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Wal-Mart Working With Foes

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By MICHAEL BARBARO

New York Times News Service

Published: June 14, 2008

In the past 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.

However, 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 putting down their cudgels.

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.

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

An Unexpected Response
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 that few of its critics expected. The company expanded its health care plans to cover more workers, though still not enough to satisfy the unions. It also made commitments to the environment.

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 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.

Stern said his dialogue with 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 Stern, despite its financing. However, those with knowledge of Wal-Mart Watch's operations say Stern's growing relationship with Scott has inevitably influenced the group's behavior.

They point to the health care report that Wal-Mart Watch commissioned from 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.

Groups Have Changed Their Approaches

Leaders of both groups said their original burst of activity was never sustainable.

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

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."

Both groups insist that they have not wavered from their mission of fighting to make Wal-Mart a better employer.

"I don't think there has been significant progress," on those fronts, 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.

Nassar and Scott acknowledge that the appetite for criticism of Wal-Mart, which seemed insatiable at first, has waned, especially in the news media.

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

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