Labor Contestation at Walmart Brazil: Limits of Global Diffusion in Latin America (Governance, Development, and Social Inclusion in Latin America) 3030746712, 9783030746711

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Labor Contestation at Walmart Brazil Limits of Global Diffusion in Latin America Scott B. Martin João Paulo Cândia Veiga Katiuscia Moreno Galhera

Governance, Development, and Social Inclusion in Latin America

Series Editors Rebecka Villanueva Ulfgard, International Studies, Instituto Mora, Mexico City, Mexico César Villanueva Rivas, Department of International Studies, Universidad Iberoamericana, Mexico City, Mexico

This series seeks to go beyond a traditional focus on the virtues of intraregional and inter-regional trade agreements, liberal economic policies, and a narrow security agenda in Latin America. Instead, titles deal with a broad range of topics related to international cooperation, global and regional governance, sustainable development and environmental cooperation, internal displacement, and social inclusion in the context of the Post-2015 Development Agenda — as well as their repercussions for public policy across the region. Moreover, the series principally focuses on new international cooperation dynamics such as South-South and triangular cooperation, knowledge sharing as a current practice, and the role of the private sector in financing international cooperation and development in Latin America. The series also includes topics that fall outside the traditional scope of studying cooperation and development, in this case, (in)security and forced internal displacement, cultural cooperation, and Buen Vivir among indigenous peoples and farmers in Latin America. Finally, this series welcomes titles which explore the tensions and dialogue around how to manage the imbalance between state, markets, and society with a view to re-articulating cooperation and governance dynamics in the 21st century.

More information about this series at http://www.palgrave.com/gp/series/15135

Scott B. Martin · João Paulo Cândia Veiga · Katiuscia Moreno Galhera

Labor Contestation at Walmart Brazil Limits of Global Diffusion in Latin America

Scott B. Martin School of International and Public Affairs Columbia University New York, NY, USA

João Paulo Cândia Veiga Universidade de São Paulo São Paulo, Brazil

Graduate Program in International Affairs The New School New York, NY, USA Katiuscia Moreno Galhera Universidade Federal da Grande Dourados Dourados, Mato Grosso do Sul, Brazil

Governance, Development, and Social Inclusion in Latin America ISBN 978-3-030-74671-1 ISBN 978-3-030-74672-8 (eBook) https://doi.org/10.1007/978-3-030-74672-8 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: © John Rawsterne/patternhead.com This Palgrave Pivot imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To the next generation—Pedro, Maria, Mihiret, and Sofia

Series Editors’ Preface

Drawing on several years of research, this outstanding work by Scott B. Martin, João Paulo Cândia Veiga, and Katiuscia M. Galhera, Labor Contestation at Walmart Brazil: Limits of Global Diffusion in Latin America, is a must-read for anyone interested in grasping the historical context, development, and contemporary challenges surrounding the Walmart phenomenon in Latin America. With thoughtful argumentation, the authors lay bare Walmart’s “repressive familialism” and anti-unionism and examine how said practices fundamentally challenge labor standards and workers’ rights in Argentina, Brazil, Chile, and Mexico. Curiously, its founder, Sam Walton, got inspired by leading French competitor Carrefour’s hypermarket model in Brazil in the 1980s and decided to try it out in the United States; Walmart was born and later “brought back” to Brazil in 1995 but the saga ended in 2018 with the selling of some 80% of its Brazilian operations to the private equity firm Advent International Corp. Martin, Veiga, and Galhera’s detailed investigation thus centers on Walmart in Brazil, contrasting how its “repressive familialism” and antiunionism have played out in Argentina, Chile, and Mexico: countries faring differently under globalization, democratization, and economic restructuring predominantly under the neo-liberal paradigm. Particularly commendable is the authors’ fine analysis of nested agency within institutionalized settings drawing on gradual institutional change theory (GIC), an offshoot to historical institutionalism, in a comparative perspective. As the authors point out, GIC has been not been

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applied widely to institutional analysis situated in developing countries, but rather to examine public policies in the European/European Union context.1 Their research design is thus innovative as it combines comparative method with an institutional theoretical framework to frame institutionalized conflictual cooperation and its gains for workers who seek to resist a rather elusive and evasive corporate actor, a truly global employer existing under different brand names in certain countries. With careful precision, Martin, Veiga, and Galhera scrutinize government labor regulations and institutional specificities in the countries studied. In their own words: “We interpret the process of long-term, tumultuous, discontinuous gradual institutional change through institutional layering as creating a contradictory labor relations context laden with shifting threats and opportunities for unionists” (authors’ italics). GIC theory implies adopting a structural(ist) perspective in which specific events (in part) are historically determined and determined by the culture that has developed within a specific institution, for example. The interaction between formal institutions (overseeing regulations) and informal institutions that arise from human interaction and individuals’ interaction with the state is expressed in rules, norms, and habits. With a process tracing approach, Martin, Veiga, and Galhera examine how historical events and conditions led to the exit of Walmart from Brazil. The temporal dimension is central in their work; there is path dependence, sequences and simultaneity of different processes in institutional(ized) environments. Put differently, attention is paid to layered institutional arrangements through subsequent ideational changes and rearrangements, conducive to selfreinforcing processes within institutions.2 The result is an intriguing analysis, transparent and rich in depth and originality, which should leave a mark in the academic literature on Walmart’s corporate culture and preferred strategies for countering organized contestation by workers and unions.

1 See for example, Paul Pierson, “The Path to European Integration: A Historical Institutionalist Analysis”, Comparative Political Studies, Vol. 29, Issue 2 (1996), pp. 123–163. 2 See for example, Guy B. Peters and Jon Pierre, 2000, Governance, Politics and the State, New York, Basingstoke: Macmillan; Wolfgang Streeck and Kathleen Thelen (eds.), 2005, Beyond Continuity: Institutional Change in Advanced Political Economies, Oxford: Oxford University Press.

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Speaking with Hollingsworth and Boyer, “an institutional logic in each society leads institutions to coalesce into a complex social configuration [that] usually exhibits some degree of adaptability to new challenges, but continues to evolve within an existing style. But under new circumstances or unprecedented disturbances, these institutional configurations might be exposed to sharp historical limits as to what they may or may not do […].”3 Obviously, Walmart with its aggressive “repressive familialism” is challenging existing regulatory frameworks and undermining mobilization of workers’ resistance via unions and labor laws. However, as Martin, Veiga, and Galhera reveal, there is quite a lot of room for “creative agency within the institutional spaces and interstices of what are often contested, shifting national norms and laws.” Precisely, a fine quality with this study is that the authors seek to capture and problematize “dynamic relations with and actions by regulators and unions understood as lying at the intersection between—and at times in the interstices of—particular sets of national institutions.” A central claim is about “institutionally nested agency,” which the authors take to include “efforts by actors to actualize (or failure to actualize the potential of) institutional constellations containing rules and norms that can be used or repurposed to counter or engage Walmart.” This claim is essential because, to speak with the authors, “competitors, suppliers, unions, workers, and other actors react and maneuver in various ways within institutions in which they have roles and that shape their leverage and power resources.” Precisely, this occurs within institutions or institutionalized processes that are undergoing gradual change, growing “thicker” or “thinner” depending on how they respond to various endogenous and exogenous pressures. Throughout the chapters, the authors demonstrate that Walmart is more of a reluctant “taker” of institutionalized employment relations but prefers being the “maker” or “shaper” of said relations. Its corporate culture or “repressive familial workplace regime” consisting of “mandated group cheers, humiliating discipline, symbolic construction of a fictitious family among ‘associates’ lacking in hierarchy, with the rhetoric of an open-door policy of strictly individualized grievance discussions, and an ethic of smiling” is coupled with outright anti-union measures. Martin, 3 J. Rogers Hollingsworth and Robert Boyer, 1997, “Coordination of Economic Actors and Social Systems of Production” in J. Rogers Hollingworth and Robert Boyer (eds.), Contemporary Capitalism. The Embeddedness of Institutions, Cambridge: Cambridge University Press, p. 2.

