Company violated labour laws after shuttering when workers certified
After an almost decade-long battle, the union representing employees at a now-defunct Walmart in Jonquiere, Que., has emerged triumphant.
The superstore shuttered its doors back in 2005, just one year after workers certified (and thereby becoming the first unionized Walmart in North America) and after attempts to negotiate a collective agreement proved fruitless. As bargaining went to an arbitrator, the company announced it would be closing that same year, effectively putting almost 200 staff out of work.
The United Food and Commercial Workers union (UFCW) immediately sought recourse in the courts. While the company maintained the store was no longer profitable, the union argued it closed its doors because of the labour action.
In 2009, the Supreme Court ruled that Walmart did not violate the workers’ freedom of association rights — a decision the UFCW appealed in 2013. That time, the union argued Walmart failed to freeze working conditions for the period beginning with certification and ending when a collective agreement is ratified, which is a legal requirement. At the end of June, the Supreme Court decided Walmart failed to maintain employment conditions when it shut down, and failed to prove the Jonquiere location was no longer profitable.
The win was a long time coming, said Anouk Collet, UFCW’s regional director for Quebec. Going forward, she added, this will make employers think twice before applying any union-busting strategies.
"(The court is) sending a message to the employer that they can no longer close an establishment after a union tries to unionize them without giving any explanation. Before, employers were saying, ‘It’s our right to close an establishment.’ That’s no longer the case," Collet explained. "They’re going to have to justify their decision."
The celebration is a hasty one for the ex-Walmart employees, as the Supreme Court relayed any potential damages to be determined by an arbitrator. Collet said the UFCW is currently putting its case together and, while details are scant, she confirmed the union will be seeking compensation of sorts.
"Our lawyers are looking into this because this is something that’s never happened before. Before the courts had said we’re not entitled to anything. This is all new," she added.
Jonquiere may only be a mid-sized borough in Quebec, but the Supreme Court decision will resonate across the country, according to Howard Levitt, a prominent labour lawyer based in Toronto.
"They ruled — and I think the comments were broad enough to be applied across Canada, which is very important — that you don’t have the right, or the board doesn’t have the right, or the arbitrator doesn’t have the right to force businesses to stay open," Levitt said, adding that — perhaps surprisingly — both parties can share in the win, at least, until any potential damages are awarded.
"That’s a huge victory for employers because that’s the nightmare scenario — you close down to fight a union, and they say you have to stay open," he explained. "But that doesn’t let the company off the hook because you can get damages instead of reinstatement."
And therein lies the rub.
Though any damages to be awarded are still forthcoming, Levitt said a few outcomes could set landmark precedents and have major implications for unions. Where the arbitrator lies on the scale of compensation to be awarded will have the potential to tip the scales in either direction.
One possible outcome is that those workers would be made whole and awarded full compensation for time lost since the store shuttered its doors, and even until the employee is able to secure other employment. In that scenario, the potential losses for Walmart reach into the millions, and the company might have been better suited to keep its doors open, as it could have at least turned a profit.
Another possibility is that an arbitrator would award smaller compensation, say, pay for one year. Should that be the case, employers fearing unionization will be in a better position to justify closure, or will use the Walmart decision as a tactic to dissuade would-be certifiers.
"If the arbitrator gives employees pay for one year, then it’s open season for employers shutting down their businesses to avoid being unionized. If the arbitrator awards make-whole remedies, that would bankrupt most employers who try to shut down," Levitt said. "It will send shockwaves and it will be wildly empowering for the unions."
Off the beaten path
The Walmart decision was a long time coming — and as the beginning of the end nears, stakeholders in the labour world have reflected on why the gears shifted in favour of the UFCW.
Since the Jonquiere store closed in 2005, the union and company have been battling in the courtroom. Before ending up in front of a Supreme Court judge in this most recent ruling, courts sided with the company, concluding Walmart did not violate workers’ right to freedom of association.
So the union decided to change its tactic and instead of filing an unfair labour practice complaint, as might be expected, it grieved statutory freeze requirements. In doing so, the union secured its victory. The arbitrator decided, and was later backed up by the Supreme Court, that Walmart would not have shut down had workers not certified — a ruling which will embolden the labour movement.
"Walmart was getting away with it until the union sought to bring a claim to the statutory freeze. The union brought on numerous applications and lost every one of them. Those approaches weren’t working," Levitt explained. "They found the right one. It’s a new tool in the unions’ arsenal in this country."
A statement from Walmart Canada noted the company was disappointed with the decision, and is currently weighing its options for the next course of action.
