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					                       Arizona Industrial Relations Association
                                                                                                                  Issue 11 - October 2003

CHUCK HUGGINS A TIRELESS LEADER
A    IRA Board Member Charles R. “Chuck” Huggins
     passed away on August 5, 2003. After serving in
the U.S. Air Force, Chuck made his home in Globe,
                                                           women, and was a tireless fighter for social and
                                                           political justice as well as the rights of working families.
                                                           He encouraged Union Members to become leaders
Arizona and as an electrician he began a twenty-five       and serve their fellow workers as well as their
year involvement with the International Brotherhood of     communities. He had a passion for employees,
Electrical Workers Local 518, rising through the ranks     workers and finding good jobs for people. He is also
to eventually become Business Manager. He was              known for his work in the Arizona legislature and led
active in many community and civic activities in the       the commitment to improving Worker's Compensation
Globe and Gila County area.                                Benefits and was an advocate on bringing new
                                                           technology to Unions across the state.
In 1987 Chuck was elected as Secretary/Treasurer of
the Arizona State AFL-CIO, and was soon elected to         He also revived a tradition of “Labor Day Parades” in
the Board of the Arizona Industrial Relations              Phoenix. This was not a normal spectator parade, but
Association. He served the AFL-CIO until 2002 when         a parade of Unions and their members honoring and
he retired to devote his time to his two grand daughters   saluting their accomplishments and Union
and his role as Executive Director of the Ensuring         Membership. This year the Labor Day Parade was
Opportunities Coalition, which he founded in 1989 to       held in Globe where he was originally scheduled to be
help under employed and dislocated workers                 the Grand Marshall. The parade was dedicated to
regardless of Union Membership. Over the years he          Chuck and his memory.
has served on the National Labor Relations Board, the
Governor's Council for Workforce Development Policy        He is survived by his wife Sharon, daughter Lisa
and many, many other committees and organizations.         Huggins Hubbard, one sister, four brothers and his
                                                           granddaughters Hannah and Sarah.
Chuck dedicated his life to Arizona's working men and



President Bush Ready to Push                               In this Exchange
Agenda to Create Jobs                                       From the Board..................................................................    2
                                                            Is it Time for AZ to Grant “Meet & Confer Rights............                        4
T    he nation celebrated Labor Day this year with an
     estimated 9 million Americans on the unemployment
rolls-700, 000 more than on this holiday last year. This
                                                            Local AAA Labor Caseload Growing................................
                                                            Controversy over whether an Arbitrator is engaged in the
                                                                                                                                                4