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Veiga, and Galhera convincingly explain how this extreme form of socialization is aiming to “remake the subjectivities of workers.” For Walmart, ideally any issue should be dealt with by the individual worker directly, worked out through specific socialization rites. However, what Walmart along with other multinational giants is aspiring to is to get rid of any kind of intermediary mechanism between individuals and raw market forces to make the rational economic criteria the exclusive guidance for social interactions. The more unmediated and unregulated interactions with workers, the better. We reason with Streeck that “[g]overnance implies that society, through culture, politics, and policy, must retain the power to review the self-chosen objectives of rational economic actors under other than rational economic criteria.”4 Put differently, economic rationality cannot automatically produce a viable social order. Rather, an interplay between economic rationality and social forces is needed in society, mediated and regulated by institutions and institutionalized arrangements, serving as arenas or interfaces where resistance and (new forms of) contestation can be articulated. The question of whether Walmart’s exit from Brazil could be interpreted as a critical juncture5 or a formative moment6 for the interplay between institutional(ized) legal-political structures, organized workers, and corporate arrangements remains to be explored in future research. Likewise, it remains to be seen if Leviathan/Walmart will resist becoming a “Giant on its Heels” in Latin America because of the Brazil experience in which the “sticky” web of norms, standards, and regulations shaped over many years enmeshing Walmart eventually forced the company to pay the price for its overtly aggressive anti-worker and anti-rights practices.

4 Wolfgang Streeck, 1997, “Beneficial Constraints: On the Economic Limits of Rational Voluntarism” in J. Rogers Hollingworth and Robert Boyer (eds.), Contemporary Capitalism. The Embeddedness of Institutions, Cambridge: Cambridge University Press, p. 216, italics in original. 5 Often “intertwined with other processes of change”, claim Ruth Berins Collier and David Collier, 1991, “Framework: Critical Junctures and Historical Legacies”, in Ruth Berins Collier and David Collier, Shaping the Political Arena: Critical Junctures, the Labor Movement, and Regime Dynamics in Latin America, Princeton: Princeton University Press, p. 27. 6 Bo Rothstein, 1998, Just Institutions Matter: The Moral and Political Logic of the Universal Welfare State, Cambridge: Cambridge University Press.

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Finally, we hope that Martin, Veiga, and Galhera’s remarkable study will ring loud in various research communities and that it may pave the way for cross-national studies about strategies of contestation from the perspective of institutionally nested agency centering on conflictual cooperation between workers, unionists, and regulators, and global (multinational) corporations. Mexico City August 2020

Rebecka Villanueva Ulfgard César Villanueva Rivas

Preface and Acknowledgments

This book had a long genesis, with much circling of the prey and sizing it up before it came clearly into focus. In 2000, co-author Veiga was a researcher at the labor rights Non-Governmental-Organization (NGO) Instituto Observatório Social (IOS), linked with the Central Única dos Trabalhadores (CUT) labor center. The IOS conducts monitoring of international and Brazilian labor standards compliance by multinationals investing directly in Brazil, typically with project funding from partner trade union confederations from host countries of these global corporations. In 1999–2000, amidst the spreading concern that the US-based Walmart was “exporting” its model of abusive labor practices to overseas locations as it rapidly expanded abroad, the IOS conducted an “observation” at four stores across three cities where Walmart had opened units since its 1995 arrival in Brazil. While unionists cooperated, the company refused to provide information or be interviewed for the critical report IOS would issue in 2000—as is typical of the company’s adversarial relationship to academic observers or those associated with the labor movement. Co-author Veiga sat in on some of the interviews, though he was not a co-author of the report. Later, this report (which included recommendations about how labor standards compliance could be improved at Walmart Brazil) would provide us with an invaluable window into

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Walmart’s early years in Brazil, when unions faced an uphill battle against the new arrival.1 Co-authors Martin and Veiga, who initially met as graduate student researchers based at or affiliated with the Centro de Estudos da Cultura Contemporânea (CEDEC) research center in São Paulo in the early 1990s, collaborated on research based on IOS’s observation of social dialogue at the German chemical company BASF in Brazil. They presented an initial paper on that topic at a combined academic/activist conference in 2006 in New York City in 2006 organized by Cornell University called “Global Companies-Global Unions-Global Research-Global Campaigns.” Walmart’s threat to labor rights around the world—as buyer through its own global supply chain as well as direct employer—was the subject of panels and much discussion at that conference. This debate on the controversial company catalyzed our interest in exploring what seemed like a somewhat different new trajectory Walmart was now following in Brazil a decade or so into its sojourn there—seemingly less confrontational and more pragmatic toward unions. During follow-up fieldwork in 2008 in Brazil on the CUT and labor relations in the auto industry, Martin was able to sit in on a meeting of CUT unionists from its service and commercial workers confederation CONTRACS (Confederação Nacional dos Trabalhadores no Comércio e no Serviço) representing Walmart workers in São Paulo that Veiga helped arrange. This was his first direct exposure to the issues that exercised Walmart union representatives and the very different labor terrain of the supermarket sector. Several years passed, when in 2006–2007 Martin and Veiga (the latter now faculty at the Universidade de São Paulo, USP, and the former at Columbia and the New School) collaborated on two Latin American Studies Association (LASA) papers on Walmart in Brazil presented in San Juan and Montreal, respectively. At the former, Palgrave made initial contact with the authors, seeing the paper in the program, and asked whether the work was part of a book project. A first seed was planted for a broader project. Another was planted as Martin was asked in 2006 by a Columbia University Master’s graduate working for a Mexican NGO conducting research on labor rights abuses at Walmart Mexico to review the questionnaires to be administered to workers in store parking lots

1 Instituto Observatório Social, “Relatório Geral da Observação Wal-Mart Brasil Ltda.,” Florianópolis, Brazil, June 2000.

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in and around Mexico City, a country where he had also conducted research.2 Walmart began to come into broader comparative focus for us with the abusive employment of minors as unpaid grocery baggers working only for tips exposed in that report, which helped catalyzed reform. Fast forward to 2013, as the labor studies section of LASA circulated a call for proposals for book chapters on a prospective anthology on Walmart and labor rights in the global South organized by Carolina Bank Muñoz at City University of New York.3 A third seed was planted, as the project took on renewed meaning within an even larger comparative international context. Complex similarities and differences raised questions about the vagaries of the nation-by-nation “implantation” of the Walmart model and its encounters with national labor institutions and resistance from labor actors. At this juncture, a then doctoral candidate at the Universidade de Campinas (São Paulo state in Brazil), Katiuscia Galhera, became involved in the project. She was able to examine the internal archives of Confederação Nacional dos Trabalhadores no Comércio e Serviço (CONTRACS) as well as interview unionists in 2014 on our behalf. In the resulting threeway collaboration on a book chapter for the aforementioned volume,4 we would argue strongly that Walmart was constrained by national institutions in Brazil and that, against type, “conflictual cooperation” ruled the day in bilateral dealings with unions based on profit and results sharing negotiations. As we as a trio, all political scientists but also with strong sociological and labor studies leanings, delved further into Walmart’s trajectory following upon that chapter—now with a book contract with Palgrave in hand—a richer and more complex and dynamic portrait emerged that caused us to re-problematize some of our initial findings about Walmart

2 Proyecto de Derechos Económicos, Sociales y Culturales (ProDESC), Lo barato sale caro: violaciones a los derechos humanos laborales en Wal-mart México, Mexico City, 2008. 3 Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher, eds., Walmart in the Global South: Workplace Culture, Labor Politics, and Supply Chains, Austin: University of Texas Press, 2018. 4 K. M. Galhera, S. B. Martin, and J. P. C. Veiga, “Wal-Mart in Brazil: From Global Diffusion to National Institutional Embeddedness,” In Walmart in the Global South: Workplace Culture, Labor Politics and Supply Chains, edited by Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher, Austin: University of Texas Press, 2018, 29–63.

