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Smithfield Counsel Targeted in Union Corporate Campaign

August 27, 2006
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In corporate campaigns, unions usually highlight some way in which employers are mistreating employees. It’s an effort to embarrass the employer, and sometimes it’s accomplished by causing a stir about a retailer using child labor or by alerting the media to how much an executive of a manufacturing company makes compared with the average employee.

But now it seems at least one group is digging a little deeper.

The CtW Investment Group—which is part of the Change to Win Coalition, an umbrella organization of unions that was formed last year—is accusing Smithfield Foods general counsel Richard Poulson of not being certified to practice law in the company’s home state of Virginia.

In a July 27 letter to John Schwieters, chair of Smithfield’s audit committee, CtW notes that "since July 1, 2004, Virginia law has required that anyone listed as general counsel for a Virginia corporation either be a member of the Virginia Bar or obtain a corporate counsel certificate."

Poulson, according to the letter, resigned from the bar in 2001 and does not have a corporate counsel certificate.

"Here is a senior executive within the corporation who is responsible for all of the internal controls and assuring that the company is complying with all of the regulations, and he himself is not in compliance," says Michael Garland, director of value strategies for New York City-based CtW Investment Group, which provides corporate governance assistance to Change to Win’s $180 billion pension fund.

Jerry Hostteter, a spokesman at Smithfield, says that "even though this is union-motivated, we are taking this matter very seriously. The chairman of the audit committee of the Smithfield Foods board of directors is looking into the matter, and when the facts are determined, he will respond to the letter at the appropriate time."

The United Food and Commercial Workers union, a member of Change to Win, has been trying to organize Smithfield’s workers for years and hopes to use this latest discovery in its efforts, says Gene Bruskin, head of the union’s Smithfield campaign.

The union is planning to have hundreds of people, both from the union and civil rights groups, demonstrate outside of Smithfield’s headquarters at its August 30 shareholders meeting.

"This company is coming at us with everything they have, and they have large public relations departments and big ad budgets," Bruskin says. "We applaud Change to Win for having done this."

Change to Win’s tactic shows how unions are taking new measures to embarrass employers, says Gary Chaison, professor of industrial relations at Clark University in Worcester, Massachusetts.

For public companies, this heightens the need to do constant background checks on their employees, says Michael Sullivan, a principal in the labor and employment group of Goldberg Kohn.

"In this day and age, no one is immune to this kind of background search," he says.

But Sullivan questions whether such discoveries are really going to help the unions’ attempts at organizing employees.

Garland says that the findings about Poulson are very much an employee issue because "when companies are in violation of the law, they put their shareholders and workers at risk." The CtW has not received a response from Smithfield. But a day after the group released the letter to the press, Poulson was described on the company’s Web site as executive vice president and senior advisor to the chairman, but no longer as general counsel.

Jessica Marquez

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