Black Friday Blues

More and more retailers are opening even earlier on Thanksgiving Day in an effort to compete during this year's compressed shopping season. But are they also creating more headaches for HR leaders, who have to wrestle with lower worker morale?

Wednesday, November 27, 2013
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By now, the headlines are pretty much burned into the American consciousness. Brick-and-mortar retailers, apparently feeling disadvantaged when competing both with each other and online powerhouses such as Amazon, have raised the "we are opening even earlier on Thanksgiving Day" stakes.

Black Friday? It's quickly becoming a quaint notion. Kmart, for example, is opening its doors at 6 a.m. on Thanksgiving (but it is closing at 4 p.m. and reopening at 8 p.m.). Other retail chains including Old Navy and Gap are opening Thanksgiving morning. Walmart and Sears open at 8 p.m. while dozens of other retailers are opening at 9 p.m. and staying open overnight through Black Friday.

Mixed in with the Black Friday "creep," there is a national move to try to raise the federal minimum wage and, in some cases, boost union organizing at retail chains. For some employers, the results are generating even more negative headlines.

For example, the National Labor Relations Board's Office of the General Counsel recently found that Walmart violated the rights of its employees as a result of activities surrounding employee protests, and the NLRB authorized complaints on alleged violations of the National Labor Relations Act.  In one case, according to the complaint, captured during two national television news broadcasts and in statements to employees at Walmart stores in California and Texas, Walmart threatened employees with reprisal if they engaged in strikes and protests on November 22, 2012.

Also, the NLRB says Walmart stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington unlawfully threatened, disciplined and/or terminated employees for having engaged in legally protected strikes and protests. And Walmart stores in California, Florida, Missouri and Texas "unlawfully threatened, surveilled, disciplined and/or terminated employees" in anticipation of or in response to employees' other protected concerted activities, according to an NLRB statement.

Ultimately, the Office of the General Counsel found no merit to alleged violations of the NLRA against Walmart stores in Illinois, Texas, California and Washington.

On another front, one Walmart store in Canton, Ohio instituted a holiday food drive not for the homeless or needy but for Walmart co-workers, adding fuel to the minimum-wage fire.

With the negative publicity generated by Black Friday-related headlines and increasing protests aimed at raising minimum wages across the country, should HR leaders in the retail industry expect more pressure to change current wage and hour policies? For example, could these scenarios cause legislators to press for a higher national minimum wage? Or will large retailers be increasingly vulnerable to union organizing efforts?

According to San Francisco-based Cheryl Orr, a partner and co-chair of the national labor and employment practice group at Drinker, Biddle & Reath, a vote on the passage of the Fair Minimum Wage Act of 2013 to raise the federal minimum wage is already expected soon after the Thanksgiving recess. And while the press surrounding earlier openings on holidays may influence legislators, the minimum wage is more a political battle.

"Also, many states and municipalities already have their own minimum wages that exceed the federal minimum wage," she says. "For example, in San Francisco, our minimum wage will rise to $10.74 an hour on January 1, 2014."

And, in SeaTac, Wash., a small city south of Seattle, voters just approved -- by 77 votes -- the highest municipal minimum wage in the nation, $15 an hour, more than twice the federal minimum, the New York Times reports.

Teresa Bult, a partner in the Nashville office of national labor and employment-law firm Constangy, Brooks & Smith, doesn't believe the backlash against the Thanksgiving Day retail openings necessarily will lead legislators or their constituents to press for a higher minimum wage. But, she says, it is true the underlying opposition to the Thanksgiving openings and to the current minimum wage is the same -- that both are unfair to employees and their families.

"While that 'unfairness' corollary may be enough to raise the minimum wage issue to the attention of the legislature," she says, "thus far no one has argued that one is related to the other."

As far as large retailers succumbing to union-organizing efforts, Orr says that while pay certainly factors into union organization drives, they are also influenced by worker disenfranchisement and general dissatisfaction.

"We generally find a high level of satisfaction in the employee base of those retailers we work with," she says. "We believe it stems from [these retailers'] general interest in their employees' well being, opportunities for feedback and yes, competitive pay and benefits packages."  

Bult explains that any time large companies get nationwide attention for implementing unpopular policies that affect employees, they are likely drawing the attention of unions. And, she adds, unions can use those unpopular policies to generate support for their organizing campaigns, saying, for example, that an employer is uncaring towards its employees - even going so far as to make them work on Thanksgiving Day to turn a profit. 

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"Whether those organizing campaigns are successful or not, however, is probably less about what happens on Thanksgiving Day and more about what happens the other 364 days of the year," she says. "If a company is working hard on employee relations throughout the year, and implements its Thanksgiving Day work schedule policy fairly and with employee input and communication, it may negatively affect its employees less than the media might think."

Bult says the HR takeaway from all the seasonal negative news is retail companies have to think long and hard about whether they are going to jump on the bandwagon and open on Thanksgiving Day.

"And companies [that] choose not to open on the holiday have to be careful about not being too indignant about not opening," she says. "It very well may be that the trend becomes popular and those same companies have to eat their words when they decide to open the next year [or a year later]."

But more importantly, she says, if retail stores are going to open on Thanksgiving Day, they have to think about the impact the decision is going to have on their employee relations. The companies that are going to be least at-risk for backlash from their employees -- either from a union organizing campaign or from just a general employee dissatisfaction perspective -- are going to be those who work hard to provide employee communication and satisfaction throughout the year.

"Know your employees and treat them with respect," Orr adds. "For every person outraged by early openings on the holidays, there is another looking to make extra holiday pay or standing in line to get in."

Orr says that balancing perceived business needs with those of customers and employees is a critical role for HR leaders.

"It's the job of the HR professional to understand and communicate these sometime competing demands in a way that is helpful to both the employer and the employee," she says.

Maryam Morse, national reward practice leader for Philadelphia-based Hay Group's retail practice, says retailers' reward strategy should be focused on ensuring employees are incentivized, motivated and engaged in many ways. Interestingly, she says, Hay Group's seasonal staffing survey for 2013 shows that retailers expect to pay higher wages and provide more rewards to seasonal employees this year, which suggests a focus on investing in talent.

"Retailers want to drive sales this quarter," she says. "It's highly competitive and everyone is getting in everyone one else's spaces in this segment. To compete, we see many retailers reacting by paying higher wages both to regular workers and seasonal part-time employees as well. Those cases often don't make it to the headlines."

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