Costco Petitions For Worker Comp Reform

Mar 30, 2004
George Anderson

By George Anderson

Costco is known for having good relations with its union and non-union employees but some are having a problem with the retailer’s support for a petition initiative in California
which seeks to repeal the current workers’ compensation program.

According to a Los Angeles Times report, Costco spends more on workers’ comp insurance in California than in all the other 35 states where it operates combined. Californian
employees make up approximately one-third of Costco’s national total, yet the company says 70% of its workers’ compensation costs are being spent in the state.

Last week, Governor Arnold Schwarzenneger took part in pro-initiative event at a Costco warehouse, which was followed by the retailer ordering enough petitions to get up to 900,000
signatures in support of the governor.

Costco has set up tables in it locations asking its shoppers to support the initiative. The problem, say Union officials, is Costco asking its employees to man the tables.

Chuck Mack, the Western region vice president for the International Brotherhood of Teamsters said, “We know there are going to be changes in the law, and we’ve been cooperating
with management in an attempt to come up with a solution.”

But Costco’s alleged efforts to politicize the workplace could “submarine the process,” he said.

Costco’s chief legal counsel, Joel Benoliel, responded, “We’ve instructed our managers in every building in California that if any one of our employees is uncomfortable with
soliciting signatures, they should go do something else. They’re not going to suffer any adverse consequences whatsoever.”

Moderator’s Comment: What are your thoughts on the conflicts associated with a company using its employees to pursue
a political solution to an issue management either supports or rejects?

The Teamsters have written to the California Attorney General, Bill Lockyer, to ask him to look into Costco’s behavior. The union contends the company has
broken state law that “strictly prohibits an employer from adopting any policy which has the effect of controlling or directing or tending to control or direct the political activities
or affiliations of employees.”
Anderson – Moderator

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