                                                            Practice of Law in Arizona.................................................         5
year, the President marked Labor Day in Ohio, where he      Local News on Wal-Mart...................................................           5
addressed members of the Union of Operating                 Preparation for Arbitration................................................         6
Engineers and their families. In north-south Ohio, the      House Member Proposes ADR Under
President plans to push his agenda to create jobs. Bush     NLR Act for 1st Contracts................................................           6
insists that his tax cuts will provide the stimulus         Wal-Mart: A Model Employer?.........................................                7
necessary to rev up the economy.                            TSA: Airport Screeners Cannot
                                                            Form Union.......................................................................   9
The Associated Press
From the Board
   The Arizona Industrial Relations Association
(AIRA) is the state’s oldest, most prestigious
                                                        Letter from Your 2003 President
and active association for practitioners and            It seems almost impossible for the year 2003 to be more than half over! Our
professionals, in the field of Industrial Relations     luncheon seminar on “Domestic Violence in the Workplace”, provided us with
and Human Resources Management.                         alarming statistics of the number of work-hours lost each year due to violence in
   As a chapter of the IRRA (Industrial
                                                        the work place. This affects productivity and often the well being of the entire
Relations Research Association), AIRA is a              organization. We all know that happy workers are productive employees! We
unique organization where those interested in           learned how to become more aware of our surroundings, how to formulate escape
labor relations and human resources, interact to        plans and ideas on building security measures. Mark Yoshimura and Craig Mills
learn more about the profession, share ideas,           gave an excellent presentation.
network, and keep abreast of new developments
and research.                                           In May one of our Board Members, Cornele Overstreet, Regional Director for
Board of Directors
                                                        Region 28 of the National Labor Relations Board spoke on the Epilepsy
                                                        Foundation Ruling and how it relates to Weingarten Rights. As always Cornele is
                                                        a wealth of information, and the attendees had more questions that time would
Linda Long, President                                   allow. Thanks to Cornele for an always-interesting seminar.
   Treasurer, O.P.E.I.U. 56
Richard Fincher Esq., Vice President
   Workplace Conflict Resolutions                       As this Newsletter goes to print our September luncheon speaker will be Mary Jo
Vera Ann Riggs, Secretary-Treasurer                     O'Neill, Regional Attorney for the EEOC, and she will share with us the latest legal
   Labor Relations Specialist, Salt River Project       updates from her office.
Ronald Collotta
   Commissioner, FMCS
Cliff Davis, Retired President & Statewide Grocery      In mid November our Board is planning a dinner to honor (roast) Stan Lubin. As
   Coordinator, Teamsters Local 104                     most of you know, Stan is a prominent Labor Attorney and very active in the
Gregory Fretz
   Labor Relations Administrator, City of Phoenix       labor/management arena.
Susan Grace
   Deputy Director, EEOC                                On a very sad note, in August we lost Chuck Huggins, a very active member of the
Douglas Hammond
   Arbitrator                                           Labor/Management Community. During his lifetime he work tirelessly in helping
Phil Hanley                                             working men and women in all walks of life, striving to make their standard of living
   Director of Human Resources, ATC Phoenix             better and providing avenues for workers to help themselves along the way. It is
Bob Hans                                                an understatement to say we will miss him.
   Director Associate Services, Holsum Bakery
Charles Huggins
   Retired Secretary-Treasurer, AZ State AFL-CIO        A large portion of this Newsletter is being devoted to Wal-Mart and examining the
Stanley Lubin                                           ever increasing litigation surrounding this corporation and how they treat their
   Attorney, Lubin and Enoch
Ernie Mariner, Past President                           employees. Their labor/management cooperation is non-existent and the facts
   Labor Relations Consultant, APS                      and stories told by their employee's shows how devastating Wal-Mart's attitude is
Jim McLaughlin                                          toward their employees. Research shows at any given moment some 10,000
   President, UFCW Local 99
Kimberly Moore
                                                        lawsuits are pending against Wal-Mart. Each year it is sued roughly 4,700 times,
   Regional VP, American Arbitration Association        an average of 13 cases a day on matters ranging from injured customers to
Jim Naber                                               employee discrimination. The Equal Employment Opportunity Commission has
   Sr. Labor Relations Consultant, Salt River Project   had to file more suites against the Bentonville Corporation for cases of disability
Bob Oberstein
   Director L/M Program, Ottawa University              discrimination than any other corporation! They appear to have a disregard for
Cornele Overstreet                                      the law and the welfare of their employees. In my opinion the Wal-Mart
   Regional Director - Region 28,                       environment should be very disconcerting and disturbing to all fair-minded
   National Labor Relations Board
Dennis Teel
                                                        citizens. With Wal-Mart being the biggest employer in 25 states, they set the
Commissioner, FMCS                                      wages and labor practices for the area, then when other corporations/companies
                                                        follow suit and their practices become the norm, soon this becomes the America
                                                        we will live in. Not a pretty picture and a very disturbing thought!
       Exchange: Publication of the
 Arizona Industrial Relations Association               This is the reason on a recent visit to the White Mountains when I need a fan, I had
                 Editors                                to really stop and think. Where to buy this fan? Wal-Mart & K-Mart are the first
    Dick Fincher        Ron Collotta                    places that come to mind. They are convenient and have almost everything, right?
   (602) 953-5322      (602) 640-4662                   Then I think, where did we shop before the “Marts” came into being, there has to
(602) 953-5323 (fax) (602) 640-4667 (fax)               be other establishments that carry fans. Yep, a local hardware store had fans and
                                                        I walked proudly out of the local store with one in hand. It was made in the USA as
      Comments for the Editors?                         well!
The AIRA Newsletter Editors welcome
  your compliments and criticisms.                      As always, the Board Members as well as myself welcome any ideas or feed back
                                                        from the Membership regarding topics you would like to see covered in our
                Published by                            luncheon seminars. Feel free to contact any AIRA Board Member with your ideas.
               Dianne Joselit
              UFCW Local 99                             Linda J. Long, OPEIU #56
           Diannej@ufcw99.com                           602-275-6222 or long266@qwest.net
                                                                          2
                                                                                           From the Board

From your Editors                                                Your AIRA Board encourages all AIRA
                                                                   members to travel to San Diego
All AIRA Members:
                                                                       in January, to attend the
                                                                         national conference
Welcome back from the summer heat and to the fall
2003 AIRA program year!

