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Union Busting in Hippie Clothing? Something Stinks at Whole Foods
http://www.counterpunch.org/sharon05082009.html
By SHARON SMITH
May 8-10, 2009

Whole Foods Market is a highly profitable corporation that far outperforms
its competitors, while maintaining an aura of commitment to social justice
and environmental responsibility. Its clientele is attracted not only to
its brightly lit array of pristine fruits and vegetables, organically
farmed meats, and delectable (yet healthy) recipes, but also to the notion
that the mere act of shopping at Whole Foods is helping to change the
world.

In 2007, Whole Foods launched its "Whole Trade Guarantee," stating its aim
as advancing the Fair Trade movement -- encouraging higher wages and prices
paid to farmers in poor countries while promoting environmentally safe
practices. In addition, Whole Foods announced that 1 percent of proceeds
will be turned over to its own Whole Planet Foundation, which supports
micro-loans to entrepreneurs in developing countries. Meanwhile, the
company’s Animal Compassion Foundation seeks to improve living conditions
for farm animals, while stores periodically hold “5 Percent Days,” when
they donate 5 percent of sales for that day to an area non-profit or
educational organization.

Whole Foods also has a distinctive reputation for rejecting traditional
corporate management models in favor of decentralized decision-making,
described as an experiment in workplace democracy. There are no departments
at Whole Foods stores, only “Teams” of employees. And Whole Foods has
no managerial job titles, just Team Leaders and Assistant Team Leaders. Nor
does the company admit to having any workers, only Team Members who meet
regularly to decide everything from local suppliers to who should get hired
onto the Team. Generally, the company strives to achieve consensus at Team
meetings, where workers brainstorm about new ways to raise productivity.
And new hires need to win the votes of at least two-thirds of Team Members
in order to make the cut.

The liberal dress code at Whole Foods allows nose rings, Mohawks, visible
tattoos and other expressions of individuality to help promote its stated
goal of  “Team Member Happiness” for its relatively young workforce.
Each Team takes regular expeditions, known as “Team Builds,” to local
farms or other enterprises to educate themselves on how to better serve
their customers. When Team Members show extra effort on the job, Team
Leaders award them with “High Fives” that can be used to enter an
onsite raffle to win a gift card. When a Team Member gets fired, it is
sadly announced as a “separation.”

For all its decentralization, the “unique culture” so beholden to Whole
Foods’ supporters bears the distinct stamp of its cofounder and CEO, John
Mackey, who declared in 1992, a year after Whole Foods went public, "We're
creating an organization based on love instead of fear." The former hippie
is known for shunning suits and ties and wearing shorts and hiking boots to
meetings -- and for insisting that before the end of every business
meeting, everyone says something nice about everyone else in a round of
“appreciations”. In a 2004 Fast Company article, business writer
Charles Fishman favorable quoted a former Whole Foods executive calling
Mackey an “anarchist” for his eccentric executive style.

***

But something sinister lurks beneath the surface of Whole Foods’
progressive image. Somehow, Mackey has managed to achieve multimillionaire
status while his employees’ hourly wages have remained in the $8 to $13
range for two decades. With an annual turnover rate of 25 percent, the vast
majority of workers last no more than four years and thus rarely manage to
achieve anything approaching seniority and the higher wages that would
accompany it. If Whole Foods’ workers are younger than the
competitions’, that is the intention.

But another secret to Whole Foods’ success is its shockingly high prices.
When Wal-Mart began promoting its own organic products last year, Whole
Foods’ Southwest regional president Michael Besancon scoffed at the
notion that Wal-Mart could present serious competition. "There's no way in
the world that we'd win a price battle with Wal-Mart," he told the Rocky
Mountain News. "I'm relatively smarter than that." On the contrary, Whole
Foods orients to a higher income clientele willing to pay significantly
more for somewhat higher quality foods. Whereas the average supermarket
chain’s profits traditionally hover at around 1 percent, Whole Foods was
able to sustain a profit margin of 3 percent for 14 years after it went
public in 1992. After hitting a low of 1 percent in the economic downturn
in late 2008, “now the margins are expanding again,” according to the
Cabot Report’s investment adviser Mike Cintolo on April 26th.

Indeed, Mackey is no progressive, but rather a self-described libertarian
in the tradition of the Cato Institute. He combines this with a strong dose
of paternalism toward the company’s employees. Mackey complained about
his unique dilemma at the helm of Whole Foods to fellow executives in an
October 2004 speech: “I cofounded the company, so I’m like this father
figure at Whole Foods. I’m this rich father figure and everybody’s
pulling at me saying, “Daddy, daddy can we have this, can we have that,
can we have this, can we have that?” And I’m either like the kind,
generous daddy or the mean, scrooge daddy who says “No.”

