Love the Worker, Not the Union, a Store Says as Some Organize

May 24, 2003
By AARON NATHANS, New York Times

MADISON, Wis., May 23 - In just 23 years, Whole Foods
Market has grown from a single store in Austin, Tex., to
the largest natural foods chain in the nation. It is widely
praised for its folksy style and high-quality goods,
offering more than 20 kinds of granola, well-stocked wine
shelves, attentive service and a hearty bow to Mother
Earth.

John Mackey, the chairman and chief executive, founded the
company on the principles of open communication and
empowered employees. Whole Foods workers here have found,
however, that the principles do not include embracing labor
unions.

The first - and so far only - successful union drive in
Whole Foods' history took place last year in this liberal,
pro-labor state capital. In the aftermath of the drive,
there were allegations of dirty tactics by each side; a
personal plea from Mr. Mackey for the Madison employees to
"expand into love"; and the firing of two pro-union
employees over what they say was, almost literally, spilt
milk.

Many supermarket workers count on unions for gains in
salary, working hours and conditions. Sometimes these
concessions drive prices up, and union campaigns often
create bad feelings between labor and management. But the
tension is especially striking at Whole Foods, which prides
itself on social consciousness. Labor advocates now speak
of Whole Foods in the same breath as Wal-Mart Stores, which
has fiercely kept itself nonunion.

In a written statement, Michael Duffield, a company
spokesman, said that Whole Foods fosters "a decentralized,
nonbureaucratic environment, and this ability to be fast
and flexible is a large part of our success."

"Work environments dominated by unionization are not often
characterized in this way," Mr. Duffield added, "and that
is why John Mackey, and Whole Foods Market, does not
believe that representation by a union is in the best
interests of team members" - the company's term for
employees. Mr. Mackey declined to comment.

According to Jennifer Chatman, a professor of management at
the University of California at Berkeley: "The chain prides
itself as a unionless utopia where employees are team
members empowered to solve problems. Because it's a
progressive company, it views unions as a sign the company
isn't providing employees with all that they need. If you
look beyond the immediate financial implications, there's a
real identity issue here."

But the financial implications could affect Whole Foods'
long-term profits. The company's "unique, labor-intensive
culture is indicative of its emphasis on customer service,"
said Neil Stern, a senior partner for McMillan/Doolittle
L.L.P., a retail strategy company. "With unionization comes
higher labor costs, and Whole Foods could either absorb
those added costs or pass them on to their customers."

Whole Foods opened its Madison store in 1996, and workers
soon found themselves at odds with management over a host
of issues, like rising health insurance costs. The
rumblings grew louder last spring, when the company told
store employees they would have to adhere to a dress and
appearance code. In this casual-dress city, that meant
losing the brightly colored hair, political buttons, and,
for Debbie Rasmussen, a "juice bartender," the piercing
from her upper lip. "It struck a nerve with a lot of
people," Ms. Rasmussen said.

Mr. Duffield said the company does not require uniforms,
and the Madison dress code had been more liberal than at
other stores. Despite union claims to the contrary, he
said, bringing the code into line with other Whole Foods
stores did not change its commitment to celebrating
individuality.

Whole Foods acknowledged a larger breakdown in
communication, blaming store managers for getting away from
the company's culture. The store changed the top managers
at the Madison store in May, but the move did not satisfy
many workers who believed the problems came from higher up.

Salary issues also fueled the push for a vote. Both Whole
Foods and union officials agreed that the store paid
competitive wages. Mr. Duffield added that the company has
more employees per store than many grocers and a
substantially larger ratio of full-time to part-time
workers.

Unlike union stores, however, where raises are given by
seniority, pay increases are disbursed more subjectively.
At the Madison store, workers with the same seniority found
they were earning different amounts, and in some cases, new
employees made more than existing ones, said Brendan
O'Sullivan, a deli department worker who helped organize
the campaign to join United Food and Commercial Workers
Local 1444.

