Walmart Wins Anti-Union Battle at Supreme Court of Canada

It looks like Walmart has won a small but significant legal victory in its campaign to keep its employees un-unionized.

From the Edmonton Journal: Supreme Court buys Wal-Mart stance on store closure

The Supreme Court of Canada has upheld the right of Wal-Mart, the world’s largest retailer, to close shop after employees unionized at an outlet in Jonquiere, Que.

In a 6-3 decision, Justice Ian Binnie, citing previous case law, noted there is no legislation in Quebec that obliges any employer to remain in business, even if it closes for “socially reprehensible” reasons.

The store closure, which followed one of the first unionizations of Wal-Mart employees in North America, drew continent-wide attention and the high-stakes appeal has been closely watched by labour and business….

I’ve blogged about Walmart’s anti-union stance before (here and here).

A couple of things are worth noting, in light of this ruling. First, note that the SCC said that Walmart is allowed (legally) to close stores, even when it does so for “socially reprehensible” reasons. That’s a good reminder that there is a difference between what’s ethical and what’s legal. There’s plenty of overlap between the two, but there is also (and has to be) some divergence. The Supreme Court’s job is strictly to rule on the legality of Walmart’s behaviour. But at the same time, it’s interesting to see the highest court in the land referring to Walmart’s actions in a way that at least implies disdain.

Another point, one I’ve made before, is that it’s important, ethically, to distinguish between having an anti-union stance, on one hand, and engaging in particular anti-union activities, on the other. There’s nothing outrageous about a company being anti-union, especially a company whose entire business model is rooted in providing low-cost goods to (mostly) low-income consumers. After all, unions (understandably) want to drive up wages, and higher wages means higher prices. So while there certainly are particular union-busting practices that are unethical (and closing a store may or may not be one of them), there’s nothing unethical about trying to keep unions out.

One final point. Unions generally have 2 main goals…to drive up wages, and to secure for members suitable working conditions. Any company that manages to keep its employees happy with regard to non-wage issues is much less likely, it seems to me, to have to fight battles over unionization.
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Here’s the story as reported by the Globe & Mail: Court rules against Wal-Mart workers
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Clarification:
The bit about “socially reprehensible reasons” was actually the current court quoting an earlier judgment from the SCC, in a case called Place des Arts. (Thanks Jim).
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Correction: Here’s the corrected link to the SCC’s decision: Plourde v. Wal‑Mart Canada Corp. 2009 SCC 54

5 comments so far

  1. DarryleHuffman on

    There some decisions which are ethically right to make but are morally wrong. Is this case where what is right ethically from business standpoint may be morally wrong.

  2. Chris MacDonald on

    Darryl:

    Well, it could be, but I don’t think it is one of those cases.
    I think there’s a good argument (outlined above) for why Walmart is doing the right thing.

    Chris.

  3. Max on

    Yes, ethics definitely goes beyond the law. Therefore, being legally successful does not mean that you are “doing the right thing,” and many of us do accept the fact that there are grey areas in ethics.

    Wal-Mart is concerned with consistency i.e. aligning corporate social responsibility with the business plan and ensuring that the bottom line is not compromised. Wal-Mart is known for poor wages and inadequate health care coverage, which are consistent with its low (price and) margin business model, which benefits consumers to a great extent. But consumers are not the only stakeholders, as discussed below…so…employees are often offered stock options based on performance, as a form of compensation.

    Leaders must serve the interests of the organization and its stakeholders i.e. owners, leaders, managers and other employees, including women (and children, where applicable)customers, suppliers, the community, the government, etc. i.e. all those upon whom the firm depends for its survival and success, so that all stakeholders are geared toward working at maximum potential. This is not easy, by any means, but should be seriously attempted.
    Leaders, unions and employees should build trust by engaging in open communication and focusing on mutual gains and solutions that consider the separate and joint interests of all parties, instead of engaging in acts that destroy trust, e.g., delay tactics or threats, strikes, picketing, lockouts, etc.! Unfortunately, this is easier said than done, in many cases, although “open book management” is being followed in many successful business organizations, whereby information is shared with employees in the hope that brainstorming and employee participation in decision making will lead to increased profitability and benefits for all.

    On the good side, in the USA, Wal-Mart pushed for a higher federal minimum wage. Wal-Mart also moved toward social responsibility by reducing energy usage and pressuring distributors and suppliers into being more fuel-efficient. The decision to be ecologically friendly is more in synch with its business model. (Starbucks, whose employees receive full health care benefits, was praised for its efforts to lobby for improved medical compensation packages.)

    Maxwell Pinto, Business Author
    http://www.strategicbookpublishing.com/Management-TidbitsForTheNewMillenium.html

  4. SevenCell on

    Hi Chris, Wow…I can’t get over how you engage…Awesome topic!!! Its so incredibly hard to separate emotion from reasoning with questions like this one. Here goes:

    One: I’ve been especially interested of late in the idea of common goods and the decades long economic discussion of “tragedy of the commons” (see wikipedia or George Mason U’s encyclobpedia). I think you could build a reasonable case that employees (the labor market) are themselves a “common resource”; and thus if you abuse employees (say for example compressing wages so low that they can’t feed cash flow back into the economy…changing jobs isn’t always easy when you’re an hourly), you are abusing a common good. In a sense, I guess I’m building a case that you shouldn’t even be allowed access (especially in very large quantities) to the labor pool unless you treat that resource with the *highest* degree of respect and ethics. Having a union doesn’t necessarily equate to having a fight. Companies can allow unions and engage a productive dialogue.

    Two: Price is not necessarily the holy grail. Wal-Mart has arguably destroyed thousands and thousands of cottage businesses; and in so doing, community cash flows that go along with them. Price is important, nonetheless. Also, Wal-Mart routinely abuses eminent domain as though it were a country club pass.

    Three: Here is my craziest/wackiest angle: I believe that technology is going to enable us to push the envelope in the next century(s) on *demanding* a greater alignment of business management with shareholder, communities, AND employees. See a small “fantasy piece” I did here: ( http://sevencell.wordpress.com/2009/11/24/an-orwellian-approach-to-corporate-governance-how-bout-we-watch-big-brother/ ) Just swim past the excessive rhetoric at the front end to the picture of the MRI machine: My Asmovian/Orwellian/nut-case? question :-)…Would it be possible one day to ferret out leaders who could better balance ALL interests and simply jettison leaders who don’t have that innate ability…quick as that? Regarding unions then: I’m simply pointing here to potentially DEMANDING a much higher alignment of business leadership with labor without necessarily sacrificing other goals (throwing the baby out with the bathwater). I believe firmly that we have every right to *demand* much more from our leaders. I am optimistic that democratization is being facilitated by the Internet and other technologies and will enable more and more of that demand in decades ahead.

  5. […] pocket is a dollar taken out of someone else’s pocket. That’s as true for Walmart or GM as it is for the Government of Ontario. « Business, Football, and Incentives […]


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