Additional Case Studies

Online Case Study: Wal-Mart and Union Suppression

Wal-Mart is the largest retailer in the world employing more than 2.1 million ‘associates’ at more than 8000 retail units in 15 countries. In the UK, it is the owner of Asda who employ over 170,000 people. Wal-Mart has long been the target of persistent allegations of aggressive anti-unionism. For example, Wal-Mart fought a two-year legal battle to prevent the world's largest labour union (the All China Federation of Trade Unions) organizing in its 60 stores in China (although Wal-Mart ultimately lost the battle in 2006) (Watts 2006). The company clearly states that it does not feel that union presence is needed in the firm, stating on their corporate website that: ‘We are not against unions. They may be right for some companies, but there is simply no need for a third party to come between our associates and their managers’. Wal-Mart suggests that the reason for this is that employee welfare is the concern of the employer. In particular, it suggests that direct communication – an ‘Open Door’ policy that allows grievances to be addressed anywhere up the corporate ladder – negates the need for third-party intervention in disputes between employees and the employer. However, many claim that Wal-Mart goes far beyond ‘substituting’ for the presence of unions with alternative forms of direct communication. Many unions have accused Wal-Mart of actively suppressing union presence and of ‘union-busting’, utilizing a range of practices designed to hinder union activity and dissuade membership among workers. For Example, the United Food and Commercial Workers union in Canada has accused Wal-Mart of harassing union members and closing only unionized stores as a reprisal against union members (Wal-Mart claimed that meeting union demands in these stores would be against its business model and the stores were struggling) (Ceascu 2006).

In the UK, Asda has also been accused of union-busting activity. In 2006, an employment tribunal ruled that Asda had breached the Trade Union and Labour Relations Consolidation Act (1992) by offering staff at its Washington depot a 10 per cent pay rise if they gave up membership of the GMB union. Hencke (2006) reports that the tribunal blamed Asda's PR agents, for producing material that was ‘very hostile to trade unions and highly disparaging of the process of collective bargaining’. Despite this ruling, however, however GMB shop stewards accused Asda of subsequently employing fresh bullying tactics, including putting CDs in drivers’ cabs urging them to vote against a strike to gain national negotiating rights, making lorry drivers go for interviews with senior management to persuade them not to strike and writing to their families warning them against strike action. Despite these tactics, GMB members voted in favour of industrial action. However, Asda and the GMB struck a deal which saw the strike called off at the last minute (Hencke 2006).

Task

Conduct some research into Wal-Mart/Asda, their employment practices and attitudes and approach to dealing with trade unions and answer the following questions.

  1. On the basis of your research, would you categorize Wal-Mart’s and Asda’s approach to resisting trade union organization as union substitution and suppression? What examples can you give of the strategy they appear to have adopted?
  2. Why do Wal-Mart and Asda appear to pursue aggressive policies of union avoidance?
  3. Why do you think that Asda employees chose to reject a 10 per cent pay rise, opting instead to maintain union recognition at the department?
  4. Wal-Mart’s strategy of union avoidance is partly a product of the U.S. institutional and cultural context in which the organization originated. What are the characteristics of the employee relations system in the UK which might make such an approach less appropriate and less likely to succeed?

References

Ceascu, J. (2006) Can Wal-Mart keep unions out? Personnel Today, 14 March.

Hencke, D. (2006) Asda under threat of prosecution for union busting, The Guardian, 13 June.

Hencke, D. (2006) Good shop, bad shop? The Guardian, 1 July.

Watts, J. (2006) Wal-Mart backs down and allows Chinese workers to join union, The Guardian, 11 August.