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Brazil. Our background in the study of multinationals5 (particularly in the manufacturing realm) and the tensions and variations involved in transferring or diffusing home-country practices versus adapting to local institutions and markets informed how we interrogated Walmart. Also guiding us was the newly emerging literature on gradual institutional change in comparative political economy. As collective bargaining in addition to everyday relations in stores viewed through the prism of collective and individual legal claims came into sharper view in studying Walmart Brazil, we became more cognizant than in our original published work of the tension, if not disjuncture, between national negotiations and store-level realities as well as the unevenness of national negotiating experiences. What is more, from 2015 onward, the end of Brazil’s boom as well as its impeachment crisis and subsequent rightward political lurch and adoption of a flexible labor reform posed heightened challenges to the micro- and meso-level labor relations institutions we had seen taking shape around Walmart during the boom years. The final development that our research-in-progress had to grapple with was a competitive crisis that proved terminal for Walmart Brazil. This turn of events would require us—already advanced in writing—to try to make sense of a development we would not have anticipated a few years prior. The authors were contacted and interviewed by international reporters who had learned of our research and who were exploring the reasons for store closures announced in early 2016—asking us why labor claims were so costly, and whether it was true the company might leave Brazil. This was an eye-opening and crucial encounter that impacted upon our research trajectory. Legal claims-making through labor prosecutors and individual complaints would become as important for our research scope as collective bargaining over wages or results-sharing negotiations. Thus it was not just “labor relations” and bargaining and conflict but rather “labor contestation”—involving the whole panoply or organizations and institutions in the public labor sphere in Brazil touching on Walmart—that our study would seek to bring into full view and make our object of study. Moreover, grappling with the drivers of Walmart’s 5 See, for instance, K. M. Galhera, S. B. Martin, and J .P. C. Veiga, “Transnational Corporations,” in The Routledge Handbook to the Political Economy and Governance of the Americas, edited by Olaf Kaltmeier, Anne Tittor, Daniel Hawkins, and Eleanora Rohland, London and New York, 2019, Ch. 23.

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departure from Brazil after 23 years led us full circle back to the original issues of relationships between multinationals and national institutions and the actors working within them who respond in distinctive ways, causing significant cross-national variations in patterns of labor contestation that beg for comparative research and explanation. All research paths, including our comparisons with Argentina, Chile, and Mexico, led us back to the distinctiveness of Walmart’s model of “repressive familialism” and anti-unionism. They also led us to the very different way they unfolded due to the national contingencies of actions by unions and labor regulators nested within distinctive national institutional trajectories. ∗ ∗ ∗ The authors incurred many individual and institutional debts along the way to this book. Collectively, we wish to acknowledge the helpful feedback that Carolina Bank Muñoz provided with our chapter in her coedited volume, Walmart in the Global South.6 Her research on Chile in that volume and in a separate book-length study7 proved very insightful for us, and participating in the volume helped lead us on the path toward developing a wider comparative view of Walmart in the Americas. For all three of us, Mark Anner has been an invaluable colleague and friend, frequent collaborator, and inspiration for a number of years, and we are grateful he has also provided an endorsement for this book. As Director of the Center for Global Worker Rights (CGWR) at Penn State University, Mark also hosted co-author Galhera as a visiting scholar. Veiga wishes to thank the Department of Political Science, of which he is currently chair, within the Faculdade de Filosofia, Letras e Ciências Humanas (FFLCH), at his home institution, USP. He also has benefitted from his home at USP’s Center for International Negotiations (CAENI) as researcher. Martin expresses his gratitude to the Studley Graduate Program of International Affairs at The New School and the School of International and Public Affairs at Columbia University, his teaching homes. The New School provided a semester of academic leave for work on the book manuscript. His formative understanding of Latin American politics and 6 Galhera, Martin, and Veiga, “Wal-Mart in Brazil,” 2018. 7 Carolina Bank Muñoz, Building Power from Below: Chilean Workers Take on Walmart,

Ithaca, NY: Cornell, 2017.

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political economy was shaped by Doug Chalmers, Bob Kaufman, and the late Al Stepan, and his exposure to comparative frameworks on the labor movement and labor relations sparked by Mark Kesselman. In addition to the CGWR at Penn State, co-author Galhera wishes to thank the Universidade Estadual de Londrina (where she held a post-doc), the Universidade Estadual de Campinas (where she completed her Ph.D.), the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (for funding support),8 and the institution where is she is currently visiting faculty, the Universidade Federal da Grande Dourados. In addition, Galhera wishes to thank Uma Rani, from the International Labour Office, for helping shape her understanding of labor and employment relations within a global supply chain perspective in Brazil as well as Maria Gabriela Guillén, Angela Araújo, Simone Wolff, and Olga Sammiguel-Valderrama for the intellectual exchanges on her research. The authors are grateful for research assistance provided by Arthur Welle and Melina Abreu, and to the unionists from CONTRACS for providing access to documents and interviews, particularly Alessandra and Lucilene (Tudi) Binsfield. We are also indebted to the IOS for opening labor vistas on Walmart Brazil. The researchers responsible for that report with their respective institutional affiliations (if from outside IOS) were: Clóvis Roberto Scherer; Márcia Miranda Soares (CEDEC); Júlio Cardoso (Escola Sul, Central Única dos Trabalhadores); Rosângela Augusta da Silva (CEDEC); Paola Capelim (consultant, UNITRABALHO); and João Carlos Nogueira (consultant, INSPIR). In addition, we are grateful to the labor research agency DIEESE,9 which not only collaborated with IOS on the initial Walmart report in 2000 but also provides so much of the public data as well as insightful analysis on the demographics and collective bargaining of the commercial sector and retail segment on which this book builds. At the two LASA conferences, colleagues Andrew Schrank (now of Brown University), Gregor Murray (Université de Montréal), and Chris Tilly (presently of University of California, Los Angeles) served as fellow panelists or discussants from whose feedback our work profited, and the latter was also a Guest Lecturer in Martin’s New School seminar. In particular, we have learned a great deal, and taken as an indispensable and

8 CAPES Foundation, Ministry of Education of Brazil, Brasília - DF 70.040-020, Brazil. 9 Departamento Intersindical de Estatística e Estudos Sôcio-Econômicos.

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inescapable interlocutor for discussing all things work and labor in the supermarket and Walmart world, the inestimable ouvre of Chris Tilly and his collaborators. At the ILERA Conference, commentary provided by Anil Verma (University of Toronto) on previous versions of our research helped us think about Walmart in comparative perspective. The trio also wishes to acknowledge the very helpful insights of the anonymous reviewer who gave feedback on the book précis and initial chapter drafts leading to our contract with Palgrave. We are also very grateful to Maria Lorena Cook, emeritus faculty at Cornell and also of the University of California, San Diego, for her generous endorsement. Last but by no means least, the authors wish to acknowledge kindly the generous and detailed feedback on our manuscript from series editors Rebecka and César, whose insightful editors’ preface appears separately. Their incisive comments as well as editorial prowess have made this a better book in both style and substance, and we sincerely thank them, and Palgrave, for including us in their series. New York City, USA São Paulo, Brazil Dourados, Brazil October 2020

Scott B. Martin João Paulo Cândia Veiga Katiuscia Moreno Galhera

Praise for Labor Contestation at Walmart Brazil

“Martin, Veiga and Galhera provide an eloquent and insightful analysis of how one of the world’s most powerful corporations attempted to impose its model of ‘repressive, anti-union familialism’ on the largest economy in Latin America, and how it was met with resistance from workers, unions and the state. Their ‘nested agency within institutions’ perspective provides powerful insights on regional variations. It is a must read for practitioners and scholars of employment relations and human resource management.” —Mark Anner, Professor, Labor and Employment Relations, and Director, Center for Global Workers’ Rights, Penn State University, and author of Solidarity Transformed: Labor Responses to Globalization and Crisis in Latin America (Cornell, 2011) “Why did Walmart fail in Brazil? Thoroughly researched and convincingly argued, this is the compelling story of how one of the world’s most powerful companies struggled to impose its model in Brazil, and of why national institutions and labor unions matter. It’s a cautionary tale of global expansion and corporate parochialism.” —Maria Lorena Cook, Professor Emeritus, ILR School, Cornell University, and author of The Politics of Labor Reform in Latin America: Between Flexibility and Rights (Penn State, 2007)

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Contents

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2 3 4 5

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Introduction: Labor Contestation at Walmart in Latin America as Test Case of Global Diffusion by Multinationals

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Mediations of Global Diffusion: Walmart Meets National Institutions and Nested Agents

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Testing Distant Waters: Walmart’s Early Years in Brazil, 1995–2002

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Expansion, Conflictual Cooperation, and Rising Legal Scrutiny: 2003–2014

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Divergent National Patterns of Labor Contestation Surrounding Walmart: Comparisons with Argentina, Chile, and Mexico

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Labor Contestation Amidst Restructuring, Flexible Labor Reforms, and Walmart’s Exit from Brazil, 2015–2018