This edition of our newsletter focuses on local public          IRRA 56th ANNUAL MEETING
policy issues and addresses two key issues. One                       Holiday Inn On The Bay
issue is the right of Arizona state employees to be
recognized by the state and to “meet and confer” for                      San Diego, CA
their terms and conditions of employment. The                           January 2-5, 2004
second issue is Wal-Mart and its labor and employee
practices. As always, your AIRA does not lobby for                        See IRRA Website for
issues. We do raise controversial issues for                         National Meeting in January 2004
examination.
                                                                Meeting schedules, presenter information,
In spring 2003, our edition focused on the National            and hotel and registration information will be
Labor Relations Board. In 2002, our first edition                  available in early September 2003.
focused on labor arbitration, our second focused on
alternative dispute resolution, and our third edition
focused on collective bargaining.
                                                             National Academy Collaborates with ACR and
Big new! The Executive Board of our IRRA voted in              FMCS on Arbitrator Training Program in
June 2003 to recommend that the name of IRRA be                             October 2003
changed to the Labor and Employment Relations
Association. This recommendation follow nearly a             Labor Arbitrator Development Program, Sponsored by
decade of debate prompted by the narrow way in                              ACR, FMCS and the NAA
which the tem “industrial relations” has come to be           October 14 and 15, 2003 (Preceding the ACR Annual
used. There will be an all membership vote in spring                             Conference)
2004 for final approval. (We assume our name may
change as well) Comments on this recommendation              This two-day learning opportunity is designed for practicing
should be submitted to LaVonne Ritter of FMCS in             labor arbitrators with five or more written cases. The
Las Vegas.                                                   program will focus on several areas: substantive aspects of
                                                             arbitration, decision-making, award-writing, advanced
Our goal is to provide AIRA members with timely and          hearing procedures, and ethics. Significant time will be
provocative information on labor relations in Arizona        allocated to building a career, including gaining acceptance,
                                                             applying to panels, writing articles, and managing fee
and across the country.                                      income. This will be a collegial and interactive environment
Please provide your editors with feedback on our             for learning. A unique aspect of this program will be review
work, and provide us with content along the way.             of your arbitration award by faculty from the National
Thanks for your support.                                     Academy of Arbitrators. The nationally recognized faculty
                                                             includes Homer LaRue, Elizabeth Neumeier, David
Richard Fincher, Labor Arbitrator/Grievance Mediator         Weinberg, and Fred Dichter. Additional ACR and FMCS
Phone: 602-953-5322                                          faculty will provide informal mentoring during the program.

                                                             This program represents the first-ever national collaboration
Ron Collotta, Mediator, FMCS                                 between the Association for Conflict Resolution (ACR), the
Phone: 602-640-4662                                          Federal Mediation and Conciliation Service (FMCS), and
                                                             the National Academy of Arbitrators (NAA). Registration is
                                                             limited.

                                                             For general information about joining the ACR
                                                             workplace section and getting involved in its activities,
                                                             contact Stephen Kotev, ACR Family and Workplace
                                                             Coordinator at 202-464-9700 x 227.

                                                         3
Local News

Is it Time for Arizona to Grant “Meet and Confer” Rights to State Employees?
(AIRA is a non-profit educational organizational. We do           One vestige of the “old school” of public policy was to
not lobby for public policy. However, we are able to              reject the notion that public employees should influence
raise issues for public debate and reflection. This article       their terms of employment. Under this theory, the
encourages AIRA members and the public to reflect on              School Board, the County Supervisors, and the State
this issue of pressing public policy in labor relations)          Governor always know far better what is good for public
                                                                  employees than the actual employees. They are
Arizona is at a crossroads. One road leads to a state             sovereign entities beyond the reach of labor relations
with high quality of life, a vital economy and a strong           and God forbid, arbitrators. Of course, a few public
social fabric. The other leads the state to mediocrity or         entities have rejected this notion and recognized their
worse: an undistinguished state known only as a “also             employees right to bargain, or at least “meet and
ran.” Which of these futures becomes a reality for                confer.” This includes the City of Phoenix, the City of
Arizona will largely become a function of the public              Tucson, Peoria, and Tempe. It includes numerous
policy choices we make day to day. (from Rob Melnick,             school districts in metropolitan areas.
ASU Morrison Institute for Public Policy)
                                                                  Today, there is one major block of public employees not
For the past fifty years, the dominant public policy of           able to be recognized and to negotiate their terms of
Arizona concerning employment/labor relations was                 employment. These are state employees. To our
one of desperation-cheap labor, right to work, limited            knowledge, our Governor could remedy this reality by
employee protections, and low employee benefits. The              simply issuing an executive order to her administrative
only way to encourage employers to relocate here was              heads requiring them to meet and confer” with their
to offer the lower road. Lets be proud of being a low             duly-represented employees. This does not require
wage capital of commerce. Lets be proud of attracting             legislative action. President Kennedy issued such an
thousands of minimum wage jobs in call centers. Do not            executive order forty years ago to federal employees.
compare our social conditions (poverty, educational               The vast majority of states have provided such
levels, workers compensation) against any other state.            bargaining rights to their employees. Why is Arizona so
                                                                  backwards?
However, times are changing with the Arizona
legislature and local leadership. Just in the past ten            Some critics will argue that a challenging state
years, this implicit policy in the private sector has             economy is the worst time to grant bargaining rights to
improved, at least in theory. Arizona is now striving to          public employees. But those of us who negotiate for a
be high tech, higher wage, and clean industry. For the            living know the truth is the opposite. “Meet and confer”
first time ever, public education is being valued, high           works in good times and bad times, and is usually more
tech is being attracted, and the role of public                   creative in bad times.
universities to influence the economy is being valued by
the legislature. Some of us are genuinely optimistic that         The AIRA editors encourage our readers to consider
labor relations will also evolve with the economy.                this social issue and provide us your feedback.


