Work  
For."

	The firms' granola reputations could give Democrats political cover  
to support a compromise on EFCA, averting a likely Republican  
filibuster. Yet the stores' unique, do-gooder mentality paradoxically  
has left little space for actual unions.

	In 1997, Starbucks CEO Howard Schultz wrote that he wanted workers  
"to believe in their hearts that management trusted them and treated  
them with respect ... If they had faith in me and my motives, they  
wouldn't need a union."

	Whole Foods' avowedly libertarian CEO, John Mackey, has compared the  
prospect of having unions at his stores to "having herpes." An  
internal Whole Foods document obtained by Mother Jones listed among  
"six strategic goals for Whole Foods Market to achieve by 2013" a goal  
to remain "100% union-free."

	Meeting that goal could be especially tough for Whole Foods and  
Starbucks if the economic downturn begins to reverse a decades-long  
decline in labor organizing. The reduction in consumer spending is  
pressuring the chains to cut wages and hours.

	Starbucks baristas from the East Coast and Midwest have held raucous  
labor protests; cuts in shifts at some Whole Foods stores have  
prompted employees at one Bay Area location to seriously discuss  
unionizing.

	Both companies, neither of which would comment in detail for this  
story, have repeatedly resorted to tough union-busting tactics—often  
breaking the law along the way.

	In recent years they fired union organizers or packed worker rolls  
with anti-union employees in efforts to prevent workers from forming  
unions or winning union contracts, government records show.

	Starbucks' and Whole Foods' anti-union-but-pro-worker stance "is the  
essence of benevolent paternalism," says Kim Fellner, whose book,  
'Wrestling With Starbucks: Conscience, Capital, and Capuccino',  
praises many of the company's other employment practices.

	"These are companies that want to do good by their workers, but they  
want to decide what that good is, rather than letting the workers  
decide for themselves. And that's a problem."

	She calls the companies' approach to EFCA "entirely consonant with  
the way that they have acted towards unions over the long haul. It's  
the place where their social responsibility really broke down."

The Skinny on Starbucks

	In 2004, faced with the first serious effort in decades to unionize  
one of its stores, Starbucks launched what a former worker calls "a  
scorched-earth campaign" against pro-union employees.

	The effort resulted in more than a dozen violations of the National  
Labor Relations Act, a judge found in an 88-page ruling last year.

	"The union busting has just been absolutely relentless," says the  
worker, Daniel Gross, who set out to organize the company's store on  
the east side of midtown Manhattan before Starbucks fired him in 2006.

	Gross and other workers, unhappy with the refusal of the Manhattan  
store to guarantee any full-time shifts, had planned to vote on  
whether to be represented by the Industrial Workers of the World.

	As the election neared, Starbucks brought in a manager, Fabian Vera,  
whose only job was to oppose the union, Gross says. Vera took workers  
on walks around the block to assess their positions and argue his case.

	Three pro-union workers were discriminatorily fired at three New York  
stores, the labor judge later ruled, while anti-union workers were  
rewarded with free gym passes and Mets tickets.

	In recent years Starbucks has settled five labor complaints in  
connection with similar practices in New York City, the Twin Cities,  
and Grand Rapids, Michigan. "This is not a few bad apples," Gross  
says. "This is a company really undermining the right to organize."

	Despite the union's legal victories, its effort to unionize the  
Manhattan store fizzled. Starbucks challenged a 2004 ruling that had  
required the union election, thereby stalling the vote for the  
duration of the appeals process, which can drag on for up to three  
years.

	Rather than see the appeal adjudicated by a Bush-controlled NLRB, the  
union canceled the vote that summer.

	"To compare this to a fair election process just defies all  
credibility," says Gross, who must wait to be compensated by Starbucks  
for being illegally fired until another appeal is resolved. "It's  
almost impossible to describe how unlevel a playing field it is."

	Union organizers say Starbucks' and Whole Foods' behavior illustrates  
why card check, the cornerstone of EFCA, is so important.

	Allowing employees to sign cards to authorize union representation  
lets them organize below the radar of employers, preventing bosses  
from retaliating against pro-union workers and stalling a vote.

	"The choice about whether and how to form a union belongs to the  
workers," says Ari Yampolsky, a campaign coordinator for the Service  
Employees International Union. "Employers should have as much say in  
that as workers do about whether employers join the Chamber of  
Commerce."

	Davis, the Whole Foods lawyer, counters that card check robs workers  
of the anonymity of a secret-ballot election, exposing them to  
coercion by union organizers.

	Yampolsky discounts that claim, however, pointing out that the NLRB  
will probably design the cards to allow workers to check one of two  
boxes: either to form the union or to ask instead for a secret-ballot  
vote on the question.

	Moreover, managers usually know well in advance of a union election  
how workers will vote, Yampolsky points out.

	"Both sides essentially do the same thing, which is go to the  
workers, ask them if they support the union, and then engineer various  
ways to test their position," he says. "Except the employer has  
profoundly more power in asking the question, as well as access to  
workers."

	Still, Davis maintains that uneven balance of power is better solved  
by improving unions' access to workers, setting a firm date for union  
elections, and tightening penalties for serious violations of labor  
law such as illegal firings.