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Conclusion: Failed Global Diffusion, Walmart’s Exit, and National Institutions

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Index

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List of Figures

Fig. 4.1 Fig. 4.2 Fig. 6.1

Expansion and distribution of stores by type at Walmart Brazil, 2003–2015 Walmart and chief competitors’ revenues, 2003–2014 Annual employee turnover in supermarkets

88 89 214

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List of Tables

Table 3.1 Table 3.2

Table 4.1 Table 4.2 Table 4.3

Table 4.4 Table 6.1 Table 6.2 Table 6.3

Walmart’s global operations and employment as of 2005 (with market exits through November 2018) Leading multinational supermarket retailers in 2006, ranked by share of international sales outside home market as share of total sales Selected gradual institutional changes in regulatory/legal sphere and impacts on key agents, 2003–2014 Negotiated wage increases by sector vis-à-vis official Consumer Price Index (IPC), 2003–2014 Selected main labor lawsuits with damages assessed against Walmart by Regional Labor Courts (TRTs) and Superior Labor Tribunal (TST), 2011–2014 Comparison of labor infractions issued by government inspectors: Walmart and main competitors Walmart Brazil to Grupo Big: contraction, restructuring, and new ownership Walmart: declining key performance indicators Major rulings against Walmart on collective labor lawsuits in Brazil, 2015–2018

46

47 95 111

120 128 211 212 236

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CHAPTER 1

Introduction: Labor Contestation at Walmart in Latin America as Test Case of Global Diffusion by Multinationals

Abstract This chapter introduces the encounter between an aggressive company with a distinctive corporate strategy with actors and national institutions overseas not habituated to the “Walmart way” or to the distinctive U.S. institutions within which it prospered. Main arguments anchored in gradual institutional change theory are presented, centered around an in-depth Brazil case study and a comparative examination of Argentina, Chile, and Mexico. The authors draw broader lessons in the book about (1) the competitive costs of the company’s unwillingness or failure to adapt key aspects of its “born in Bentonville” labor relations/human resource management model to distinctive national institutions and creative labor and regulatory actors operating within them and (2) the variable capacity for meaningful labor contestation of multinational corporations across different national institutional settings on the part of regulators and unions. Keywords Multinational corporation (MNC) · Global diffusion · Labor contestation · Labor relations · Human resource management (LR/HRM) · Gradual institutional change theory · Union power resources

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_1

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Introduction Since the turn of the century, perhaps no other multinational corporation (MNC) has been more at the center of political controversy and interdisciplinary scholarly debate about the social and labor impact of the spread of foreign direct investment and globalization than the U.S. supermarket giant Walmart. In no small way, this concern has to do not only just the sheer size of the company as the largest private employer in some countries and still one of the world’s largest by various measures. It also has to do with its zeal in attempting to remake logistics, pricing, supplier relations, and labor relations first at home and then abroad. The global South in general, and Brazil and Latin America in particular, have been at the forefront of that U.S. corporation’s global expansion beginning in the 1990s and on through the present. Yet this book shows that expansion has been rocky and uneven across space and time in terms of labor relations and treatment of workers within the region, contested in some instances by labor actors and labor regulatory and legal institutions, and enabled by enfeebled labor and regulatory actors within difficult institutional environments in others. In important ways, this mixed picture is a microcosm of the broader patterns of wide variation in labor contestation manifest around the company in Asia and Europe, as well. Walmart is known in U.S.-centric scholarly and activist circles as an aggressive company, initially privately held after its founding in 1962 and still very attentive to the vision of founder Sam Walton who died in 1992. Walmart is heavily influenced by its roots in small-town rural Arkansas and, more generally, by a right-to-work, anti-union regulatory framework and an unusual business culture. That culture combines continuing majority or near-majority ownership by Walton’s heirs together with cutting-edge information and logistics management. The company has been a lightning rod for political and academic criticism and controversy—as well as activist pressure—in the U.S. surrounding labor issues such as its resistance to unionization and reliance on low-cost labor subsidized by public social assistance, as well as in light of abusive practices around, for instance, gender equality, scheduling, and even during one period child labor. The Bentonville, Arkansas-based firm has also been criticized and examined for its downward impacts on small business competitors and suppliers whom it can strong-arm and for the company’s general purported association with a “race to the bottom” capitalist template of what it calls “everyday low prices” at the expense of other

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social concerns. As Walmart went global in its network of stores on the heels of globalizing its supply chain of goods, a body of critical scholarship began to emerge by the early 2000s that examined the extent to which the Walmart “model” was “exported” whole-cloth, replicated only in piecemeal fashion, or was instead altered strategically in response to distinct national institutions and challengers in the countries of expansion. Noteworthy competitive setbacks and market exits in some countries in Asia and Europe were studied in this context. This book engages in a critical dialogue with these studies of Walmart’s global expansion, which have continued to burgeon, and situates them within more general debates about the continuum between global diffusion and national adaptation in multinationals’ strategic approach to overseas expansion. Analysis is centered around the key case of Brazil— in 1995 it became one of the first and largest economies to which the U.S. giant spread, while by 2018 it gained the distinction of the national market where the company had stayed the longest before exiting by selling off a majority stake of its operations. Given that previous country exits occurred within a decade or less of entry and two multinational rivals with French capital remained in dominant market positions in that South American country even as Walmart left, the company’s debacle suggested something particularly problematic about the company’s experience there that begs sustained examination. The book combines, first, a detailed study of the unfolding of Walmart Brazil’s expansion, labor contestation involving unions and various state regulators and legal bodies, and its ultimate decline and exit with, second, a comparative examination of labor contestation in three other large countries in Latin America where it has operated since the 1990s (Mexico and Argentina) or late 2000s (Chile). The research in these pages thus affords both a longitudinal perspective of evolution over time in a major country (whether viewed by market size or the size of the company’s operations there) and a diachronic comparison and contrast across divergent national experiences of labor contestation in the face of what are—it is demonstrated—common, invariant pillars in corporate strategies and behavior in the labor relations and human resource management (LR/HRM) sphere. Intrinsically important for the fate of the up to 80,000 workers it employed at any given time, Walmart’s twenty-three-year sojourn in the world’s currently ninth-largest economy provides an excellent window on the larger issue in comparative and global political economy of the interplay of national institutions and contestation with a powerful global

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corporation’s practices and policies, in this case, driven by a diffusionist approach centered on following core home-country practices in all host countries.

The Argument in Brief The book advances arguments about both Walmart’s strategy as manifest in its expansion into Brazil as well as Argentina, Mexico, and Chile and the nationally institutionally embedded and variant character of contestation that has ensued. Walmart was guided, the book documents, by a consistent set of integrally interrelated principles centered on anti-unionism and a workplace authority regime we characterize as “repressive familialism.” The former entails resisting, limiting, and contesting the power of unions—in particular, regarding work rules and workplace governance— and individualizing (where not suppressing altogether) expression and treatment of grievances by workers. However much the firm must tolerate the fact that unions it cannot simply eliminate in most national systems do by law negotiate wages (in many countries on a multiemployer basis), Walmart’s anti-unionism as philosophy and practical doctrine means the company avoids institutionalized, sustained engagement with unions and in particular with workplace delegates or other workplace-level representatives of workers over the terms under which it hires, deploys, treats, and dismisses workers on an everyday basis. The deeper analytical upshot of what the firm itself calls “Walmart culture” or the “Walmart way” is a unique pattern for the supermarket sector of socialization and treatment of workers centered on a discourse and practices that construct the workforce as a happy family and smiling provider of customer service as well as a portrayal of the workplace as lacking in hierarchical divisions, in which group-based demands are illegitimate. It is a coercive, personally intrusive system of domination that seeks to gain workers’ passive or active consent and to punish deviations from accepted behavior. Key symbols and rituals originating in the company’s U.S. operations and found in all these and other national settings are the daily group chanting of the “Walmart cheer” and the “ten foot rule” of greeting with a smile all customers who enter an employee’s personal radius. Workers’ putative loyalty and consent to the Walmart “family’s” set of norms is manifest in the signing by all employees of a code of ethics. Public symbolic rewarding of compliant workers who abide by the rules, and punishments of those who transgress them, are of equal importance.