Local AAA Labor Caseload Growing
The labor cases filed in the Phoenix office of the                for giving up certain features of traditional labor
American Arbitration Association more than doubled                arbitration, such as transcripts, briefs, and extensive
from 2001 to 2002, and the caseload is on target to               opinions, the parties using these simplified procedures
grow another 20% in 2003, reports local Vice President            can get quick decisions and realize certain cost savings.
Kimberly Moore. The increased case filings are likely             The filing fee for the expedited services is $100 per
due to the increased ease of utilizing the AAA services           party.
in labor arbitration and mediation. While the regular, full
service filing fee remains $175 per party, parties can            The local office has also recently been involved in card
also use the list only ($50) or list with appointment ($75)       check verification, where signatures from a potential
services to find a qualified, trained AAA neutral. Also, in       bargaining unit are verified and calculated confidentially
response to the concern of parties over rising costs and          by AAA to certify whether 50% or more of a potential
delays in grievance arbitration, the AAA has established          bargaining unit voluntarily accept membership in a
expedited procedures under which awards are rendered              union without disclosing to management which
no later that seven (7) days after the hearing. In return         employees signed cards.

                                                              4
                                                                                                 Local News

BIT OF A CONTROVERSY OVER WHETHER AN ARBITRATOR
IS ENGAGED IN THE PRACTICE OF LAW IN ARIZONA

E    ffective July 1, 2003, the Arizona Supreme
     Court promulgated amendments to Rule 31. It
is intended to regulate the practice of law, but in
                                                            Supreme Court reconsider the rule and its effect,
                                                            the American Bar Association had taken a stance
                                                            that seeks to exclude mediation or arbitration from
doing so, defines many of the tasks performed by            the definition of "the practice of law". Bruce
arbitrators and mediators as the practice of law.           Meyerson, an Arizona native son and chair of the
The effect? Your arbitrator or mediator has to be           ABA Section of Dispute resolution was unflagging
an attorney, licensed in the state of Arizona or be a       in his efforts to convince the ABA Task Force on
"Licensed Document Preparer" or be deemed in                the Model Definition of the Practice of Law to
violation of Arizona law.                                   exempt arbitration and mediation from the
                                                            definition. His Section's success is in the form of a
What tasks, you ask? Among others…                          non-binding "footnote" that is advisory only.

   Preparing any document intended to affect                Most states that have considered this issue have
   legal rights for a specific person or entity;            excluded arbitration and mediation from the
                                                            definition. The definition has the essential factors:
   Preparing any document for filing in                     providing legal advice or service where there is a
   any…tribunal.                                            client relationship of trust or reliance.

And it's even worse if you're a Union advocate in           There are motions for reconsideration pending as
an arbitration proceeding. The Rule says that               this piece is written. Stay tuned for further
"practice of law" means providing legal services by         developments.
representing another in a formal dispute resolution
process such as arbitration and mediation if the            [Jeremy V. Cohen maintains a national
advocate is not admitted to practice as an attorney         professional arbitration and mediation practice in
in Arizona.                                                 the fields of labor- management relations and
                                                            employment law.]
While there are efforts underway to have the



Local News on Wal-Mart
W      al-Mart will unveil its 54th store in Arizona August 20 with the opening of the Super Center concept in
       Casa Grande. Wal-Mart-Arizona's largest private employer with more than 21,700 workers, reported
improved second quarter sales. The Arkansas retailer and grocery chain reported sales of 62.6 billion. The
retailer has two distribution centers in the state. (The Business Journal)

Some residents and a local union have joined together to stop the building of a Wal-Mart Supercenter in a
Peoria neighborhood. Mary O'Conner and UFCWU Local 99 launched a referendum drive that seeks to
overturn an ordinance passed by the City Council that rezones land so that Wal-Mart can build its store.
Mike Vespoli, Treasurer for Responsible Growth Committee and Director of Community Affairs for the
Union, said Wal-Mart mistreats its workforce. He said Wal-Mart stiffs its workers on health and retirement
benefits and does not pay prevailing wages.

(The Arizona Republic)




                                                        5
PREPARATION FOR ARBITRATION Some Things That Bear Repeating
I  am too often confronted by arbitration advocates who
  failed to prepare properly. Since an arbitrator won't
invent facts and theories that weren't presented by the
                                                                 An advocate should attempt to anticipate the adversary's
                                                                 version of what happened and to contradict contrary
advocate, the parties may not get a result that does             versions. Give a lot of thought to these key case
justice to the dispute. Let's review some of the more            building blocks:
fundamental requirements.

