updated 2/9/2005 4:57:39 PM ET 2005-02-09T21:57:39

In the latest salvo in a long-running battle between Wal-Mart Stores Inc. and organized labor, the company said Wednesday it will close a Canadian store where about 200 workers are near winning the first-ever union contract from the world’s largest retailer.

Wal-Mart said it was shuttering the store in Jonquiere, Quebec, in response to unreasonable demands from union negotiators, that would make it impossible for the store to sustain its business. The United Food & Commercial Workers Canada last week asked Quebec labor officials to appoint a mediator, saying that negotiations had reached an impasse.

“We were hoping it wouldn’t come to this,” said Andrew Pelletier, a spokesman for Wal-Mart Canada. “Despite nine days of meetings over three months, we’ve been unable to reach an agreement with the union that in our view will allow the store to operate efficiently and profitably.”

Pelletier said the store will close in May. The retailer had first discussed closing the Jonquiere store last October, saying that the store was losing money.

Union leaders promised to fight the move by the retailer, and rejected Wal-Mart’s stated reasons for closing the store.

“Wal-Mart has fired these workers not because the store was losing money but because the workers exercised their right to join a union,” Michael J. Fraser, national director of UFCW Canada, said in a written statement. “Once again, Wal-Mart has decided it is above the law and that the only rules that count are their rules.”

Retailer's roots
Wal-Mart’s decision to close the store reflects the retailer’s deeply rooted aversion to unions, and its worries that organized labor had nearly established a beachhead, said Burt Flickinger III of Strategic Resource Group, a consulting firm specializing in retailing and consumer goods.

But the move could backfire for a company that has worked hard recently to counter a wave of bad publicity and portray itself as a generous employer, he said.

“They’re trying to snuff it out but it may be self-defeating,” Flickinger said. “The store closing may potentially catalyze the combination of the government (officials in Canada), organized labor and consumers working together against Wal-Mart.”

Some employees at the store said they believed it was closing because of their agreement to join the union and several cried as they left the store. They told Radio-Canada TV that managers made the announcement Wednesday morning and they had not been allowed to ask questions.

Claudia Tremblay, a cashier at the store, said many employees burst into tears when managers told them about the news Wednesday morning.

“Many people cried, including myself,” Tremblay, a cashier at the store, said in an interview. “I’m a mother of two children and I’m separated from my husband. It’s very difficult.”

Tremblay said she abstained from the unionization vote, adding she was upset that her noncommittal stance won’t save her job.

Large chess game
The store in Jonquiere, about 240 miles northeast of Montreal, became the first unionized Wal-Mart store in North America last September, after the bargaining unit was certified by provincial labor officials. Since then, workers at a second Quebec store have also been granted union status. Neither had reached a contract.

The union efforts at both stores are part of a larger chess game labor organizers are waging with Wal-Mart at stores across Canada. The campaign, financed by UFCW money from both Canada and the United States, is also geared to captured the attention of workers in Wal-Mart’s home country.

The closest a U.S. union has ever come to winning a battle with Bentonville, Ark.-based Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers — all members of the store’s meatpacking department — voted to join and be represented by the UFCW.

That effort failed when Wal-Mart eliminated the job of meatcutter companywide, and moved away from in-store meatcutting to stocking only pre-wrapped meat.

Recently, some workers in the tire department of a Wal-Mart store in Colorado have sought union representation, and the National Labor Relations Board has said it intends to schedule a vote.

Unreasonable demands
Wal-Mart spokesman Pelletier said the company was closing in Jonquiere because of unreasonable union demands over scheduling and staffing, and the UFCW’s refusal to detail its pay requirements.

The union’s demands would have forced the retailer to add 30 people to the existing payroll of 190, and guarantee many workers additional hours, he said.

“In our view, the union demands failed to appreciate the fragile conditions of the store,” he said.

But Flickinger, the retail consultant, said he found it very unlikely Wal-Mart could have been in danger of losing money at the Jonquiere store. The retailer has few competitors in Canada and has found a very receptive market in Quebec, appealing to a large population of shoppers with limited incomes, he said.

“It’s almost impossible for any Wal-Mart in any province of Canada not to produce a profit,” he said.

The retailer’s real worry is likely that the UFCW, which has failed badly in efforts to organize Wal-Mart workers in Las Vegas over the past few years, has finally found a way in, he said. Unionized stores in Quebec would offer an ideal beachhead for the union to move into neighboring provinces, and then into Wal-Mart stores in Wisconsin, New York and New Jersey, where unions retain strong bases, he said.

UFCW Canada said it intends to file unfair labor practice charges with Quebec’s provincial labor board over the store’s closing.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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