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As the New York Times is reporting, a new study by Cornell University professor Kate Bronfenbrenner has found that employers threatened to close plants in 57 percent of union organizing drives, and threatened to cut wages and benefits in 47 percent.

Unfortunately, it now appears to be that several employers - many of which have had stable relationships with their employees for years - have begun to follow Wal-Mart’s lead and get far more aggressive with employee groups seeking to organize. Bronfenbrenner writes:

What distinguishes the current organizing climate from previous decades of employer opposition to unions? The primary difference is that the most intense and aggressive anti-union campaign strategies, the kind previously found only at employers like Wal-Mart, are no longer reserved for a select coterie of extreme anti-union employers.

The report, titled “No Holds Barred: The Intensification of Employer Opposition to Organizing,” is being released today by the Economic Policy Institute. From the report:

Overall, 12.4% of U.S. workers are represented by unions, a density far below what would be the case if all workers who wanted to belong to a union could freely do so. In fact, studies have shown that if workers’ preferences were realized, as much as 58% of the workforce would have union representation.

Of course, we know that one of the ways to rectify this would be federal legislation - the Employee Free Choice Act, perhaps??

For more information on the report, including the press release, fact sheet, and the report itself - click here.

Find the New York Times article, plus a video on how when it comes to unions Starbucks has made itself into the coffee drinker’s Wal-Mart, after the jump.

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To sum up: Wal-Mart cheated on its taxes, got caught, appealed its fines, lost the appeal, appealed THAT loss, and now has been told to go home again. Wal-Mart’s tax avoidance case in North Carolina, the breakthrough case that spawned a huge Wall Street Journal series, caused several state governments to re-examine their tax laws, and made REIT a household name, has taken another turn against the retail giant as the North Carolina Court of Appeals has ruled against them again:

“The Secretary acted within his lawful authority when he assessed additional taxes against plaintiff as a result of the combination of plaintiff with two related entities,” wrote NC Court of Appeals Judge Donna Stroud in her opinion.

Earlier this year, at the trial court level, Judge Clarence Horton ruled against Wal-Mart in its case filed back in 2006. Wal-Mart was seeking a refund of the over $30 million it was assessed by the North Carolina Department of Revenue for its use of a “captive REIT” tax strategy. In denying Wal-Mart’s claims then, Horton wrote:

“[Wal-Mart does] not deny the facts demonstrating the circular journey taken by the ‘rents’ paid by these plaintiffs, but contend[s] that on each leg of the journey [Wal-Mart was] only taking advantage of a lawful deduction afforded them by then-existing tax law. Such a piecemeal approach exalts form over substance, however …”

That’s twice now - at the trial court level and in the appeals court - that Wal-Mart’s attempt to recoup its tax money has been denied. You can find more background on the REIT strategy on our blog here, or in our tax report here (which also lays out several other tax avoidance schemes used by the company).

Wal-Mart loses appeal to get $30M in North Carolina tax refunds [Triangle Business Journal]

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Colorado’s state legislature has decided that it really, REALLY doesn’t want Wal-Mart to even remotely have the opportunity to use a certain state corporate income tax avoidance scheme. The scheme in question is the now oft-talked about captive REIT, or captive real estate investment trust. If captive REIT sounds familiar, that would of course be because the Wall Street Journal broke the news in early 2007 that Wal-Mart was in effect paying rent to itself on its own store properties, and then deducting that rent from its state income taxes. For more of our own coverage, you can check this out. It should be noted that Wal-Mart lost the original lawsuit in North Carolina that sparked debate on the whole REIT issues earlier this month.

Anywho, back to Colorado - our beautiful 38th state and birthplace of the mouth-watering rocky mountain oyster phenomenon. Yesterday, the Colorado House Finance Committee supported a bill that would prevent businesses from taking advantage of the REIT scheme. Rep. Claire Levy, D-Boulder, introduced the legislation, citing the previously mentioned WSJ piece to drive home why the bill was necessary.

