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A Dollar General store in Bethlehem, NC. Photo courtesy of iStock

Can Trust Busters Help Deter Union Busters?

As workers flex their power in strikes [[link removed]] and walkouts [[link removed]] across the country, more retail employees [[link removed]] are trying to organize corners of the large, low-wage, anti-union sector [[link removed]].

This includes a union drive in Barkhamsted, Connecticut, at a Dollar General store, a rapidly expanding [[link removed]] discount chain known for low wages [[link removed]] and harsh [[link removed]] working [[link removed]] conditions [[link removed]]. Dollar General has more than 157,000 employees [[link removed]], and in 2020 a store employee’s median annual income was $14,571 [[link removed]]. Meanwhile corporate profits increased 54% between 2019 and 2020 to $2.6 billion [[link removed]].

Shortly after Dollar General workers in Barkhamsted filed for a union election in late September [[link removed]], the corporation hired anti-union consultants for $2,700 per consultant per day [[link removed]] and sent corporate managers to patrol the store. After weeks of one-on-one meetings with workers, [[link removed]] anti-union presentations, alleged threats to close the store [[link removed]], and a specious termination [[link removed]] of a union-sympathetic employee, the union election looks likely to fail. Last Friday, two workers voted for unionizing, three voted against, and two ballots were contested. The National Labor Relations Board (NLRB) will make the final call.

In a statement sent via email, Dollar General said that “we disagree with the claim raised by our former Barkhamsted employee, as well as any allegation of retaliation or harassment” and that the company “believe[s] a union is not in our employees’ best interests.”

“It’s been the most aggressive anti-union campaign that I’ve seen,” says Jessica Petronella, director of organizing with UFCW Local 371. “They are worried about the bigger picture. They don’t want these workers at Barkhamsted to organize because … they don’t want workers in other stores to feel empowered.”

Petronella alleges that Dollar General violated several labor laws and plans to file unfair labor practice charges with the NLRB. But the agency’s weak fines generally do not deter illegal union busting by firms determined to block worker organizing. “It’s a cost of doing business,” says Nelson Lichtenstein, labor historian and professor emeritus at University of California, Santa Barbara.

Harsher penalties and stronger labor protections could change this business calculus, as could a new approach to competition policy. Labor advocates have long sought [[link removed]] to prevent firms from competing in a race to the bottom on labor costs. Antitrust enforcement could embody this principle by establishing that labor law violations are an unfair way for corporations to corner markets.

Antitrust laws bar [[link removed]] businesses from dominating industries through “unfair” or “anticompetitive” means. But there are few clear legal definitions of unfair or anticompetitive conduct. Congress gave the Federal Trade Commission (FTC) broad authority to define and prohibit so-called “unfair methods of competition,” but the agency has read this power narrowly [[link removed]] and used it sparingly in recent decades. This could change – the FTC formed a new working group [[link removed]] to explore fair competition rulemaking, and new chairwoman Lina Khan is committed to tapping unused authority [[link removed]].

Courts have held that businesses cannot acquire or maintain monopolies using fraud, deception, and other generally prohibited practices, according to research [[link removed]] by Open Markets legal director Sandeep Vaheesan. In the late 1970s, FTC Chairman Michael Pertschuk extended this interpretation and floated the idea [[link removed]] of prosecuting companies that violated employment, environmental, labor, and other laws. By breaking these generally applicable laws, Pertschuk argued that firms used “unfair methods of competition” to obtain advantages over honest rivals that complied with the law. What Pertschuk suggested was not farfetched but rooted in Supreme Court interpretations of the FTC’s authority. In a 1972 decision [[link removed]], the Supreme Court stated the FTC can act as “a court of equity” and “consider[] public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”

In the case of Dollar General, maintaining low labor costs is a central part of its competitive edge. But if Dollar General holds down wages and working conditions by breaking labor law [[link removed]] and illegally busting unions in order to drive out retail competitors, especially in small towns [[link removed]], that could be deemed an unfair method of competition. Antitrust scholars including Vaheesan [[link removed]] and University of Chicago law professor Eric Posner [[link removed]] have made arguments along these lines.

David Seligman, executive director of the nonprofit law firm Towards Justice, says some lawyers have recently tried using labor law violations as evidence of unfair competition. Most notably, private plaintiffs [[link removed]] and the state attorney general [[link removed]] in California argued corporations that illegally misclassify employees as independent contractors gain an unfair competitive advantage by evading minimum wage, overtime, workers compensation, and other labor standards (thus lowering their labor costs). Courts agreed this conduct [[link removed]] violated [[link removed]] California competition and labor laws, but in a private suit the court [[link removed]] did not find any violation of federal antitrust law.

Seligman says other antitrust practitioners could do more to expand this legal theory. “One key thing that public enforcers and academics ought to be doing is reinforcing the ways in which conduct fits together to amount to unfair competition,” says Seligman. “Unfair labor practice[s] can be part of a pattern of conduct that results in unfair competitive advantages.”

Lichtenstein also pointed to mechanisms beyond antitrust and traditional collective bargaining that can take squeezing labor out of competition, such as sectoral bargaining. Governments can establish standard-setting boards or councils [[link removed]] where worker and business representatives come together to set wage, benefits, safety, and other standards across entire industries. New York state raised fast food workers’ minimum wage [[link removed]] through this type of board, and Seattle created a multi-stakeholder board that sets labor standards for domestic workers [[link removed]]. Participatory standard-setting boards can be especially useful in sectors, such as retail, where corporations manage many outlets or independently owned franchises that are hard to unionize.

“I don’t see traditional collective bargaining as it was envisioned in the [National Labor Relations] Act [[link removed]] able to organize Dollar General,” Lichtenstein says. “They have ten thousand stores, it’s so easy for them to shut down the stores that get unionized.”

Even though it is illegal to shut down a store for unionizing, it happens. Only one Dollar General store has ever successfully unionized and three months after the union was finally certified [[link removed]], Dollar General closed the location citing [[link removed]] “future profitability” concerns.

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What We're Reading

Company data collected by the House Select Subcommittee on the Coronavirus Crisis reveals that COVID-19 cases and deaths among plant workers at top meatpacking companies were up to three times higher than previous estimates. More than 59,000 workers contracted COVID-19 at Tyson, JBS, Cargill, Smithfield, and National Beef plants and 269 died. ( Reuters [[link removed]])

Long Island vineyard workers formed New York state’s first-ever farmworkers union. A 2019 state law expanded the right to organize to farmworkers, who are otherwise excluded from many aspects of federal labor law. ( Documented [[link removed]])

A new coalition of trade groups — including the National Grocers Association, Organic Farmers Association, Protect Our Restaurants, and the National Association of Convenience Stores — urged the Federal Trade Commission on Thursday to better enforce the Robinson-Patman Act, a law that regulates concentrated buyer power. ( Press Release [[link removed]])

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Written by Claire Kelloway

Edited by Phil Longman, Sandeep Vaheesan, and LaRonda Peterson

Open Markets Institute

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