Workers of Wal-Mart Unite!

How Wal-Mart got a Walkout of its employees.....

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Wal-Mart workers walk out
Employees at one store in Florida stage a protest—and win a reprieve
By Pallavi Gogoi
Business Week

Updated: 11:09 a.m. PT Oct 18, 2006
For months, politicians and activists have been saying that the low prices at the world's largest retailer, Wal-Mart Stores, come at a tremendous cost to its low-paid employees. They point to lawsuits that contend the company discriminates against women and forces low-paid employees to work through lunch breaks and after their shifts, without extra compensation. Wal-Mart has also been boosting its political contributions to stop initiatives aimed at forcing the retailer to raise pay and benefits.

Now, as Wal-Mart rolls out a new round of workplace restrictions, employees at a Wal-Mart Super Center in Hialeah Gardens, Fla., are taking matters into their own hands. On Oct. 16, workers on the morning shift walked out in protest against the new policies and rallied outside the store, shouting "We want justice" and criticizing the company's recent policies as "inhuman." Workers said the number of participants was about 200, or nearly all of the people on the shift.

It's the first time that Wal-Mart has faced a worker-led revolt of such scale, according to both employees and the company. Just as surprising, the company quickly said it would change at least one of the practices that had sparked the protest. Late in the day on Oct. 16, there was some disagreement over which of the new policies would be put on hold.

The protest wasn't led by any union group. Rather, it was instigated by two department managers, Guillermo Vasquez and Rosie Larosa. The department managers were not affected directly by the changes, but they felt that the company had gone too far with certain new policies. Among them were moves to cut the hours of full-time employees from 40 hours a week to 32 hours, along with a corresponding cut in wages, and to compel workers to be available for shifts around the clock.

In addition, the shifts would be decided not by managers, but by a computer at company headquarters. Employees could find themselves working 7 a.m. to 4 p.m. one week and noon to 9 p.m. the next. "So workers cannot pick up their children after school everyday, and part-timers cannot keep another job because they can be called to work anytime," says Vasquez.

In addition to scheduling changes and reduction in hours, workers are now required to call an 800 number when they are sick. "If we are at an emergency room and spend the night in a hospital and cannot call the number, they won't respect that," says Larosa, who has worked at the store for six years. "It will be counted as an unexcused absence."

Beginning last week, the two managers began talking with other employees, one at a time, getting their signatures in support of a protest. The demonstration may not have happened if not for the tight-knit nature of this predominantly Spanish-language community near Miami. At least 15 department managers joined the workers in speaking out against the new policies. "We are a Spanish-speaking community, some from Cuba, some from Venezuela and the Dominican Republic, and if something affects my brothers and sisters, it affects me," says Yahima Morales, who has been a department manager of health and beauty aids for four years at the store.

The employees drafted a protest letter that they have sent to executives at Wal-Mart headquarters in Bentonville, Ark., and also to Florida politicians, including Florida Governor Jeb Bush. "In the letter, we state that we want justice and that Wal-Mart should stop harassing us," says Vasquez. At least 400 store employees have signed the letter.



Wal-Mart spokesman David Tovar says his understanding is that the protest was prompted by the reduction in hours, which he says was simply a mistake. "The new schedules posted made it seem like some hours were reduced, but that was inaccurate and we have corrected it." Tovar wouldn't talk about the sick-leave issue, saying that he wasn't aware the topic was raised by the workers. As for the changes in shifts, he says: "Our schedules are set so that we have adequate staff during the busiest hours of the day."

The scheduling changes, which have been rolled out in Wal-Mart stores around the country in recent weeks, are a sign that the retailer is acting on ideas outlined in an internal document that was leaked last year. In the memo, a Wal-Mart executive said it would find ways to rid its payroll of full-time and unhealthy employees who are more expensive for the company to retain.

Wal-Mart executives have recently told Wall Street analysts that the company wants to transform its workforce from 20 percent part-time to 40 percent. Recently, it was also reported that older employees in some stores who had back and leg problems were barred from using stools on which they had sat for years.

The moves come as the company is struggling to keep its profits growing at the rapid rate that they have in the past. As it squeezes its workforce expenses and trims costs in all corners, it is also expanding overseas. On Oct. 16, The Wall Street Journal reported that Wal-Mart has agreed to spend $1 billion to acquire Trust-Mart, a closely held Taiwanese company that owns one of the largest food and department store chains in China.

What's next at the Hialeah Gardens store, where store managers have had to pitch in to keep the store open? Is this the first step to forming a union at the store? That's unlikely, given the fate of previous attempts to unionize store employees. When employees in Jonquière, Que., Canada, voted last year to unionize, Wal-Mart shut the store. Vasquez says the workers haven't really talked about their plans, beyond getting the company to change its practices. "At this point, we just want to be heard," he says.

Copyright © 2006 The McGraw-Hill Companies Inc. All rights reserved.
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