In the cutthroat world of big-box retail, few corporations have cultivated a reputation for decency as assiduously as Costco. The company pays an average wage of over $20 an hour. Eighty-eight percent of its employees have health insurance. Fifteen thousand are covered by a collective bargaining agreement. Due to an internal hiring policy, stockers and callers on its floors can seriously aspire to a lifelong career at the company.
This brand of voluntary Keynesianism is not just a model for other retailers. According to the company’s Supplier Code of Conduct, “Costco Wholesale Corporation is committed to protecting the working rights and safety of the people who produce the merchandise it sells.” Intending to leverage the purchasing power of its 658 stores to raise wages and working conditions throughout its supply chain, the company claims that it “will seek to identify and utilize suppliers and facilities who share our commitment,” and that “Costco reserves the right to cease doing business with any supplier who does not share our commitment.”
So shoppers at a Brooklyn Costco may have been surprised to encounter a picket line on July 26. The crowd, estimated by organizers to be around 100 protesters, was not targeting the company’s treatment of its own employees. Rather, workers fired from Pactiv, a packaging supplier used by Costco, were protesting the wholesaler’s continued business with their former employer. They appealed to Costco’s pro-labor record in their call for a national boycott of the company and its owner, Reynolds Group Holdings, the manufacturing conglomerate behind Starbucks cups, Reynolds Wrap, Hefty paper towels and take-out containers of every shape and size.
The workers allege that the company unlawfully retaliated against them after they attempted to unionize their Kearny, New Jersey, packinghouse and manufacturing facility. The Kearny workers’ allegations are some of the latest in a raft of charges filed against Pactiv, which employs 12,100 workers across its forty-nine North American facilities, according to its annual SEC filing. Their campaign is illustrative of the monumental advantages given to employers under the National Labor Relations Board’s election procedures, and their fate exposes the limitations of voluntary corporate responsibility.
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In the past five years Pactiv has closed at least five unionized factories, displacing hundreds of workers. Its parent company, Reynolds Group Holdings, owns a growing share of the food packaging manufacturing market, having merged with or bought competitors Pactiv, Evergreen, Graham and the German firm SIG over the same period of time. Under the auspices of union-avoidance law firm Seyfarth Shaw, the company has meticulously dismantled unionization drives—as at the Kearny, New Jersey, facility where protesting workers were formerly employed—while eroding working conditions won in the past through collective bargaining.
Since 2009, unions and individuals in ten different plants have filed at least nineteen charges of unfair labor practices against Pactiv. These allegations range from refusal to bargain and repudiation of contract, to unlawful discipline and discharge of employees regarding protected activity. In the latest charge, Region 15 of the Board settled with Pactiv over unlawful language in its employee handbook. The handbook included clauses denying employees the right to discuss wages, hours and other terms of employment; prohibiting employees from addressing concerns about working conditions in non-work areas during non-work times; and suggesting that unionization is futile.