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To be clear, a problematically narrow U.S.-born emphasis by scholars and activists on the company being a lowest-wage employer or being unique in its levels of turnover or other aspects of flexible work and “precarious” labor in a market segment that is broadly characterized by low skills does not travel well internationally as a consistent characterization of the company’s market positioning and labor impacts as being unique or distinctive. Instead, it is repressive familialism and anti-unionism in a broader sense—not simply being a low-road employer—that are, in fact, the truly distinctive aspects of the Walmart LR/HRM model that have been disseminated in its Latin American stores, and the most disconcerting aspects for those concerned about labor standards and rights. Other multinationals, including some in the broader category of retail,1 are held to have a distinctive set of practices or norms (what some might label a “work culture” or broader “organizational culture”) that they seek to diffuse in worldwide operations rather than adapting significantly to national contexts. Yet what is unique at least in the supermarket space is the content of Walmart’s core practices and norms. Yet—in the book’s second major argument—Walmart’s putative unilateral imposition of the repressive Walmart workplace culture evoking family metaphors and guided by anti-unionism is far from seamless, often generating conflict and what the book terms broadly “labor contestation.” Operating within nation- and sometimes sector-specific institutions, which are in many instances undergoing gradual process of change, unions as purposive agents invoke, employ, or re-interpret rules and norms in response to Walmart worker grievances as well as the reach and limits of their particular power resources. State agencies tasked with enforcing labor laws or adjudicating individual or collective labor disputes also play a crucial, and also cross-nationally and temporally variant, role in shaping when, where, and if Walmart’s labor practices are contested in the regulatory and legal realm; sometimes union actors succeed in activating them to worker’s benefit and regulators, inspectors, and judges apply and interpret legal norms to identify and punish the company’s abuses. Specifically, the book shows how labor contestation surged from the mid-2000s through the onset of Brazil’s economic and political crisis in 2014. This surge was driven by institutionally nested agency benefitting from but also pushing forward nascent, incremental changes in national and nationalsectoral labor institutions. In a cross-national comparison, the authors find broadly similar patterns of significant labor contestation in Chile likewise drawing on modestly expanding institutional space for autonomous union

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as well as state-regulatory action. These patterns contrast with surprisingly more modest patterns of contestation in an ostensibly labor-friendly Argentina related to a more centralized and uniform retail unionism. The patterns found in Brazil and in Chile also diverge from weak, fragmented labor enforcement institutions leading to practically non-existent contestation in Mexico; this situation exhibited a close fit between the company’s LR/HRM model and the one-sided, employer-dominated system of labor regulation and of phantom union contracts (sindicatos de protección) that were constants for the company’s initial quarter century or so in that country. Finally, despite the waning of institutional strength in Brazil under weak, sluggish growth and flexible labor reforms from the mid-2010s, labor contestation continued in the company’s final years, albeit at more modest levels and, in the case of unions in particular, from a more defensive posture.

Research Strategy The co-authors’ investigation of labor contestation in Brazil synthesizes and triangulates information from a variety of primary and secondary sources: interviews with union officials, public company documents, public and internal union documents, international and Brazilian press reports, government statistics, and publicly available legal documents and records. An invaluable starting point was an initial action research monitoring project on Walmart conducted in 1999–2000 by a labor rights non-governmental-organization, which co-author Veiga helped oversee and led to a final report published in 2000. The bulk of the research was conducted over 2015–2019, with the helpful assistance of Arthur Welle in compiling employment data and Melina Abreu in gathering legal records. Outside of a single confidential managerial interview in 2007, the experience of the co-authors was quite akin to that of the vast majority of researchers working on Walmart in the United States and overseas—the company is hermetically sealed to outside scrutiny, in terms of interviews (even former managers are constrained by non-disclosure agreements) and access to internal documents. Faced with that constraint, company strategy must be interpreted on the basis of public statements and documents and media reports, particularly from the business press, annual reports, and earnings calls with investors. Comparative research on Argentina, Chile, and Mexico relies primarily upon public company

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data as well as secondary sources, including scholarly studies and local and international press accounts.

Structure of the Book Chapter 2 lays out the analytical framework, central causal arguments, and key concepts. The varying nature of contestation around Walmart’s labor relations and employment practices in Brazil and Latin America is situated within the theoretical framework of gradual institutional change theory (GIC) as well in relationship to scholarship on multinational corporation strategy, competitive strategy, and work in global retail, and specifically the “cottage industry” of comparative work on Walmart social and labor impacts itself. GIC theory sheds light on the shifting constraints and opportunities within which actors such as unions and regulatory and legal authorities understood as institutionally nested agents engage with and sometimes confront Walmart and other supermarket retailers. It is applied to explain shifting dynamics and levels of contestation over time around the company’s operation in Brazil as well as broad cross-national differences with and across the comparator countries of Mexico, Argentina, and Chile. The chapter argues that understanding and explaining labor contestation around Walmart involve disaggregating functional areas within competitive strategy and highlighting the distinctiveness of a workplace regime labeled repressive familialism with anti-unionism as a central component, both remaining relatively constant over time and space in LR/HRM strategy. The authors introduce concepts employed in the book like structural versus associational power from the comparative study of unionism and, from the literature on MNC strategy, the notions of diffusion and adaptation, as well as distinguish among analytical dimensions of flexibility of work. Chapters 3 and 4 describe and analyze labor contestation at Walmart over its first nineteen years. Covering Walmart’s initial years in Brazil from 1995 to 2002, Chapter 3 argues that the company transferred its antiunion model and repressive familial workplace regime, along with high levels of work flexibility, with only minor adaptation to an accommodating institutional environment; this environment was generally advantageous to the firm during a period of market reforms and flexibility and with still weak institutions of legal oversight and enforcement at the state level in Brazil’s young democracy. Some conflict and pushback from a progressive

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union in the first city where it opened stores were evident. Yet, generally speaking, the firm met little overt resistance—from unions or regulatory and legal institutions—to its violations of legal and contractual norms and efforts to weaken unions’ representational role. Chapter 4 analyzes the 2003–2014 period of rapid expansion of Walmart’s store network in Brazil amidst enlargement of the company’s global footprint. Episodic “conflictual cooperation” entailing occasional high-level negotiations and consultations over profit-sharing and some workplace issues was intermingled with considerable instances and periods of protest and collective action as well as often successful legal claimsmaking by unions and assessment of legal fines based on suits filed by labor prosecutors. Rising labor contestation is attributed to the institutionally nested agency by union and state-regulatory actors within the context of modest, piecemeal institutional changes in Brazil’s labor rules and norms. Some of these institutional changes were shaped by these actors themselves through their own creative interpretation and appropriation of ambiguous or evolving laws and regulations. Gains on wages and bilaterally negotiated profit sharing and legal actions garnering compensation, however, co-existed with continued difficulties in gaining traction on fundamentally reshaping Walmart’s workplace model. Nonetheless, the firm incurred growing costs from legal challenges and fines, whose importance to the firm’s profitability would only come into full view a few years later. Following a most-similar system comparative research design, Chapter 5 tests and refines the explanatory framework by examining broad trends in labor contestation in the other three large Latin American countries in which Walmart operated from the 1990s (Argentina and Mexico) and late 2000s (Chile). After documenting similar patterns of repressive familialism and anti-unionism in these other countries that echo those of Brazil and home-country operations, the chapter describes minimal labor contestation (Mexico), modest or limited contestation (Argentina), and significant contestation similar to the levels of Brazil post-2003 (Chile). The explanation for these divergent national patterns focuses on how labor and regulatory actors (labor prosecutors, inspectors, and judges) were empowered or enfeebled, and how they maneuvered in reacting to or confronting the company, within the shifting or static institutional environments—in particular, their national and nationalsectoral employment relations institutions as well as institutions of labor inspection and labor justice.