What has Levy so upset is that even though the money stayed within the corporation, Colorado could potentially lose millions of dollars in tax revenue. While Levy has been unable to yet find examples of the practice taking place in Colorado, she said House Bill 1093 protects the state from lost revenues if a business were to implement the strategy.

You know what else would help keep businesses from using tax schemes like this? Becoming a state that uses combined reporting, which essentially treats a parent company and its subsidiaries as one company for state income tax purposes. Why did Rep. Levy choose to push this legislation instead of combined reporting? Well, you see, because Colorado already is a combined reporting state. Better to be safe than sorry is as good a saying as any to follow, however, and from glancing over Colorado’s combined reporting requirements, it would appear that filing a combined report wouldn’t necessarily be mandatory. So cheers to Colorado for covering all the bases...if only all statehouses were so thorough.

Closing tax loopholes [Denver Daily News]

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When we hear about Wal-Mart being in the ‘top-five’ of something, we usually assume it’s in CEO salary, quarterly earnings, highest number of lawsuits pending against them or worst places ever to buy bassinets.  Today it’s among the worst corporations on worker’s right to organize. The International Labor Rights Forum [ILRF] released a report today called: “Working for Scrooge: 5 Worst Companies for the Right to Associate,” and guess who made the list?  We weren’t surprised either.  Wal-Mart has a very real history of anti-union propaganda and bigotry. 

The report cites several of the more highly-publicized anti union stories such as Jonquiere, Quebec where a tire and lube shop was shut down after workers successfully unionized it and Jacksonville, Texas, where the meat department of a retail outlet successfully unionized and Wal-Mart responded by shutting down the meat department in every Wal-Mart, nation-wide.  Will the newly-unionized Saskatchewan outlet meet the same fate?  We sure hope not…

Other finalists included: Dole, Del-Monte, Russell Athletic, and Nestle.  The union-busting must be stopped.  Write your local representative and tell them to support the Employee Free Choice Act today! 

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According to Good Jobs First and The Wall Street Journal, a large chunk of sales tax revenue gets redirected to retailers like Wal-Mart, a company that pockets an estimated $70 million a year in sales tax revenues.

At least that is the finding of a report released today by Good Jobs First, a nonprofit research group here in Washington:

Most of us don’t realize that in a majority of states with a sales tax, a portion of the money actually goes into the pocket of the retailer under programs set up by state and local governments. In this first-ever comprehensive national analysis of the subject, Good Jobs First finds that the public sector is losing more than $1 billion a year through these sales-tax diversions. A large share of revenue gets redirected to giant retailers such as Wal-Mart, a company we estimate pockets more than $70 million a year in sales tax revenues.

The state laws discussed in the report allow retailers to keep a portion of sales-tax revenue to offset the cost of collecting the funds in the first place, a reasonable enough excuse (especially since state governments are so flush with cash at the present). But does anyone really, and I mean REALLY, believe that Wal-Mart spends $60 million a year collecting sales tax? In this age of computer everything and electronic money transfers, I have a hard time believing it costs more than a fraction of that.

As it stands, many states have calculated a vendor compensation rate, which can be applied to a percentage of sales tax revenue to determine how much a retailer gets to keep for its trouble. As the WSJ reports, Good Jobs First has identified 13 states that impose no ceiling on the total amount retailers can keep. In states such as Illinois, Texas, Pennsylvania and Colorado that vendor compensation rate can be applied to the full amount of sales tax a company collects, resulting in substantial returns for companies like Wal-Mart. Good Jobs First has estimated the givebacks in these states - Illinois ($126 million), Texas ($90 million), Pennsylvania ($72 million), and Colorado ($69 million). Jesse Drucker at the WSJ kindly puts some perspective on those numbers - for example, the $90 million Texas gives away by not capping vendor compensation would cover the $82 million price-tag needed to fund that state’s primary pre-kindergarten program.

For what its worth, the Illinois Revenue Department was quoted as saying the state has tried to cap the compensation program, but relentless lobbying by the retail industry has so far kept legislators from making changes.