The process requires a systematic investigation of facts
                                                                     !   What elements must be proved?
and a determination of what is needed to fill in the gaps,           !   What evidence is available?
if they exist. Primary and secondary witnesses should
be interviewed. Make a site visit to ensure that critical
                                                                     !   What damaging evidence is available to the
                                                                         opponent?
testimony will hold up.
                                                                     !   Which witnesses who are necessary and
The relevant contract must be read and analyzed to see                   persuasive are available or missing?
what bearing it has on the case, and the likely arguments            !   What alternatives are available to fill the gaps?
and positions of your adversary. Care and diligence
require that all potentially relevant contract clauses be        It may be helpful, and keep an advocate on track to use
considered, otherwise the case may be lost when the              a working list that focuses on the elements of the case
arbitrator finds such a clause "hidden in plain sight".          and the necessary sources of proof. One side of the
                                                                 paper would be titled " Elements" and the other "Sources
Like any well-prepared meal, the elements of the case            of Proof". This form sheet allows for periodic and
and the 'courses' should be examined beforehand. What            effective overview of the case and identifies missing
themes and theories will you use to make your                    links.
submission to the arbitrator?
                                                                 A great meal often owes a debt not just to the skill of the
Unless you like Russian Roulette, you won't want to              chef, but also to the quality of the preparation. Bon
dump all your facts on a plate like so much succotash for        Appetit!
the Arbitrator to separate with his fork.
                                                                 [Jeremy V. Cohen, Esq. maintains a national
What facts are disputed; which are definitely not? If            professional arbitration and mediation practice in the
there is any doubt an adversary will contest a 'fact', be        fields of labor-management relations and employment
prepared to prove its existence.                                 law.]


House Member Proposes ADR Under National Labor Relations Act for First Contracts
January 16, 2003
By Justin Kelly, ADRWorld.com


R    ep. Gene Green (D-TX) has introduced a bill in
     the U.S. House of Representatives that would
amend the National Labor Relations Act to provide for
                                                                 certification could jointly select a mediator to help
                                                                 resolve any outstanding issues. If the parties are
                                                                 unable to reach agreement on the selection of a
a range of alternative dispute resolution processes              mediator, either party could ask the Federal Mediation
during initial labor contract negotiations. The bill, H.R.       and Conciliation Service to appoint one.
93 the Labor Relations First Contract Negotiations               The parties would have 30 days to resolve
Act, would establish a stepped ADR process                       outstanding issues in mediation. At the end of that
beginning with mediation and ending with binding                 period, either party would have the option of referring
arbitration to resolve impasses over collective                  the negotiations to FMCS for final and binding
bargaining agreements.                                           arbitration of the remaining issues.

Under the bill, employers and labor representatives
who are unable to reach agreement on a new
collective bargaining agreement within 60 days of



                                                             6
                                        Wal-Mart; A Model Employer?
          Is Wal-Mart a Progressive Employer and Successful Model of Commerce in Arizona,
                   or an Anti-Union, Low-Paying Model of Undesired Employment?
(AIRA is a non-profit educational organizational. We do not advocate or lobby for public policy. However, we were
created to raise issues for public debate and reflection. This article encourages AIRA members and the public to
reflect on this issue of pressing public policy in labor relations)

Over the past few years, there is one Arizona employer constantly in the news. This is Wal-Mart. They are the largest
employer in the state. They dominate their geographic territories. They are legendary for their purchasing power and
low prices and are role models for business schools. The City of Scottsdale just provided huge tax breaks for Wal-Mart
and their developer in South Scottsdale. Wal-Mart is a national economic and social phenomenon. Wall Street loves
Wal-Mart.

However, there is a different view of Wal-Mart. This is the view from the NLRB, from the EEOC, and from the UFCW
(United Food and Commercial Workers Union). This is also the view from many employees, and from those of us who
reflect on the changing nature of employment here in Arizona.

Enclosed in this edition of the Exchange are many articles about Wal-Mart. You decide what you think. Is Wal-Mart
good for the long-term economy and social fabric of Arizona, or are they an employer who ignores federal
labor and employment laws and perpetuates our reputation as a low wage, low education state?


Wal-Mart Banking Bid Feared
Legislation in Congress would give nation's largest retailer chance to set up financial empire
BY FRANK NORTON
Of The Post and Courier Staff
The most powerful retailer in America could also become            nationally through its nearly 3,500 stores.
the nation's most feared banker, if Congress approves a
bill allowing Wal-Mart a back door into banking. It's a bill       "Wal-Mart has a history of destabilizing communities by
that has bankers everywhere distressed. "Our concern is            under-pricing local stores, driving them out of business
that Wal-Mart and possibly other retailers could use this          and then raising prices on consumers. There is very little
opportunity to launch a nationwide banking empire                  doubt they would use their tremendous economic power
through existing store networks," said Ron Ence,                   to do the same thing to community banks with ILCs,"
director of legal affairs for the Independent Community            Ence said.
Bankers Association.
                                                                   Wal-Mart tried four years ago to buy Federal
The bill aims to update banking rules, and it would also           BankCentre, an Oklahoma-based savings and loan, but
make it easier for banks and what are known as                     was foiled by a change in federal regulations that
industrial loan companies to expand across state lines.            prohibited commercial firms from obtaining thrifts. The
That means Wal-Mart, which has repeatedly tried to get             retail giant then failed to win approval on a proposed
into banking, could buy one of these specialized lenders           venture with a bank in Canada as well as a bid for an
in one of the five states where they exist and expand it           ILC in California.