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In overviewing broad trends in labor responses to the company’s crisis, restructuring, and sell-off in Brazil (2015–2018), Chapter 6 emphasizes the still open-ended struggles over implementation and adjustment to the 2017 flexible labor code reforms in Brazil by unions and labor courts. The chapter also presents available evidence about the adaptations and resiliency of labor prosecutors and inspectors. In collective bargaining and union governance, labor organizations sought to re-interpret, circumvent, or “defang” flexible labor norms, with some degree of success. The legacy of labor contestation of Walmart in what proved to be its last decade or so in Brazil is found to be an enduring one for its former workforce, albeit with some important past material and institution-building gains proving to some degree ephemeral or at least subject to ongoing conflict. The concluding Chapter 7 analyzes Walmart’s competitive decline and exit from Brazil, within the context of the book’s focus on its fundamentally diffusionist approach to not only LR/HRM but also practices in areas like pricing and supplier relations—many of which were a poor fit with Brazilian markets and institutions. The broader backdrop of evidence about the reasons for the company’s exits or attempted exits from some other key national markets in Europe and Asia since the 2000s are noted as parallels underlining a broader pattern within which the company’s failed experience in Brazil fits. Returning to the broader arguments of the book regarding nationally embedded and specific patterns of labor contestation and the firm’s limited capacity or willingness to adapt antiunionism and repressive familialism to national institutional and relational environments (or jettison them), the chapter underlines the limitations of diffusionist multinational strategies. Also highlighted is the surprising availability of tools of contestation in some national contexts where labor and regulatory actors would seem, at first blush, hopelessly overmatched by the power and reach of global corporations as mighty as Walmart.

Note 1. The example of IKEA might be cited (Business Research, “IKEA,” 2019). Konzelman (2011) finds IKEA’s international business model is as rooted in Sweden’s distinctive capitalist institutions as Walmart is in those of the United States, and that both are instances of “export of [national] varieties of capitalism.”

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References Business Research Methodology. 2019. “IKEA Group Report.” November. https://research-methodology.net/ikea-group-report-4/. Accessed September 23, 2020. Konzelmann, Suzanne J. 2011. “The Export of National Varieties of Capitalism: The Cases of Wal-Mart and Ikea.” Cambridge Centre for Business Research. Working Paper No. 314. September 2011. https://papers.ssrn.com/sol3/pap ers.cfm?abstract_id=1930862. Accessed September 23, 2020.

CHAPTER 2

Mediations of Global Diffusion: Walmart Meets National Institutions and Nested Agents

Abstract The varying nature of contestation around Walmart’s labor relations and employment practices in Brazil and Latin America is situated within gradual institutional change (GIC) theory and studies on multinational corporation strategy, work in global retail, and Walmart’s social impact. As institutionally nested agents, actors such as unions and labor prosecutors, inspectors, and judges engage with and sometimes take action against Walmart within these shifting institutional trajectories. GIC theory is applied to explain different dynamics of contestation and conflict around the company’s operation over time in Brazil as well as between that country and the comparator cases of Mexico, Argentina, and Chile. Anti-unionism, repressive familialism as a workplace authority regime type, work flexibility, and structural and associational power of unions are discussed as key organizing concepts. Keywords Labor contestation · Gradual institutional change theory · Multinational corporations · Workplace authority regimes · Labor relations and human resource management (LR/HRM) · Work flexibility

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_2

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This book argues that contestation around Walmart’s labor relations and employment practices in Brazil and other Latin American countries must be situated at the confluence of its distinctive competitive strategy regarding labor relations and human resource management (LR/HRM), on one hand, with the conditioning and mediating impact of the particular, often dynamic national institutions and the actions by regulatory and labor agents nested within them, on the other. The approach to the company’s competitive strategy draws on bodies of literature about multinational corporation (MNC) strategy in the contemporary global economy; about the nexus of competitive strategy, work, and labor in “global retail” in particular; and about Walmart’s global expansion from the 1990s on in comparative international perspective, respectively. A key aspect of this point of intersection across these varied bodies of literature is (1) the challenge and vicissitudes of a distinctively U.S. and “norm-challenging” corporation facing objective realities as it pushes overseas into (2) national markets and national institutions that are not easily remade in its anti-union, repressive familial image. The consequent “clash” generated pushback or resistance on various fronts that the firm did not encounter at home given the tenor and anti-direction of U.S. labor relations institutions. Yet in dialogue with the broader literature about comparative national embeddedness and in particular the gradual institutional change literature in comparative political economy— also discussed below—the book’s framework transcends a narrow, overly dichotomous focus on blanket MNC “diffusion” of home country practices versus full-scale “adaptation” to host countries; this focus views corporate strategy in terms that are, it is argued, overly monolithic across different functional areas as well as essentializing.1 The book’s approach also transcends a broader tendency in comparative international Walmart studies to either document (and denounce) its rapacious impacts on workers, suppliers, communities, and national competitive dynamics—in which the “Walmart effect” (Lichtenstein 2006) or “Walmartization” (Christopher 2000; Brunn 2006) are key conceptual metaphors for impacts on communities, competitors, workers, and small business—or alternatively to generalize in sometimes overly facile ways about the strength and ubiquity of the “resistance” to the company and the serious national obstacles Walmart confronts. The study does find many instances of resistance and pushback, yet prefers the broader term “contestation” and argues that these instances reflect agency (by unions and regulators in particular). Such agency is best understood

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not in voluntaristic or even strictly strategic terms, but also more deeply as nested within and seeking to restructure particular sets of national and national-sectoral institutions within which struggles around Walmart need to be located for more useful interrogation. Moreover, national and national-sectoral institutions also can have enabling dimensions for firms like Walmart—channeling and incentivizing behavior in particular directions that may augment the firm’s power—that should not be overlooked. Walmart has sometimes succeeded in taking advantage of these enabling features. A prime example is the weak, fragmented nature of regulatory and enforcement entities in its early years in Brazil (Chapter 3), also found to be a general tendency in Argentina (Chapter 5), as well as the close fit between the company’s anti-union, repressive familial strategy and Mexico’s flexible, autocratic labor relations system across the company’s first quarter century or so in that country (Chapter 5). The study thus inhabits the broad and significant space between the diametrically opposed images of “Walmart as global Leviathan” and “Walmart as giant with feet of clay,” or Walmart as uniquely and monolithically driven by a seamless, all-powerful overall model versus Walmart as pragmatic and learning adapter. In that space, it is argued, Walmart seeks to exercise its power in reshaping the behavior of workers, suppliers, competitors, and regulators, and does so while ceding as little as possible regarding core elements of its model that are in its “corporate DNA”2 — in particular, a workplace regime built around norms of “family” and customer service and a hierarchy-blurring “open door” that systematically seeks to individualize and diffuse any collective conflicts. Its aim is to keep at bay any influence from what are portrayed as “outside” interlocutors such as state regulators or even organized business associations, and resist and undermine the normal functions of unions and other legal forms of workplace-level representation where they exist. The notion of “workplace regime” refers to the distintictive set of formal rules and informal norms and customs that structure authority relations between owners and managers, on one side, and workers, on the other in a given firm or individual work site. Characterized by the company itself as “Walmart culture” or “the Walmart way,” a particular and distinctive workplace authority regime (Burawoy 1985) is identified by the authors—found at the firm across all four countries and resonant with home-country practices and those identified elsewhere overseas in its operations by other authors. It is best captured by our notion of “repressive familialism,” with anti-unionism seen as a central, integral component.

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The “Walmart as global Leviathan” image, against which the book pushes back gently, suggests an implicit acceptance of a rather absolutist position—if viewed within the debate about global MNC strategy3 —that Walmart is monolithically “diffusionist” (or “ethnocentric,” a term used in that literature to characterize a strategy with unique and distinctive roots in its home country’s distinctive or even idiosyncratic features). To be sure, the firm or rather its national subsidiaries have, particularly outside the LR/HRM sphere and in areas of LR/HRM like wage bargaining and benefits (often shaped in host countries by multiemployer bargaining or national rules and regulations), shown some limited capacity for localization—that is, adaptation to national and local practices and institutions. Indeed, it could hardly be otherwise in an industry where Walmart is one among many—albeit the largest by worldwide sales volume—among a handful of global and numerous regional and national supermarket and retail competitors. These global firms practice a “market-seeking” form of foreign direct investment (FDI), rather than an “export platform” or an integration across countries in a supply or value chain as in, respectively, export processing zone factories or higher-value-added manufacturing operations, respectively. With market seeking, the (more often than not commercial or services) company must, by definition, cater to local tastes and shopping habits more than in the more widely studied manufacturing multinational corporations (MNCs) as well as some types of service MNCs performing, say, outsourcing (e.g., back-office operations that are “offshore,” call centers, or work on international crowdworking platforms performed in developing countries). Yet managerial acceptance that unions cannot simply be eliminated (in all four of the countries in this study, but also many other countries where struggles around Walmart have been studied) or that negotiating profit and results sharing might make sense (Chapter 4 on Brazil) is, the book argues, a relatively minor company concession to local “custom or practice.” It is by no means indicative of a deeper acceptance of the legitimacy of unions or workplacelevel collective worker representatives as interlocutors, particularly when it comes to how workers are hired, supervised, deployed, dismissed, and otherwise treated on the shop floor of stores. This observation is particularly true compared with the more consequential continuity across borders and over time of a posture and strategy of keeping unions distant from the workplace; this entails undermining workplace-level representatives like worker-elected health and safety committee members or shopfloor union delegates, and resisting in any way—legally permissible or in many

