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American Apparel – Are You Ready For A Union Now?

American Apparel – Are You Ready For A Union Now?

You may have heard that Dov Charney, controversial Founder and CEO of American Apparel, was recently terminated. Board members have stated that the decision to fire Charney grew from ongoing investigations and alleged misconduct. If you don’t already know, American Apparel is an American clothing manufacturer, clothing distributor, and retailer with stores located around the world employing more than 10,000 people. (For the purposes of this post we are referring to the employees that manufacture American Apparel’s apparel only.)

Around the same time Arthur T. Demoulas was also fired as CEO of Market Basket a New England based supermarket chain, which employs about 25,000 people and operates 70 stores in Massachusetts, New Hampshire, and Maine. What’s interesting about this story, and a point that we believe has been missed, is the response from the employees of both companies. On one hand, we have American Apparel, where, to our knowledge business has continued pretty much as usual. On the other hand, employees at Market Basket have walked off the job in protest after Demoulas’ firing and business has ground to a sobering halt. After all, employees don’t usually get emotional after a CEO is fired, or do they?

According to the Boston Herald:

“Many Market Basket employees, including warehouse workers and drivers walked off their jobs on July 18, in protest of the June firing of former CEO Arthur T. Demoulas. They have vowed to stay out of work unless Demoulas, (who has been replaced by two new co-CEOS), is reinstated.”Imagine that: Workers actually protesting and going on strike because their CEO Arthur T. Demoulas was fired. Even more interesting, is that there have been reports that Market Basket customers have stood in solidarity with Market Basket employees by refusing to buy their groceries from the chain. (Be sure to check out this clip that recently aired on PBS Bare shelves for Market Basket as employees and shoppers unite in profit-sharing fight which shows how this has evolved into a grassroots effort.)

MARKET BASKET UPDATE 8/27/2014: A deal was approved by the chain’s board essentially meets the sole demand of the workers who have been staging huge public rallies for six weeks: that Arthur T. Demoulas, who was president until June, be reinstated to lead the company. His cousin, Arthur S. Demoulas, and his allies agreed to sell their 50.5 percent stake in the company to Arthur T. Demoulas and his allies, who own 49.5 percent, according to the statement. Read more…

So it makes me wonder – why the workers at American Apparel don’t have the same passion for their ousted CEO Dov Charney, as the Market Basket employees have for Arthur T. Demoulas?
According to American Apparel’s website:

“Employees earn an average of $25,000/yr, or $12 an hour, almost twice the federal minimum – some employees actually make more. American Apparel also offers other benefits and perks such as parking, subsidized public transport, subsidized lunches, free on-site massages, a bike lending program, a program of paid days off, ESL classes, company-subsidized health insurance, and an on-site medical clinic to offer pediatric, urgent and preventive health care.”

The benefit package at American Apparel looks pretty good and we might add was implemented under Charney, which leads me to ask again: Why have the employees at American Apparel been pretty much silent after the firing of their CEO?

Benefit packages are one thing, treating people with respect and dignity is another.

According to reports, in 2003, the workers at American Apparel began organizing a union for various reasons, including benefits and alleged worker harassment. Apparently, to put a halt to the employees at American Apparel organizing, Charney and other members of the management team began spying on, interrogating, and forcing workers to attend anti-union rallies while banning organizers from the premises. It is also reported that management was spreading misinformation, threatened to lock workers out, and even going so far as to threaten to close the factory if the employees achieved a union.

For the record, The National Labor Relations Act of 1935, also known as the Wagner Act, guarantees the basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike (if necessary). In essence, employees have the right to organize with other employees to form a union without fear of retaliation from management. In fact, it is illegal for management to fire, favor, or intimidate employees who support or do not support the formation of a union.

With all that is going on within Market Basket, from the grassroots level of organization and solidarity within the ranks, Ethix Ventures and others have asked, “Should Market Basket Employees Unionize?” The moment seems ripe with the hope and possibility of not only unionizing the grocery store chain’s workforce, but also taking a real opportunity to make worker ownership a reality of unintended consequences (in the form of an ESOP).

Seize the Moment!

We hope that whatever the outcome will be, the employees of these two companies, as well as their overall legacy and success is weighed, considered, and implemented so that all involved can succeed and continue living and building the American dream. What do you think? We look forward to your thoughts below.

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