How 3 retailing icons got caught in battle over union ballots

WASHINGTON — Three high-profile companies, Starbucks, Costco and Whole Foods, are caught in a crossfire in a nasty fight over legislation that would make it easier for unions to organize.

"We pissed everyone off," Jim Sinegal, Costco's chief executive, said in an interview. "It's pretty tough. To get both sides shooting at you, you either have to be a duck or inept."

Just days after the three companies said they couldn't support the Employee Free Choice Act, also known as card check, Pennsylvania Republican Sen. Arlen Specter, said he wouldn't support the bill.

The bill would allow unions to avoid secret-ballot elections and organize a workplace if a majority of employees signed authorization cards. In addition, the measure would require binding arbitration if an initial collective bargaining agreement can't be reached.

Labor had been counting on Specter's vote to break an expected filibuster to block the bill. Specter, who's facing a primary challenge next year from a conservative former congressman, said it was a "close call." He said that while he supported changes in the National Labor Relations Act, the current proposal goes too far.

Though Specter made no mention of the potential compromise suggested by the three companies, Sinegal said it may have given Specter and several moderate Democratic senators the cover they needed to oppose the measure.

"We would like to feel we influenced Specter," Sinegal said.

The measure is the top legislative priority of organized labor, and President Barack Obama has previously supported it.

Unions say it's needed because some companies delay elections and try to intimidate employees before a vote. They also say that after a union is formed, companies can drag their feet on initial collective bargaining agreements for years. Unions now represent a little more than 12 percent of the nation's work force, and labor leaders see the bill as a way to increase union membership.

The business community says the measure would give unions too much power and cost them billions of dollars in additional wages and benefits at a time of economic recession and fierce global competition. Businesses also say the measure would usurp workers' right to vote privately on the issue.

Each side has spent about $10 million so far on advertising and organizing. Labor has brought in top stars from the television show "The West Wing," including Martin Sheen, Richard Schiff and Bradley Whitford, to lobby. Business ads have featured Vincent Curatola, who played Johnny "Sack" Sacramoni on "The Sopranos," as a union boss.

In late March, Costco, of Issaquah, Wash.; Starbucks, of Seattle; and Whole Foods, of Austin, Texas; announced that they'd formed the Committee for a Level Playing Field and suggested a "third way" be found to reform the nation's labor laws. The companies said they opposed ending secret-ballot elections and requiring binding arbitration for initial contracts. They acknowledged the current system was fraught with problems and suggested a time limit on holding elections and stricter penalties if a business tried to coerce its employees into opposing a union.

"We saw this thing as a train wreck," Sinegal said of the bill. "We think card check is wrong. It's not fair to employers and workers and the arbitration requirement is crazy."

The three companies offer salaries and benefit packages that are regarded as among the best in the industry.

Despite that reputation, some labor analysts say the three companies could be among the first to face unionization if the Employee Free Choice Act became law.

"I don't know their motivation, but all three are vulnerable to unionization," said Michael Honey, a humanities professor at the University of Washington Tacoma who's written several books on labor issues.

Rick Hurd, a professor of labor studies at Cornell University, said that if the bill passes, unionizing the service sector would likely be labor's first target.

"They would be targets if EFCA passed," Hurd said of Costco, Starbucks and Whole Foods, adding that organized labor thinks that with a Democratic president and a Democratic Congress, this may be its only opportunity to pass the bill in the next 25 or 30 years.

Sinegal said the three companies are just trying to do what they consider right.

"There is no hidden agenda here," he said. "Given our companies' reputations for progressive employee policies, we thought it would be taken as an effort to bring some reason to the situation."

It wasn't.

The business community called it a sellout and ill-advised at a time when support for the bill on Capitol Hill was ebbing.

"EFCA is on life support," said Rhonda Bentz, a spokeswoman for a business group called the Coalition for a Democratic Workplace. "It makes no sense to negotiate when we are winning."

Organized labor denounced the effort by the three companies as "naive," anti-union and misguided because the fight over EFCA was far from finished.

"It's not a compromise at all," said John Goldstein of the labor group Americans Right to Work. "It was written by CEOs for CEOs. It doesn't address any of the fundamental issues that must be addressed."

Goldstein said the effort by the three companies showed a major fracture in the business community. Bentz called talk of such a division "wishful thinking."

Starbucks referred questions about EFCA to Eileen O'Connor, a spokeswoman for the Committee for a Level Playing Field.

O'Connor said the three companies thought that EFCA as currently written would be unworkable and that someone needed to explore a possible middle ground.

"We are not surprised both sides lashed out," O'Connor said. "The debate has been incredibly polarized. We are not proposing a compromise; we are proposing principles that could be used for further talks."


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