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cases extra-legal or illegal—the constraints they might pose for unilateral managerial control and cost containment in stores. The firm pursues this posture of anti-unionism across different and distinctive national labor institutions, a point that is developed further beyond the Brazil case study in Chapter 5—in short, labor institutions that differ substantially (and were evolving over time) in their degrees of centralization/decentralization, capacity for union avoidance, and degree of openness to autonomous collective bargaining and worker collective action. However, the book also underlines, the pursuit or intention of union substitution or avoidance at the workplace level4 and taken to another level through aggressive and sometimes illegal actions is one thing, and achieving success is another—whether success is measured by labor cost or conflict containment or broader competitive success. In Brazil, LR/HRM practices of repressive familialism and anti-unionism clearly proved costly to the bottom line in legal judgments and fines and contributed to the company’s losses and ultimate departure from the country, as documented in Chapters 4, 6, and 7. It is possible, without going to the opposite analytical extreme, to give due weight to the idea that agency by regulators enjoying some element of discretion in interpretation and implementation of legal norms and procedures (labor authorities typically ranging from ministries to inspectors to specialized labor prosecutors as well as labor-court judges) and by unionists acting in the legal sphere against the company can and has made material differences. That problematic extreme—redolent of a more voluntaristic position—would be to treat Walmart overseas as a “giant with feet of clay,” relentlessly encircled by myriad challengers from the legal/regulatory and/or civil society/labor movement spheres. Here the book is attentive to how these actors operate and maneuver within the constraints as well as opportunities of the institutions in which they must operate, seeking to find ways of contesting (collectively or individually, and by various means) the unilateral exercise of market power by the U.S. fir (where they are so inclined, as accommodating postures are also evident in certain times and places). In so doing, these agents in some cases end up re-interpreting the formal rules or appropriating for their own ends the norms underlying particular institutional forms, which were often created for other purposes in labor law reforms or through judicial interpretations or executive regulations. Walmart generally keeps a studied distance from formal discussions and debates about institutional continuity and reform within host countries. Yet its actions in either working

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within or effectively circumventing institutions are quite consequential. In both instances, however, analysis must be mindful of the decisions and strategies of differentially situated actors, such as competing political and ideological currents in the labor movement representing workers at Walmart, state agencies with competing or overlapping responsibilities for labor regulation, and the broader set of supermarket competitors. The book develops an approach that moves beyond a narrow focus on competitive strategy in isolation, or the static interface of competitive strategy and “hard,” durable national constraints in host countries, to problematize dynamic firm relations with and actions by regulators and unions understood as lying at the intersection between—and, at times, in the interstices of—particular sets of national institutions. With the sole exception of Mexico among the four countries studied, national environments were evolving to a lesser or greater degree in the period in question under broader conditions of globalization, democratization, and marketoriented economic restructuring. Yet this point begs the question of what constitutes the book’s guiding notion of institutions (a contested concept in the social sciences), a subject to which the chapter now turns.

National Institutional Embeddedness and Gradual Institutional Change The present book builds on the strong case made in the literature on globalization of retail that retail MNCs are particularly affected by local institutional context as “market seeking” foreign investors who want to sell to, and for many products such as perishable commodities at a minimum must also procure from, the local market. This institutional embeddedness imperative-cum-challenge also has a territorialspatial dimension emphasized by economic geographers within this literature (Coe and Wrigley 2009). Challenges of institutional “adaptation” (sometimes referred to as competitive “localization”) are particularly strong for Walmart with its orientation toward practices perfected at home that may be unusual or controversial on foreign soil. These range from the strong-armed wringing of concessions from suppliers, deployment of an information technology-driven logistics system, pricing practices based on an “everyday low prices” rather than a high-low discounting strategy, or forceful tactics employed against unions or efforts at unionization (Bank Muñoz et al. 2018; Brunn 2006; Cristopherson 2006). The firm at times has exhibited instead a tendency to try to subvert these institutions

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through practices of or attempts at “market destabilization” (Burt and Sparks 2006), trying to force other actors, and in particular competitors, to adapt to or emulate it. The book notes in Chapters 5 and 7, however, that there is quite uneven success in such destabilization across countries in Latin America, and it has been particularly weak in Brazil and strong in Mexico. An ostensible alternative, middle ground on the diffusion-adaptation continuum posited in this literature—really best seen as a more long-term scenario not inconsistent with short- to medium-term market destabilization (Durand 2007)—is what might be called “mutual transformation of corporation and host country” (in some cases resulting in “hybridization” between host and home-country practices). The book adds to that insightful perspective the causal notion of institutionally nested agency, which suggests not just static formal constraints but also efforts by actors to actualize (or failure to actualize the potential of) institutional constellations containing rules and norms that can be used or repurposed to counter or engage Walmart—or rules and norms under which narrow organizational interests of more conservative union cumbents can be furthered by “accommodating” the firm. Thus, competitors, suppliers, unions, workers, and other actors react and maneuver in various ways within institutions where they are situated and that shape their leverage and power resources. These are struggles not only with Walmart but also over the larger rules themselves and how they apply to the company and sector in question. In national contexts (such as that of Mexico discussed in Chapter 5) where there is a strong fit of Walmart’s model with the tenor of national and commerce-sector labor institutions and with national institutions of capitalism more generally, as well as with existing practices within the local supermarket sector, there are many fewer institutional constraints and countervailing agents who might challenge Walmart’s presence, practices, and rapid expansion. National institutions are often in flux, however, as is in evidence in Brazil throughout regarding its national labor relations institutions (Chapters 3, 4, and 6). In the latter country, Walmart finds an advantageous situation of little effective workplace contestation and decentralized collective bargaining favoring employers in the late 1990s to early 2000s (Chapter 3), even as practices and regulations in the business competitive sphere generate constraints in Brazil during the same time period. The relative uniformity or, instead, diversity of the larger institutional complexes—labor and business/competitive—that

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Walmart encounters at the national level can thus be understood as, first, subject to variation over time and across countries. Second, the uniformity or diversity of these institutional complexes has direct consequences for the degree of power the firm wields unilaterally to shape competitive and employment and labor realities. Put differently, Walmart is a (usually reluctant) “taker” of institutionalized market and/or employment relations practices in some situations and in other circumstances, instead, an (enthusiastic and proactive) “maker” or at least “shaper” of such practices, as suggested by the “market destabilization” concept-cummetaphor. In the business/competitive realm (e.g., supplier relations, price-setting, product mix, choice of store format, store siting decisions), a key if not exclusive dividing line shaping whether or not one or the other scenario prevails—the book finds in comparing across countries and echoing in some ways Durand and Wrigley’s (2009) comparative analysis of Walmart and Carrefour’s national performance across the globe, discussed below—is whether or not the firm rapidly acquires a dominant position in the national market; this position is consistent with the market destabilization view of Walmart strategy noted above. This contingency is often wrapped up, in turn, with the nature of pre-existing competition, including whether other major MNC supermarket retailers are already present (as was true with Carrefour in Brazil) and whether the firm can quickly acquire market expertise and scale-up through a tie-up or acquisition of a larger domestic player. This line of analysis is most germane in the book to the concluding Chapter 7, in which the company’s 2018 exit from Brazil is problematized and put into larger global and comparative context with the firm’s competitive arc elsewhere in the region and on other continents outside the Americas. The study makes two claims regarding the interplay of Walmart and distinct sets of national institutions. First, the “comparative national embeddedness” perspective outlined above, while useful, needs to be brought squarely to the global South and Latin America in particular as well as be considered in a less static light. Analysis cannot lose sight of institutionally nested agency by those actors who would constrain or engage an MNC like Walmart. This point is true even as such a perspective rightly emphasizes the structuring power of national institutions (including, in many instances, their enabling power for firms). How agents actualize the latent possibilities of new legal norms or seek to shift conflict to non-traditional venues is not something that can simply