Skimming the Sales Tax: How Wal-Mart and Other Big Retailers (Legally) Keep a Cut of the Taxes We Pay on Everyday Purchases [Good Jobs First, November 2008]

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We blogged about this yesterday, what with the double taxation in Connecticut and the various state officials telling Wal-Mart to stop. Well, the Hartford Courant obtained a copy of CT AG Blumenthal’s letter to Wal-Mart, and here it is. A sampling:

Please review with your Connecticut stores whether they are complying with Connecticut law, and report back to me your findings. If they are not complying, please report to me how you intend to refund customers for sales tax erroneously charged, and how you intend to ensure that your store and employees comply with Connecticut law in the future.

I return, yet again, to my favorite quote from yesterday‘s article:

[Wal-Mart] spokesman Dan Fogelman said Monday evening that although he has no idea what Connecticut state tax law is, his company is following it.

Dan and Wal-Mart better do their homework…

Connecticut Attorney General letter to Wal-Mart

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Remember back in June, when the FDA warned consumers about eating certain kinds of tomatoes coming out of Mexico due to potential salmonella contamination? And then expanded that warning to include certain peppers as well?  All vendors of these products, including Wal-Mart were to halt the sale of such items.

Cheryl Grubbs is filing suit against Wal-Mart Stores, Inc, alleging that her husband, Brian Grubbs came close to death after eating several jalapeno peppers that were purchased at a Wal-Mart and tainted with salmonella in an article published today in LawyersandSettlements.com.

[An earlier version of this blog post mentioned that the FDA recall in question occured on June 25, 2008. This was incorrect: we apologize for the mistake.]

Tomato-Pepper Salmonella: Why the Grubbs are Suing Wal-Mart

Dolores, CO: “Truckloads of contaminated jalapenos were turned back at the border before we bought them at Wal-Mart,” says Cheryl Grubbs, “so why did Wal-Mart still have them in their store?” Her husband, Brian Grubbs, almost died from the tomato/pepper salmonella outbreak, and Cheryl is furious because his illness could have been avoided.

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue focuses on the big story of the week - Wal-Mart’s efforts to mobilize its managers across the country to warn of a Democratic win in November. The company has been holding mandatory meetings for its store managers and department supervisors (possibly in violation of state and federal election law), who are being warned that if Democrats win in November it could lead to potential store unionization. The meetings focus on a piece of proposed legislation called the Employee Free Choice Act, which could make it easier for stores to unionize if it’s the wish of a simple majority of store employees. Read all the major stories on Wal-Mart’s efforts, plus reaction from Wal-Mart Watch Executive Director David Nassar.

Beyond the possible election law violations, the Washington Post and Chicago Tribune report on new toy safety legislation making its way through Congress. In addition, more legal problems for Wal-Mart - the first Salmonella-related lawsuit has been filed, and Wal-Mart is the defendant. Also, a new story in the Arkansas Business Journal describes how Wal-Mart knew of the existence of labor violations prior to the filing of the recent wage/hour class actions.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe.

Wal-Mart Watch Weekly Update for Elected Officials

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In addition to an interactive map detailing Wal-Mart’s land use across the United States, researchers will be interested to note the map’s companion report: “Perpetuating Sprawl: Understanding Wal-Mart’s Development in Pennsylvania, New York, California, and Ohio”. From the introduction:

By utilizing the “hub and spoke” distribution strategy to maximize effectiveness, Wal-Mart was and still is able to outpace its competitors and build more stores. With a network of distribution centers around the country, Wal-Mart supplies its stores with ease. In fact, “while Wal-Mart needs only 10% of its stores’ square footage for inventory, competitors need 25%. That’s because each store is within a day’s drive of a distribution center.”

Now, after conquering most of the United States, Wal-Mart is at a crossroads. Currently, Wal-Mart is trying to adapt to local and regional preferences while scaling back overall domestic development. It is
within this context that we examine Wal-Mart strategies in California, Ohio, Pennsylvania, and New York as a microcosm of America.

The goal of this paper is to provide insights into Wal-Mart’s growth patterns in four states outside of its original sphere of influence, and to help local and regional planners understand where Wal-Mart might
build its next facility.

Click here to download “Perpetuating Sprawl” (PDF)