Soaring health insurance costs were also taking a bite out
of paychecks. Many unionized grocery stores fully cover
employee insurance, but Whole Foods does not, said Jim
Hepner, organizing director of Local 400 in Landover, Md.

When Madison employees voted 65 to 54 in July to organize,
Whole Foods executives appeared crestfallen.

In a memo to employees several days later, Mr. Mackey
called the vote "a very sad chapter in the history of Whole
Foods Market."

"Madison made a mistake in their choice. It may take time
for them to realize it, but I believe that they eventually
will. We all make many mistakes in life. It is all part of
our growth process because that is how we learn, that is
how we grow," Mr. Mackey wrote. "When confronted by great
stress in life, we have but only 2 choices: 1. Contract
into fear. 2. Expand into love."

The workers contend that since the July election,
management has fought them and dragged its feet at every
turn. A few days after the election, Whole Foods appealed
the vote to the National Labor Relations Board, asserting
that several workers sought employment at the store to
influence the election, and that a different union
unlawfully courted a Whole Foods employee by offering him a
job elsewhere in exchange for his vote for the union. The
union asserted that it did not offer the employee any job
until after the votes were counted. The board rejected
those claims, ruling the election valid, and collective
bargaining began.

But Whole Foods' lawyers canceled two bargaining sessions,
citing time conflicts. Local 1444's president, Dan Welch,
said Whole Foods was trying to stall until a year after the
election, when it would be legal for pro-management workers
to petition to decertify the union. The company says it is
bargaining in good faith.

"It's just kind of goofy, to be real frank with you," said
Chris Sauter, the Local 400 organizing director in
Maryland. "It's, `Look, we want you to be a part of it, we
want you to have some part to play in the decision-making
process, take ownership of the store.' Yet when it comes to
really getting a say and participating in collective
bargaining, they fight it tooth and nail."

In November, two employees who were leaders in the
unionization drive were fired over an incident that they
say they thought was innocent enough. Ms. Rasmussen said
she accidentally made a drink with soy milk rather than
skim milk. Instead of pouring it down the drain, she gave
it to a co-worker, Julie Thayer, to drink, they said.

Both were sent home, and they were fired the next day. They
appealed to the National Labor Relations Board, which
dismissed their claim. The union has appealed.

"They don't recognize the hypocrisy that this company has
made billions on social and environmental consciousness,"
Ms. Rasmussen said. "It's so hollow."

Mr. Duffield said the two were fired for cause and the
dismissals were unrelated to their views on unionization.
Whole Foods employees, he said, are a largely happy bunch
who appreciate perks like profit-sharing and 5 percent
days, when that portion of after-tax income is donated to
community organizations.

"A large part of the appeal of Whole Foods Market to our
millions of customers and our team members, they tell us,
is based on the fact that we are making the world a better
place, and have been for over 22 years," Mr. Duffield said.

Things, meanwhile, have gotten ugly in Falls Church, Va.,
where a second Whole Foods store was set to vote last month
on unionizing. After charges of union and management
misdeeds flew back and forth, the National Labor Relations
Board halted the election.

The labor board is investigating numerous union charges,
including one that Whole Foods coerced and retaliated
against pro-union employees. Whole Foods packed the store
with workers from other locations to influence the vote,
the union contends. Mr. Duffield would not comment. In an
April 11 letter to employees, Mr. Mackey asserted that some
workers did not know they were formally supporting the
union when they signed their union cards.

Unions have also recently picketed the Chelsea store in
Manhattan and stores in northern New Jersey, and union
advocates are starting an organizing drive in Austin, Whole
Foods' hometown.

Unions around the country have added Whole Foods to their
boycott lists, which also include Wal-Mart.

Jeff Metzger, publisher of Food World magazine in Columbia,
Md., said successful companies tend to become targets of
organizers. "They've moved the needle forward in the last
few years," he said of Whole Foods. "Success breeds
interest."