	Whole Foods CEO Mackey "is not opposed to giving union organizers a  
fair shot to persuade his team members" to unionize, he says.

	"This is not a compromise between union bashing on one side and  
management bashing on the other side," he says of the Committee for a  
Level Playing Field for Union Elections' proposal. "We'll make this  
into a labor reform bill that levels the playing field."

	The group's ideas mirror several proposals in a recent law review  
article by Arlen Specter (R-Pa.), who Democrats had hoped would  
protect EFCA from a filibuster in the Senate before he came out  
against it two weeks ago.

	Though Davis says 20 Senate offices have offered reactions to the  
plan ranging "from encouragement to extreme happiness," it has met  
stiff opposition from EFCA sponsors George Miller, Tom Harkin, and Rob  
Andrews.

	"It was written by CEOs for CEOs," the Congressmen said in a  
statement. "It is nothing more than a classic Washington lobbying  
campaign intended to confuse the issues and disguise the real agenda  
of maintaining the status quo."

Whole Foods vs. the Teamsters

	Even after unions are certified and begin representing workers, 40  
percent of them disband before negotiating their first contract. That  
was the fate of the only union ever established at a Whole Foods store  
-- by the United Food and Commercial Workers in Madison, Wisconsin.

	Once employees approved the union in 2002 and began negotiating a  
contract with Whole Foods' lawyer, they asked the company to award  
raises more equitably, establish a grievance procedure, and protect  
them from arbitrary firing.

	The lawyer rejected the proposals but never put forth alternatives,  
while scheduling and rescheduling meetings that were spaced out every  
other month for more than a year.

	"They were just trying to stall," says Debbie Rasmussen, who worked  
at the store's juice bar and spearheaded the union effort. Whole Foods  
fired her and another union sympathizer on a technicality (drinking a  
botched latte instead of discarding it) and hired anti-union workers.

	Whole Foods employed similar tactics in 2006, after truck drivers  
working at its San Francisco-based distribution center voted to  
unionize with the Teamsters.

	The company fired two of the drivers, altered its sick-leave policy,  
froze wage increases, refused to provide information to the union that  
was necessary to negotiate a contract, and "harassed and disciplined  
employees," found NLRB investigators, who concluded that "Whole Foods  
engaged in a variety of retaliatory measures to discourage union  
activity."

	An out-of-court settlement required Whole Foods to reinstate the  
employees and reverse some of its policies.

	Similarly, after workers at a coffee bean roasting plant in Kent,  
Washington, elected to unionize in 1999, Starbucks stalled contract  
negotiations for a year while systematically denying employment to any  
job applicants who'd ever been in a union or were related to union  
members.

	The NLRB eventually forced Starbucks to compensate several workers it  
hadn't hired, and pay damages to a fired human resources employee  
who'd exposed the arrangement -- but not before the plant's  
[management-]stacked workforce voted out the union.

	To prevent employers from stalling negotiations while intimidating  
and firing employees, the EFCA would require deadlocked contract talks  
to go before a federal arbitrator -- an idea that Whole Foods attorney  
Davis calls "way over the top."

	He instead proposes stricter penalties for bad-faith bargaining.  
Yampolsky is skeptical of the idea, noting that proving bad-faith  
bargaining in court "is incredibly difficult."

	As it stands, a union that hasn't inked a contract with an employer  
after a year can be voted out by employees, as happened in Madison.

	Though the UFCW claimed but never proved that Whole Foods illegally  
promoted the vote in Madison, Whole Foods now wants the right to  
require a referendum on union representation at any time.

	Mackey "want[s] the right of employers to go to workers and ask for  
another union election if he feels the union is doing a bad job,"  
Davis explains.

	Employees at the Bay Area Whole Foods store grant that Mackey's model  
of "conscious capitalism" makes workers feel like they have a voice,  
but say that their rights are still subject to the whims of the men in  
charge.

	Mackey is pushing ahead with plans to build two new stores in San  
Francisco -- even as an existing store is cutting back hours, freezing  
hiring, and asking employees to do the same amount of work in less  
time, the workers say.

	"You shouldn't open a new store if you can't take care of what's  
going on at the ones you already have," says a worker, who asked that  
his name and the exact location of his store not be used for fear of  
reprisals.

	"But they are going to take the opposite approach," he said. "If they  
can cut costs at [the employee] level and then open up a new store,  
that's what shareholders want."

	The recent anti-union lecture at the Bay Area store has made some  
workers skeptical that Whole Foods will react with integrity and good  
faith to their organizing campaign -- not to mention the broader  
efforts at labor law reform.

	As the meeting dragged on, the store's manager falsely implied that  
employees in Madison who'd organized the store's workers had been  
nothing more than plants from the labor union.

	"Union organizers got [jobs at] the store ... [and] started  
organizing the store," he claimed. "After their job was done, so to  
speak, they left the store [and] left the company, leaving behind team  
members that really weren't the driving force behind this."

	"Pretty soon thereafter, [the other workers] were kind of regretful  
of what they had done."