Walmart-at-the-Crossroads-FINAL-06.04.15

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The company has been characterized as “acquisition hungry” because since 2004, Flowers has steadily acquired a variety of baking companies culminating with the acquisition of Hostess in July 2013. 189 Although Flowers continues to be headquartered in Thomasville, Georgia, it has expanded operations throughout the U.S., with particular concentration in the U.S. South and East Coast. 190 i. Labor Flowers has a relatively substantial record of labor violations. Since 2010, at least 12 unfair labor practices have been filed against Flowers Foods for actions including interference with worker organizing, discriminating against workers because of union activity, and failure to bargain in good faith. 191 From 2009 to 2014, OSHA cited Flowers for 64 violations in multiple states and issued initial fines in the amount of $154,150 – these health and safety incidents included amputations of workers’ body parts. 192 On September 11, 2012, three direct store delivery workers from Flowers Baking Company of Jamestown in North Carolina (a subsidiary of Flowers Foods) filed a federal class action lawsuit against Flowers for their misclassification as independent contractors. Workers allege violation of federal and state laws and seek overtime, interest, damages, penalties, and attorneys’ fees, as well as an end to worker misclassification. 193 The lawsuit is ongoing. Direct store deliveries account for 84% of Flowers total sales 194 and over 100 workers may be included in the class action suit. In Flowers’ direct store delivery system, distributors deliver, stock, and assemble displays of baked goods to customers (primarily groceries, mass retailers, and fast food chains). The three workers who filed the lawsuit worked on average of 50-55 hours per week without overtime pay, distributing baked goods to Walmart, Harris Teeter, Target, and Dollar General. In addition to being denied overtime pay, Flowers distributors allege that as misclassified independent contractors, they also suffered illegal deductions for equipment, insurance, product loss, and product return and unfair exclusion from employee compensation programs, plans, and agreements. For example, Flowers arranged insurance and vehicle financing for distributors and deducted insurance costs from wages. Flowers also deducted Page !43
product cost from wages if a distributor refused to deliver any increase in product orders that Flowers unilaterally imposed. In their lawsuit, the workers explain that they were not in fact independent contractors because “distributors’ job duties and ability to earn income is tied directly to the sale and promotion of products outside of their control.” When they were hired, Flowers “told distributors that they would run their businesses independently, have the discretion to use their business judgment, and have the ability to manage their businesses to increase profitability.” According to the lawsuit though, Flowers Foods directly negotiated with retailers to set the terms for: wholesale and retail prices for products; service and delivery agreements; shelf space to display products; product selection; promotional pricing for products; the right to display promotional materials; print advertisements in retailers’ newspaper ads; and virtually every other term of the arrangement. Flowers also provided “computer equipment, administrative support, warehouse space, advertisements, promotional materials, bakery trays, market advice, strategic development, and virtually every other business necessity.” 195 As a result, distributors were not allowed to decide for themselves what products to deliver, how much to deliver, when to deliver, or what products to promote or put on sale. This lawsuit and the other recorded violations demonstrate that Flowers Foods have often treated its workers unfairly. Flowers Foods is a rapidly growing company. While 10 percent of the company’s workforce has union representation, the dozen of unfair labor practice claims and lawsuits that have been filed in the past five years demonstrate that the remaining non-unionized employees are suffering labor violations. These lawsuits include failure to pay overtime wages, misclassification of workers employed as independent contractors, and illegal wage deductions. Furthermore, OSHA has found repeated health and safety violations in a number of facilities. If Walmart enforced its labor code of conduct on its suppliers, then perhaps Flowers Foods and its other suppliers would reduce labor and safety violations. Page !44
Page 1 and 2: Walmart at the Crossroads The Envir
Page 3 and 4: Table of Contents I. Introduction:
Page 5 and 6: B. Supplier 2: Pilgrim’s Pride/JB
Page 7 and 8: supply chain practices have been re
Page 9 and 10: Labor II. Walmart’s Labor and Env
Page 11 and 12: • Handle, store and transport haz
Page 13 and 14: III. Overview of Walmart’s Record
Page 15 and 16: pay their workers unfair wages and
Page 17 and 18: energy consumption derived from ren
Page 19 and 20: V. Industry Reports Along with the
Page 21 and 22: A. Supplier 1: Monterey Mushrooms,
Page 23 and 24: C. Supplier 2: Giorgio Foods, Inc.
Page 25 and 26: 2. Blueberry Industry Blueberries a
Page 27 and 28: Table 2: Naturipe Facilities in the
Page 29 and 30: B. Profile: Wage Theft in the Blueb
Page 31 and 32: known for its devastating environme
Page 33 and 34: prominent supplier to Walmart, yet
Page 35 and 36: A. Supplier 1: Chiquita The United
Page 37 and 38: B. Supplier 2: Del Monte In additio
Page 39 and 40: iii. Environment In addition to hav
Page 41 and 42: 5. Packaged Salad Industry Packaged
Page 43 and 44: days even though he attributed this
Page 45 and 46: parts of their wages go to the empl
Page 47: Fred Penny is first vice chairman o
Page 51 and 52: A. Supplier 1: Cal-Maine Foods Cal-
Page 53 and 54: to roughly 10,000 cages in each bar
Page 55 and 56: no authority under the federal wate
Page 57 and 58: 8. Dairy Industry The dairy industr
Page 59 and 60: In 2010, the Obama administration d
Page 61 and 62: Nestlé’s issues with labor do no
Page 63 and 64: Walmart, including its subsidiaries
Page 65 and 66: United States. In fact, Joel was on
Page 67 and 68: cooperative joined the fluid milk b
Page 69 and 70: Another significant problem in the
Page 71 and 72: sectors. Common violations at poult
Page 73 and 74: during incidents at facilities in K
Page 75 and 76: the company in any of these cases.
Page 77 and 78: in getting the “Humanely Raised
Page 79 and 80: labor rights are violated. The adde
Page 81 and 82: chain. “Walmart has still failed
Page 83 and 84: B. Environment Besides troubling la
Page 85 and 86: dollars in yearly revenue, 407 Schn
Page 87 and 88: i. Labor In December 2012, UNFI was
Page 89 and 90: money to non-profits “committed t
Page 91 and 92: Former Walmart President and CEO Mi
Page 93 and 94: 4. Does the price they receive, aft
Page 95 and 96: VII. Conclusion and Recommendations
Page 97 and 98: fact, Walmart’s business model ha
Page 99 and 100:
4. Establish a 40-hour minimum for
Page 101 and 102:
Endnotes and Citations 1 “Our Loc
Page 103 and 104:
46 Stacy Mitchell, “Walmart’s A
Page 105 and 106:
89 “Memoria Anual Hortifrut S.A.
Page 107 and 108:
135 “Fresh Del Monte Produce, Cor
Page 109 and 110:
182 “Flowers Foods Investor Fact
Page 111 and 112:
232 Ibid. 233 Ibid. 234 Ibid. 235
Page 113 and 114:
282 Ibid. 283 Dale Heberlig, “Off
Page 115 and 116:
332 “Tyson Fact Book,” Tyson Fo
Page 117 and 118:
377 “Seafood Statistics,”Statis
Page 119 and 120:
428 Ibid. 429 “United Natural Foo
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