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