Using a carrot and very large stick, Mackey managed to “convince” Whole
Foods workers across the country to vote in 2004 to dramatically downgrade
their own healthcare benefits by switching to a so-called
“consumer-driven” health plan – corporate double-speak for the high
deductible/low coverage savings account plans preferred by profit-driven
enterprises. As Mackey advised other executives in the same 2004 speech,
“[I]f you want to set up a consumer-driven health plan, I strongly urge
you not to put it as one option in a cafeteria plan, but to make it the
only option.”

There have been setbacks for Mackey, to be sure. He suffered public
humiliation in 2007 when he was exposed as having blogged under the false
user name "rahodeb" -- his wife’s name spelled in reverse -- between 1999
and 2006 at online financial chat boards hosted by Yahoo. For seven years,
he backstabbed his rivals -- including the Wild Oats franchise that Mackey
later purchased as an addition to the Whole Foods Empire. The Wall Street
Journal reported a typical post: "’Would Whole Foods buy (Wild Oats)?
Almost surely not at current prices,’ rahodeb wrote. ‘What would they
gain? (Their) locations are too small.’” At one point, rahodeb even
admired Mackey's latest haircut, gushing, "I think he looks cute!"

Preventing Whole Foods workers from unionizing has always been at the top
of Mackey’s agenda, and the company has been successful thus far at
crushing every attempt. Perhaps the company’s most notorious attack on
workers’ right to unionize occurred in Madison, Wisconsin in 2002. Even
after a majority of workers voted for the union, Whole Foods spent the next
year cancelling and stalling negotiation sessions -- knowing that after a
year, they could legally engineer a vote to decertify the union. Mission
accomplished.

At the mere mention of the word “union”, Whole Foods still turns
ferocious. Even when United Farm Workers activists turned up outside a
Whole Foods store in Austin, Texas, where Mackey is based, the company
called the police and had them arrested for the “crime” of passing out
informational literature on their current grape boycott. And as Mother
Jones recently reported, “An internal Whole Foods document listing ‘six
strategic goals for Whole Foods Market to achieve by 2013…includes a goal
to remain ‘100% union-free.’” Mackey launched a national anti-union
offensive in January, in preparation for the (remote) possibility that
President Barack Obama, upon his inauguration, would make it a legislative
priority to pass the Employee Free Choice Act (EFCA), allowing workers to
win unionization when a majority of a company’s workforce signs a union
card. Although union card check is standard procedure in many countries,
Mackey claimed to the Washington Post that it "violates a bedrock principle
of American democracy" and has vowed to fight to prevent its passage here.

"Armed with those weapons,” Mackey argued, “you will see unionization
sweep across the United States and set workplaces at war with each other. I
do not think it would be a good thing." Workers don’t want to join unions
anymore, Mackey declared, contradicting every recent opinion poll: "That so
few companies are unionized is not for a lack of trying but because
[unions] are losing elections -- workers aren't choosing to have labor
representation. I don't feel things are worse off for labor today."

In January, Whole Foods launched a nationwide campaign, requiring workers
to attend “Union Awareness Training” complete with Power Point
presentations. At the meetings, store leaders asserted, “Unions are
deceptive, money hungry organizations who will say and do almost anything
to ‘infiltrate’ and coerce employees into joining their ranks,”
according to Whole Foods workers who attended one such meeting.
“According to store leadership,” the workers continued, “since the
mid 1980's unions have been on decline because according to Whole Foods
‘theory’, federal and state legislation enacted to protect workers
rights has eliminated the need in most industries (and especially Whole
Foods stores) for union organization… No need to disrupt the great
‘culture’ that would shrivel up and die if the company become
unionized.”

When rumors recently began circulating that a union drive might be brewing
in San Francisco, the response from the company was immediate  --
including mandatory  “Morale Meetings” to dissuade employees. But
company leaders failed to address workers’ complaints that they have gone
without any pay raises sometimes for more than two years because Team
Leaders have neglected to hold “Job Dialogue” meetings (known as
“annual performance reviews” in traditional corporate-speak).

* * *

There was a time in decades past when liberalism was defined in part by its
principled defense of the right to collective bargaining. That liberal
tradition was buried by the market-driven neoliberal agenda over the last
three decades, allowing companies like Whole Foods to posture as
progressive organizations when their corporate policies are based upon
violating one of the most basic of civil rights: the right of workers to
organize and bargain collectively. Indeed, Whole Foods has ridden its
progressive image to absorb its smaller competitors and emerge as a
corporate giant.

As the Texas Observer argued recently, "People shop at Whole Foods not just
because it offers organic produce and natural foods, but because it claims
to run its business in a way that demonstrates a genuine concern for the
community, the environment, and the 'whole planet,' in the words of its
motto. In reality, Whole Foods has gone on a corporate feeding frenzy in
recent years, swallowing rival retailers across the country.... The
expansion is driven by a simple and lucrative business strategy: high
prices and low wages."

Indeed, Whole Foods now stands as the second largest anti-union retailer in
the U.S., beaten only by Wal-Mart. Most of Whole Foods’ loyal clientele
certainly would – and should -- shudder at the comparison.