Unionizing Wal-Mart

JONQUIERE, Quebec — The signs topping sales racks wear the same yellow smiley face, but promise “Chute de Prix,” instead of price rollbacks. The boxes of Tide shelved in housewares come packed with a bonus CD inviting shoppers to experience “la passion du Hockey.”

Otherwise, the Wal-Mart store off Highway 70 could be almost any one of the retail Goliath’s nearly 5,000 discount emporiums in the United States and eight other countries. And that’s what worries executives at the Arkansas headquarters of Wal-Mart Stores Inc.

The 165 hourly workers at this store 2½ hours north of Quebec City could soon become the first anywhere to extract what the world’s largest private employer insists its 1.5 million “associates” around the world neither want nor need — a union contract. A government agency has certified the workers as a union and told the two sides to negotiate.

“One person against Wal-Mart cannot change anything,” said Gaetan Plourde, a 49-year-old sales clerk, explaining frustration over pay, scheduling and other practices. “Wal-Mart wants to be rich, but it won’t share.”

Wal-Mart responds that it does share its cost savings with consumers through lower prices and that it treats its workers fairly. The company has redefined retailing by squeezing its suppliers and keeping a tight lid on other costs, including labor, allowing it to undercut competing stores. That translated last fiscal year into profits of more than $9 billion on sales of $256.3 billion.

There has been angry name-calling by workers riven into pro-union and anti-union factions. There have been accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union (UFCW).

And on Wednesday, Andrew Pelletier, a spokesman at Wal-Mart Canada, said: “If we are not able to reach a collective agreement that is reasonable and that allows the store to function efficiently and ultimately profitable, it is possible that the store will close.”

The struggle over the Jonquiere store is part of a larger chess game, waged by labor organizers in Wal-Mart stores scattered across Canada — including two others in Quebec, where union spokesman Michael Forman said employees have applied for union certification.

The public jockeying is also geared to capture the attention of workers in the United States.

Hourly wages are Wal-Mart’s biggest operating cost, about 35 percent to 40 percent of the bill to run its stores. Benefits are second. Those costs have been rising because of higher health care bills and the retailer’s entry into more expensive cities.

Wal-Mart says the average hourly wage of its U.S. workers is $9.96 an hour — just below the $10 an hour average pay for U.S. discount department store workers and short of the $10.87 an hour earned by the average supermarket employee. But pay and benefits are substantially better at some unionized food stores.

Wal-Mart defends its pay as competitive and says its chief concern with unions is that they would get in the way of doing business.

Even if a union gains entry, it will make only an incremental difference in Wal-Mart’s costs and profits, said Emme Kozloff, an analyst who tracks the retailer for Bernstein Research in New York. It’s the perception among employees and shareholders, as much as the bottom line effect, that concerns Wal-Mart, she said.

“I do think the union thing would be a symbolic blow externally and internally, but they’re probably gearing up to handle something like this,” she said. “For a retailer, the biggest component of your cost structure is labor and so you’re going to be darn sure you do everything in your power to make sure you avoid an increase.”

Wal-Mart does not disguise its distaste for unions. It has built such a high wall against organized labor that it’s not clear what would happen if a single brick was yanked loose.

Maybe, as has been the case often before, Wal-Mart’s bankroll, tenaciousness and skill at buying time will win out and the union effort here will fizzle. Or just maybe, something else happens — a prospect the union savors — something with an effect beyond Jonquiere.

“It’s a little bit like watching a hurricane form,” said Robert Hebdon, a professor of labor relations at McGill University in Montreal. “You don’t know whether it’s going to be just a little bit of wind … or whether it’s going to be a storm.”

The closest a U.S. union has ever come to winning a battle with Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers — all members of the store’s meatpacking department — voted to join the UFCW, the retailer’s principal adversary in organized labor.

Wal-Mart took a stance that is now being repeated in Canada — arguing before labor officials that any union should represent all employees at the store. That argument was rejected. But Wal-Mart announced a change that it said had long been planned — eliminating meatcutters companywide.

The case of the Texas meatcutters, who were offered other jobs by the company, remains alive before the National Labor Relations Board, but none of the employees who voted to unionize still work at the store and the union campaign there has stalled.

Unable to get in through Wal-Mart’s front door, union leaders have been trying the latches on the rear windows and think they’ve found an opening in Jonquiere and six other stores in three Canadian provinces.

The face-off in Canada provides a compelling case study in Wal-Mart’s creativity in keeping itself union-free.

Wal-Mart entered Canada in 1994 by buying 122 stores in the discount Woolco chain, and putting its name on them. In doing so, the retailer took a pass on 22 Woolco stores — including the only 10 whose workers were represented by a union. The company portrays it as a coincidence.

Two years later, the Canadian affiliate of the United Auto Workers tried to organize workers at a Wal-Mart in Windsor, Ontario, but that drive eventually fizzled. In Weyburn, Saskatchewan, the union collected enough membership cards to apply for government recognition, with the effort now tied up in several court suits. In Thompson, Manitoba, the union has twice sought — and lost — a vote to represent workers.

Then there is Jonquiere, where the two sides have parried for the past year over how to proceed.

Despite managers’ discouragement, talk of a union continued in the store, slowly finding new converts. But pro-union workers say the balance shifted in their favor only after what at first seemed a failure. In April, after the union collected membership cards from more than 35 percent of the workers, the provincial labor board oversaw a vote on representation. The union lost by nine votes.

When the results were announced, about two dozen managers and employees who opposed the union began dancing and shouting the company cheer. Pro-union employees said co-workers who had been on the fence found the celebration boastful and unbecoming.

Enough minds were changed for the union to persuade more than half the workers to sign membership cards, enough for the provincial labor board to certify a union without a vote and instruct the two sides to negotiate a contract.

To the union, the events in Jonquiere are precisely the entry point it’s been searching for. “For the first time Wal-Mart will have to sit with us at the negotiation table,” said Louis Bolduc, who directs the union’s activities in Quebec province. “We’re not going to let them play with us.”