Nordstrom Leaders Defend Company Against Unfair Labor Charges
NEWPORT BEACH, Calif. (AP) _ Nordstrom Inc. leaders defended the upscale retailer Tuesday against charges that it forces employees to work without pay and said union pressure to change corporate policies would lead to mediocrity.
The fashionable department store chain, long noted for its sterling service, has been bogged down with labor grievances and a union class-action lawsuit filed on behalf of about 100,000 employees. The company’s shareholders also have sued, contending it should have revealed the extent of its labor problems and claiming they will be costly to resolve.
Nordstrom Co-Chairman Bruce Nordstrom told the company’s annual shareholders meeting that the accusations worried Nordstrom executives, but after carefully examining their labor practices, the officials concluded there was no reason to make anything more than make record-keeping changes.
″Not only does the system work, it also is fair and just,″ Nordstrom said.
But union leader Joe Peterson, clad in a tuxedo for the meeting, said the labor violations were systematic and could cost Nordstrom up to $300 million in back pay and damages. He said the union would fight for years if necessary to get employees the money.
″This dispute is not going to end,″ Peterson, head of the United Food & Commercial Workers Union Local 1001, told reporters just before the meeting. ″The company needs to sit down and find reasonable solutions to this problem.″
However, several Seattle-area Nordstrom employees, who paid their own way to the meeting, said they felt the union was stifling their chances at a career, adding that when they worked hours ″off the clock,″ they did so voluntarily.
″I’ll tell every shareholder, these people are very, very good to me and I’m proud to work for them,″ Joe Dover, a men’s shoe salesman at the Bellevue, Wash., Nordstrom, told the shareholders to huge applause.
″The majority of the workers are happy to work for Nordstrom,″ Dover told a reporter earlier. ″They are the best retailer in the Northwest. You can spend a career with them.″
Dover said the average wage for a salesperson at Nordstrom is about $2,000 a month, which he said is among the highest paid any department store workers in the country.
To earn that, he said, he works 36 hours to 50 hours a week ″and not all of it is on the clock because I choose not to do it on the clock.″
With $2.6 billion in annual sales, Seattle-based Nordstrom calls itself the nation’s largest independently owned fashion specialty chain. Its reputation for service was polished over decades and practiced at 60 stores in Washington, Oregon, California, Alaska, Virginia and Utah.
Nordstrom officials attribute the high level of service to the company’s incentive system.
″To inspire a will to succeed among its employees,″ the latest annual report says, ″the company adopted a commission pay structure that rewards the salespeople for their fine efforts.″
But in its class-action lawsuit, the union representing Washington Nordstrom workers says those policies translate into forcing employees to work unpaid hours stocking shelves, making deliveries, carting merchandise from one store to another and doing inventory work at home. The suit also claims employees routinely skipped lunch and coffee breaks.
The union has gathered about 600 complaints from California Nordstrom workers, and about 600 more protests from workers in other states. Most claims contend the employees worked four hours to 10 hours per week without pay, averaging about $4,000 per year in lost wages.
Bruce Nordstrom and his cousins James and John Nordstrom told reporters the company set aside $15 million last year to cover the cost of the labor dispute and they believe that is an adequate amount.
They said they expect many of the labor complaints to be settled soon, but added they also expect the union will file more to keep pressure on the company.
Nordstrom maintains that the union stirred up complaints about back pay after contract negotiations reached an impasse. The last contract expired July 31.
The company is now insisting that union membership no longer be mandatory in Washington, but the issue is hung up by the labor complaints and lawsuit.
How much the labor woes have affected consumer confidence in Nordstrom is in debate. The company said this month that its first-quarter profit was off 43 percent, at $13.2 million.
John and James Nordstrom, who run the company with their cousin Bruce, attributed the decline almost entirely to problems with inventory, the Northern California quake that devastated a major store and price cutting throughout the industry.