CHICAGO (Reuters) - Wal-Mart Stores Inc. said                      In a second case, the judge found that Wal-Mart's
Wednesday that it won two different cases regarding                obligation to recognize the UFCW as the representative
labor election results and unfair labor practice charges in        of a small group of meat employees in the Jacksonville,
Texas.                                                             Texas, store ended in July 2000.

In one case, an administrative law judge at the National           Wal-Mart's switch to prepackaged meat eliminated on-
Labor Relations Board ruled in favor of Wal-Mart by                site meat cutting, which made it inappropriate to
reconfirming previous election results in which                    recognize meat workers as a separate bargaining unit,
employees voted against representation by the United               the company said, citing the judge's ruling.
Food and Commercial Workers (UFCW) union in
Palestine, Texas.

                                                               7
Wal-Mart Ads Don't Discount Criticism
Retailer increasingly worried about image
By Constance L. Hays                                                broadcasting three commercials nationwide that portray
THE NEW YORK TIMES                                                  it as a great place to work. Two of them feature women
Thursday, August 14, 2003                                           discussing their job satisfaction. "They give you
                                                                    opportunity to advance," says one, a black department
Wal-Mart, concerned about its public image, is using a              manager who persuaded her daughter to give Wal-Mart
consultant to analyze that image and has commissioned               a try. Another, a white mother of two who is a district
radio and TV commercials, made by Austin ad agency                  manager in charge of several stores, says, "It's not easy
GSD&M, to reverse criticism from local officials,                   to have a career and a family, but my job makes it a lot
consumers and others. It is the first time that Wal-Mart,           easier to do both." As the camera panned over her
known for parsimony in its business practices, has                  tranquil home, she said she hoped to "set a good
invested in "reputation research" such as polling                   example for my boys, that they can go out and achieve
techniques, focus groups and phone interviews and then              absolutely anything."
spent more money to repair the distressing aspects of
what it found.                                                      The ads are appearing at a time when Wal-Mart is on the
                                                                    defensive over its treatment of female employees. A
The project began about two years ago at the                        group of them filed a discrimination lawsuit against the
suggestion of Wal-Mart board members, a company                     company 18 months ago in federal court in Washington.
spokesman said.                                                     A hearing to determine whether the suit should become
The company's relationships with consumers,                         a class action, covering all women working at Wal-Mart,
employees, bankers and community leaders have been                  is scheduled for next month.
examined by the consultant, Fleishman-Hillard. Also                 So far, the commercials have focused on correcting what
facing scrutiny will be its ties to suppliers. Such an effort       Wal-Mart maintains is a false impression about its
indicates concern at Wal-Mart's highest levels about                employment record. But a lawyer for the plaintiffs said he
fallout from the company's rapid growth and enormous                thought the ads were a direct result of the lawsuit.
economic influence. With that ascent has come scrutiny
of Wal-Mart's penchant for hiring part-time workers as              "My sense is that Wal-Mart has never run ads like this
well as its resistance to unions and its treatment of               before and that the timing is more than coincidental,"
female employees, the subject of a federal lawsuit.                 lawyer Joseph Sellers said. The lawsuit includes
                                                                    accounts from many women, he said, about being told
Community opposition to building Wal-Mart stores has                that "they were unsuited to management" and from
been vociferous, and muttering is occasionally heard                others "who said they were told that the hours are too
from manufacturers that say they are constantly being               long; you should be home with your children."
pressed to sell to Wal-Mart at low prices. The project              Allen insisted that the research, rather than the lawsuit,
found that many people view Wal-Mart as a place of                  prompted the commercials. But he added: "We would
dead-end jobs and that its performance as a corporate               acknowledge that we need to get better as an employer.
citizen leaves much to be desired.                                  The lawsuit has certainly heightened our awareness of
                                                                    that."
To reverse the impression about its jobs, Wal-Mart is


It's a Wal-Mart World (excerpts)
The second-largest employer in Arizona is Wal-Mart. And for the first time in decades of surveys by Fortune
magazine, Wal-Mart again is its most admired company. Wal-Mart sets the pace and pattern for corporate
performance. Suppliers are expected to offer their best price, without negotiations. The idea of raising prices is so
out of bounds that Wal-Mart responds simply by paying the old price.

As Wal-Mart enters new fields such as apparel, entire industries are forced to redo their price structure. This pushes
production offshore to capture rock-bottom Asian wage rates. The $6 an hour jobs that left the US a decade age to
become $2 an hour jobs in Mexico now are leaving Mexico to reappear as 50 cent per hour jobs in China. Wal-Mart
has shown the way. Almost everything has become a commodity. Even the complex products must conform to a
market driven by low production costs, hyper efficient supply chains, and mass standardization.

