US: Wal-Mart's Detractors Come In From the Cold

Publisher Name: 
New York Times
Over the last several
months, a confidential report has circulated within the headquarters
of Wal-Mart Stores, proposing sweeping changes to its employee health
care plans.

It looks like a typical corporate planning document, but it is not.
The nine-page report, written by an Emory University professor,
Kenneth Thorpe, was commissioned, paid for and given to Wal-Mart by
its longtime foes, the Service Employees International Union, and a
group the union finances, called Wal-Mart Watch. They are known for
attacking the chain, not cooperating with it.

But after waging an aggressive public relations campaign against
Wal-Mart for three years, the company's full-time, union-backed
critics, who once vowed never to let up, are lowering their

Shrill condemnations and embarrassing leaked documents are giving way
to acknowledgments of progress - and, in the case of Wal-Mart Watch,
free advice.

"It's fair to say we have been less in-your-face," said David
Nassar, the executive director of Wal-Mart Watch, which had hammered
the company in stinging newspaper advertisements and provocative
reports with titles like "Shameless: How Wal-Mart Bullies Its Way
Into Communities Across America."

The mellowing of the anti-Wal-Mart movement is an unexpected
development for the retailer, whose public image and share price were
bruised by the well-financed union campaigns. On Friday, when the
chain holds its shareholder meeting in Arkansas, investors are likely
to applaud Wal-Mart for fending off these detractors.

"It definitely has helped the company," a retail analyst at
Deutsche Bank, Bill Dreher, said. "Those attacks hurt

The union-financed campaigns were started in 2005. As the groups
turned up the heat on the company, Wal-Mart was at first defensive,
but eventually it responded in ways few of its critics expected. The
company expanded its health care plans to cover more workers, though
still not enough to satisfy the unions. And it made commitments to the
environment, such as becoming the country's biggest seller of more
efficient light bulbs.

Indeed, Wal-Mart has gone so far on some initiatives, like the
environmental programs, that it has started to draw scattered attacks
from the right, particularly from a group called the National Legal
and Policy Center that has accused the company of giving in to
political correctness.

Now, the union-backed groups appear to have concluded it would be more
constructive, sometimes, to engage Wal-Mart. That leaves them
navigating a complex situation in which they have to decide, issue by
issue, whether to shake hands with the company or to slap it.

Since late 2006, the head of the union that provides the majority of
financing to Wal-Mart Watch, Andrew L. Stern, has met repeatedly with
the chief executive of Wal-Mart, H. Lee Scott Jr., to discuss
solutions to the country's health care crisis.

Mr. Stern said his dialogue with Mr. Scott "does not end the need
for the vigilance of Wal-Mart Watch."

Wal-Mart Watch has always insisted that it does not take orders from
Mr. Stern, even though his union provides most of its financing. But
those with knowledge of Wal-Mart Watch's operations say Mr.
Stern's growing relationship with Mr. Scott has inevitably influenced
the group's behavior.

They point to the health care report Wal-Mart Watch commissioned from
Mr. Thorpe that was handed over to Wal-Mart this year, rather than
published to embarrass Wal-Mart, as it might have been in the past. It
is unclear whether the report will influence the company to alter its
health plans.

Mr. Nassar said that it was the service employees union, not Wal-Mart
Watch, that gave the report to Wal-Mart. Even within the labor
movement, Mr. Stern's work with Mr. Scott has raised eyebrows, with
some worried that he has obtained too few concessions while allowing
Wal-Mart to claim support, however limited, from an old

The less antagonistic approach from the union-backed groups is evident
inside Wal-Mart, which had hired dozens of new employees to combat the
negative public relations onslaught.

Over the last several months, the company has disbanded a
campaign-style war room set up in 2005 to do battle with Wal-Mart
Watch and another group,, which is financed by the
United Food and Commercial Workers Union.

And Wal-Mart has disbanded an advocacy group, called Working Families
for Wal-Mart, intended to rally support for the company (and serve as
a counterbalance to the anti-Wal-Mart groups). A company spokesman
would not comment for this article.

Wal-Mart Watch and still level occasional attacks
against Wal-Mart, and remain potent watchdogs on some issues. That was
made evident this year, with the case of Deborah Shank.

Ms. Shank, a shelf stocker at a Wal-Mart in Missouri, suffered brain
damage in a car accident and won an insurance settlement of $700,000.
Wal-Mart then tried to recoup more than $400,000 from her, to cover
what the company had spent on her medical expenses.

Wal-Mart Watch and quickly swung into action.
Wal-Mart Watch, for example, set up a Web site that allowed thousands
of people to e-mail the top 40 executives at Wal-Mart, expressing
their opposition to the company's position.

After the groups' efforts drew heavy - and overwhelmingly negative
- media attention to Wal-Mart's conduct, the company backed down
in April, saying it would forgive the expenses.

Such campaigns, many of them created by the union-backed groups or
amplified by them, seemed to materialize every few weeks beginning in

That year, the newly formed Wal-Mart Watch obtained a copy of an
internal Wal-Mart memorandum proposing ways to cut employee health
care costs by hiring fewer unhealthy workers.

That same year, when was founded, the group paid for
TV commercials that questioned whether Christians should shop at
Wal-Mart, given its wages and benefits. "Jesus would not embrace
Wal-Mart's values of greed and profits at any cost," it said.

But such flare-ups are far rarer now, and they tend to attract
significantly less attention.

Leaders of both groups said their original burst of activity was never
sustainable, and was intended as a quick way to attract attention.

"You can't keep up that white hot level of energy," Meghan
Scott, the communications director at, said.

Mr. Nassar, of Wal-Mart Watch, said his group needed to "transition
away from being a campaign into being an organization that is here for
the long haul."

Much like a political campaign after Election Day, the groups have
reduced their staffs. Wal-Mart Watch, which once had 40 workers, now
has 10. had up to 12 workers, but has about 6 today.
And its aggressive founders, the former political operatives Paul
Blank and Chris Kofinis, left in early 2008.

Both groups insist that, even if there is a change in their tone or
size, they have not wavered from their mission of fighting to make
Wal-Mart a better employer that pays higher wages and offers more
generous health care.

"I don't think there has been significant progress," on those
fronts, Ms. Scott said. Wal-Mart, she said, still requires workers to
meet deductibles ranging from $700 to $4,000 a year for their health
insurance. And most workers earn less than $20,000 a year.

But Mr. Nassar and Ms. Scott acknowledge that the appetite for
criticism of Wal-Mart, which seemed insatiable at first, has waned,
especially in the news media. "There has been a certain amount of
fatigue about writing the Wal-Mart-is-bad story," said Mr. Nassar.
Ms. Scott described "a cooling down of the Wal-Mart story."

Both said their groups are pursuing different, perhaps less
high-profile, strategies than they did in 2005 and 2006. Wal-Mart
Watch, for example, wants to be viewed as the best source of outside
research on Wal-Mart; is reaching out more to
regional news outlets, rather than big national newspapers.

Both said they would remain critical when it made sense. "As the
company makes changes, it becomes harder to be critical," Mr. Nassar
said, "because our critique has to become more

"But that's O.K.,"
he added. "We didn't sign up for an easy job."
AMP Section Name:Retail & Mega-Stores
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