(Guest article by Glenn Pascall, from the The Business Journal)

                                                                8
Wal-Mart Urges Radio Stations to Drop Union's Radio Spots
By THOMAS LEE
Post-Dispatch
08/13/2003
Wal-Mart Stores Inc. is demanding five St. Louis-area               denies the claim, notes the USA Today reporter actually
radio stations stop running a commercial paid for by a              attributed that information to the UFCW.
local union. In a letter sent to radio executives, Wal-Mart
calls "false, deceptive and misleading" the ad in which             Wal-Mart's letter about the ad states that, "Under state
the United Food and Commercial Workers Local 655                    and federal regulations and law, you (the radio stations)
criticizes the company's treatment of workers. A Wal-               have a responsibility to either cease and desist from
Mart executive said the company hasn't decided its next             airing them or to take other corrective actions
steps if the commercial continues to air. The union said            immediately."
Wednesday it stands behind the ad. If Wal-Mart does
go to court over the matter, the company could have a               Terry Sorsen, Wal-Mart's vice president of labor
difficult time winning its case, experts say.                       relations, said the company needed to protect its
                                                                    reputation. "We think the public has a right to have
Bruce La Pierre, a professor of constitutional law at               accurate information," Sorsen said. "If it were a close
Washington University, said that for Wal-Mart to                    call, off by a hair, we probably would not have reacted in
successfully sue the union or radio stations the company            this way. It was best to draw the line. This commercial is
must prove they acted with actual malice - that they                grossly inaccurate and the (union) knows it."
knew a statement was false and had reckless disregard
for the truth, said. That is a pretty high standard, he said.       Wal-Mart says more than 90 percent of its 1.4 million
Since the union is addressing an important public issue -           workers have medical coverage. Half have insurance
workers' health insurance - pulling those ads could stifle          coverage through the company, and the rest are
public debate, La Pierre said.                                      covered by insurance from spouses, parents, retirement
                                                                    plans, Medicare and other sources. The company also
In the Wal-Mart commercial aired here, the union says a             says workers can buy health insurance for as little as
USA Today story reported that two-thirds of Wal-Mart                $13 a pay period; family rates, regardless of the number
employees lack health insurance. The company, which                 of children, start at $57 a pay period.

Prosperity was Born at Ford, Died at Wal-Mart (excerpts)
By Harold Meyerson, Arizona Republic
You won't find any housing developments radiating                   so Wal-Mart drives down wages for workers who never
outward from the center of the new service and retail               set foot there. Controlling as it does so much of the low-
economy. Ford and General Motors are yesterday's                    end retail market, Wal-Mart has, with great success,
news; the employer that now sets the standard for                   pressured suppliers to cut their labor costs.
working class American is Wal-Mart. The nations largest
employer, with 3,200 US outlets and sales revenue of                No other American company has done as much to
$245 billion last year, doesn't pay its workers-excuse me,          destroy what's left of the US clothing and textile industry
associates-enough to buy decent cars, let alone homes.              or been so loyal a friend to the dankest sweatshops of
According to a study by Forbes, Wal-Mart employees                  the developing world. And unless American unions can
earn an average hourly wage of $7.50 and, annually, a               find the political leverage to block Wal-Mart expansion
princely $18,000.                                                   into non-Southern metropolitan areas, the company
                                                                    poses a threat to the million or so unionized clerks who
Just as Ford, GM, and the UAW once drove up wages                   work at major supermarket chains.
for workers who were nowhere near the auto factories,

Wal-Mart Loses Right to Bar Union Recruiting
The Arkansas Supreme Court overturned a trespassing                 Wal-Mart filed suit in 1999, after the UFCWU sent 300
decision that barred a labor union from soliciting                  organizers to Wal-Mart stores around the nation.
members at Wal-Mart or Sam's Club stores nationwide.
The court ruled that the retailer failed to show                    (Arizona Republic)
irreparable harm from solicitations from the UFCWU.

                                                                9
Illinois Is The New Front Line As Labor Group Turns Up Heat In Joliet
By James B. Arndorfer

Illinois has become a flash point in a long-running          the very markets where it's trying to make gains.
war between the nation's largest retailer, Wal-Mart          Mr. Husson wrote that there is "a strong
Stores Inc., and the nation's largest retail workers         correlation between high (market) share in
union. The United Food and Commercial Workers                Republican markets and low share in Democrat-
(UFCW) union has embarked on a wide-ranging                  controlled markets. We believe union/Democratic
effort in Joliet, where it has lobbied the City              influence is important here, in terms of creating a
Council and enlisted the help of other unions, as            more hostile planning environment and more
well as religious groups and community activists,            restrained blue-collar customer demand."
to pressure Wal-Mart into allowing the union to try
to organize workers at a new store slated for                The report goes on to say, "We believe that for
construction there.                                          many blue-collar workers in many big-city
                                                             markets, there is an invisible picket line circling
If the strategy is successful, it would be a long-           the non-union Wal-Mart store." A Wal-Mart
awaited breakthrough at the famously union-                  spokeswoman says the retailer has "tons" of union
resistant company, and it could provide a template           members as customers. While denying that the
for unionizing other outlets in the 2,850-store Wal-         company is anti-union, she says, "We do not
Mart chain. But even though the UFCW's chances               believe we need that third-party representation."
are decidedly better in Illinois, and especially in          Faced with a union lobbying effort focused on the
union-heavy Joliet, than elsewhere, the odds are             argument that Wal-Mart offers substandard wages
still in Wal-Mart's favor.                                   and benefits which Wal-Mart representatives
                                                             deny members of the city's Plan Commission, an
The UFCW is urging Joliet City Council members               advisory group, last month voted to reject the
not to let Wal-Mart build a second outlet in the city        proposed Wal-Mart project even though it had
unless the retailer agrees to stay neutral during an         approved an earlier version.
organizing effort something the Arkansas-based
discount giant has said it won't do. The Joliet
scrap marks the UFCW's most ambitious effort to              Wal-Mart's long reach
organize a Wal-Mart in Illinois, but it won't be the
last, as the union which has been reaching out to            If the trade council were to oppose the Joliet Wal-
religious groups, activist organizations and other           Mart, the City Council might vote it down, council
unions intends to step up organizing efforts in the          members say.
state.
                                                             Trade Council President Lynn Fieldman says the
While the UFCW faces long odds to organize                   group probably won't oppose the store, which will
stores, it has more muscle here because unions               be built with union labor. But if the store is built,
pack more clout in Illinois than in many other parts         the council will lend its muscle to any organizing
of the country where Wal-Mart operates. "If (the             effort there or elsewhere in the region. Potential
UFCW is) going to succeed anyplace, Illinois is              tactics could include a boycott, he says."We'll help
the kind of market they're going to succeed in,"             the UFCW," he says "without a doubt."
says Mark Husson, an analyst at New York-based
Merrill Lynch & Co.                                           The union managed to organize a small group of
                                                             meat-cutters in Texas, only to see Wal-Mart close
'Invisible picket line'                                      meat departments in its stores across the country
                                                             and switch to prepackaged meats. A Wal-Mart
Indeed, in a recent report, Mr. Husson noted that            spokeswoman says that move had been in the
Wal-Mart has had a tough time building                       works before the unionization effort.
marketshare in union-heavy metropolitan areas
                                                                                                   (Continued)

                                                        10
(Continued from page 10)

Illinois Is The New Front Line As Labor Group Turns Up Heat In Joliet
The union perseveres, both because Wal-Mart is                          If the UFCW organized a store, the company
the country's biggest employer, with about 1                            would "honor that if that was the vote," a Wal-Mart
million workers, and because the retailer is putting                    spokeswoman says. But analyst Mr. Husson
pressure on unionized grocery stores, which in                          questions whether the company would keep that
turn seek concessions from employees.                                   store open, for fear that the union organizing would
"Wal-Mart is essentially the third party at the                         spread. "I think it's highly unlikely that Wal-Mart
bargaining table at every retailing negotiation in                      would continue to run the store," he says.
the country,” says the national UFCW
spokeswoman.


TSA: Airport Screeners Cannot Form Union
Associated Press
WASHINGTON - A union representing                                       our organizing campaign." Collective bargaining
government workers said it will continue to                             rights were a major issue in the debate over
organize federal airport security workers despite                       creating the Homeland Security Department.
an order from the head of the Transportation                            Congress decided to let the president strip
Security Administration banning collective                              collective bargaining rights from department
bargaining. Passenger and baggage screeners at                          workers, though that decision would be revisited
New York's LaGuardia and Baltimore-Washington                           every four years.
International airports have petitioned to be                            Sen. Edward M. Kennedy, D-Mass., said the
represented by the American Federation of                               administration already has the authority to
Government Employees.                                                   suspend collective bargaining rights during a true
Agency chief James Loy signed an order                                  national emergency. "It's not homeland security,
precluding collective bargaining by any screeners,                      it's union busting," Kennedy said in a statement.
saying the law creating the agency in November                          The union has petitioned the Federal Labor
2001 gave him the authority to do so. Loy is                            Relations Authority for elections on collective
concerned that a labor contract could hinder                            bargaining by workers at Pittsburgh International
efforts to quickly make staffing changes in                             and Chicago Midway airports and plans to file
response to a terrorism threat, said his                                several more petitions soon, Witiak said. The
spokesman, Robert Johnson.                                              union has to organize at each airport individually.
"When it comes to responding to new intelligence                        The screeners earn between $23,600 to $35,400
or terrorist threats on a moment's notice, we don't                     a year, with health care, life insurance, paid
have time to check with a shop steward," Johnson                        vacation and sick leave. Before Sept. 11, the
said. Federation spokeswoman Diane Witiak said                          private-sector screeners generally earned
the union has received thousands of complaints                          minimum wage, or around $10,000 a year, and
from agency workers and intends to press forward                        often received
with its organizing. "We're not abandoning these
employees," she said. "We're going to continue




                                                                  11
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The Newsletter fo the Arizona Industrial Association
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