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be read off a structural “map” of formal-legal institutions. Agency and contingency matter. The book’s second claim brings into play gradual institutional change theory (GIC), a particular variant of comparative-historical institutionalism, which has informed many recent studies of comparative political economy and economic sociology, mostly in the North but also to a lesser extent in the developing world (Mahoney and Thelen 2010a; Streeck and Thelen 2005), including in Brazil in the health policy sphere (Falleti 2010). The Latin American countries studied here are particularly well-suited to a perspective that emphasizes contestation—not just through law-making but also involving legal interpretation and application by agents of appropriate norms to particular instances—over the contours of existing formal-legal and/or informal and socialized sets of norms and practices (that is, institutions). Mahoney and Thelen (2010b) problematize compliance as less-than-automatic aspects of institutions and emphasize how they reflect and reshape material and power distribution: The need to enforce institutions carries its own dynamic of potential change, emanating not just from the politically contested nature of institutional rules but also, importantly, from a degree of openness in the interpretation and implementation of these rules. Even when institutions are formally codified, their guiding expectations often remain ambiguous and always are subject to interpretation, debate, and contestation….[S]truggles over the meaning, application, and enforcement of institutional rules are inextricably intertwined with the resource allocations they entail. (pp. 10–11)

Prime examples in our discussion of Brazil of contested institutions subject to conflicting interpretations and struggles over compliance are, first, the profit-sharing law. Its requirement in implementing regulations adopted in 2000 that unions or other worker representatives be involved in negotiations with employers at the workplace level (over criteria for determining amounts and eligibility of workers) became the fount for more encompassing and sometimes national firm-level negotiations. The latter negotiations also encompassed frequently consultation on other unrelated issues not contemplated by the law. They were pursued by unionists lacking other instruments or venues for leverage on workplace and employment issues weakly covered or excluded from a formal and narrow system of collective bargaining focused on wages, as discussed in Chapter 4.

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A second example of contested institutions (among many others in the book) is the way in which labor prosecutors creatively defined the legal category of “assédio moral ” (harassment, coercion, or intimidation are loose translations) in investigating and fining firms, in particular, Walmart (Chapters 4 and 6). There is nothing in the letter of the former law or the latter legal norm from ordinary (non-labor) law that would lead us to expect or predict the way in which this norm was creatively appropriated for different purposes in the labor realm. Of course, institutional ambiguity is to some extent a double-edged sword; the firm itself was also engaged in its own form of “creative” re-interpretation of legal norms, constantly trying (along with competitors) to evade labor code norms regarding the length of the workweek, payment of overtime wages, and other issues. A prime reason why the GIC perspective is particularly well-suited to studying change and continuity in firm-level labor relations across Brazil and our three Latin American comparator cases is that the repressive forms taken by their historic state-dominated systems of labor relations entered into flux in the latter twentieth century and on into the late 2010s in post-authoritarian political regime contexts. This flux occurred as a result of the uneasy, often contradictory mixture of political democratization—pushing for rights and social inclusion—and processes of economic change centered on market reform, global integration, and restructuring of patterns of work and employment—pushing for employer-dominated flexibility. In the felicitous formulation of Cook’s (2007) comparative study of labor relations and labor market reforms in eight countries in the region (including all four discussed in these pages), labor unions and workers found themselves navigating since the 1980s and 1990s “between flexibility and rights.” In all but Mexico with its constant arc of weak labor rights and high levels of flexibility favoring employers during this period (which has become altered in important recent and potentially ongoing ways as the book closes), the other three Latin American countries in question have witnessed in recent decades somewhat of a pendular motion of sometimes expanding, sometimes contracting associational and organizational space; within that pendular trajectory, new avenues for labor action have been experimented with even as traditional ones have often seemed to close or narrow. Rather than simply being contested at the national political level, institutions are also being re-shaped at the sectoral and company and workplace levels, to which the book pays particular attention in analyzing Walmart and the broader supermarket sector.

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In addition, the book makes use of the lens of distinctive, empirically variant modes of institutional change provided by the GIC literature (Mahoney and Thelen 2010a, 2010b; Streeck and Thelen 2005). Overall, for Brazil, the GIC category of “institutional layering ”5 is a particularly insightful way of capturing a deeper penchant in the country’s politics for old rules to overlap and exist in tension with new ones that do not entirely replace them in practice—a tendency depicted as early as the work of Schmitter (1971). In this instance, layering has characterized, say, the piecemeal evolution by which new (liberal-pluralist) legal norms— the new freedoms embodied in the 1988 constitution—overlay but did not abolish long-established (state-corporatist) norms dating back to the 1930s (Chapter 3)—or the subsequent complex co-existence between flexible reforms from the 1990s and new, mostly more worker-friendly regulations and legal interpretations in the mid to late 2000s and early 2010s (Chapter 4). The book discusses but leaves open whether the new labor code and outsourcing law of 2017 and regulations restricting access to labor courts for individual worker claimants constitute an abrupt, discontinuous institutional “displacement ”6 of one set of institutions with another (which is another of Mahoney and Thelen’s GIC categories) or instead an instance of a more gradual, partial, and contested form best understood as yet another example of layering (Chapter 6). In the short time frame and the limited municipal case studies presented in this study, the latter is more evident. However, in the medium to long term, different dynamics could emerge as firms seek to impose the new legal norms, particularly in areas like new forms of part-time and zero-hours (“intermittent”) work. Elsewhere, and as a third type in the GIC literature, the notion of institutional “conversion”7 —the transformation of an institution toward different ends than those for which it was created—helps capture analytically the proliferation of “protection contracts” in Mexico at Walmart and in the supermarket sector. These were anchored in state-dominated and nominally tripartite labor boards shorn of their historic class conciliation and conflict resolution role and narrowly harnessed for purposes of suppressing independent union organizing and collective action and fostering “flexibilization” of work practices in the post-1982 neoliberal national economic context. In our GIC-influenced view of institutions as dynamic and contested and subject to struggles over “enactment,” social and regulatory actors as “change agents” play a large role in terms of attempted or successful

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efforts to alter the “rules of the game” shaping their interactions with Walmart and its competitors. A basic distinction, again following Mahoney and Thelen (2010b), is among three categories of actors: (1) those who are committed to and play by such institutions (arguably Walmart’s established competitors in most markets); (2) those who play by them but have an equivocal or opportunistic attitude about their character and reform (typically the case of conservative unionists as well as Walmart itself); and (3) those who are committed to either their gradual or radical reform (the case of particular sets or groupings of unions or workplace activists in all four countries). The focus here is on institutions shaping collective bargaining, union and employer organizations, hours and conditions of work, and the operations of labor markets and practices of skill formation. Yet the perspective presented in these pages also reflects a conscious recognition of the institutional interfaces and in some cases complementarities between labor relations systems and the more common or predominant workplace regimes in a given sector and country, on the one hand, and basic types of national institutions noted by authors regarding national varieties or forms of capitalism (for instance, Hall and Soskice 2001; Bizberg 2019). In the latter cases, the focus is on institutions of corporate governance, interfirm relations and competition, and modes of economic governance such as state versus sector coordination versus markets. The book only goes as deep into the broader array of capitalist institutions analytically separable from labor and human resources as is necessary for the case and comparative analysis, though broader implications for Walmart’s quite variant “fit or clash” with national varieties of capitalism are suggested in the concluding chapter.

Global Retail Work: Structural Realities, National Institutional Dynamics, and Workplace Regimes National institutions shaping corporate governance, competition, labor markets, and employment relations are mostly products of earlier eras of greater industrialism (and in Latin America state ownership and dominance of the economy). Service-sector and in this case large retail firms have grown proportionately more important only more recently, in the wake of market reforms and globalization and post-industrialism, and

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in some ways have had larger institutions born in the peak of industrialization (or earlier) grafted onto them, in some cases uneasily. To the extent, there are sectoral specificities to these national institutions justifying the “national-sectoral” moniker (Carré and Tilly 2017a), they reflect, in large measure in the Latin American countries in question, the legacies of labor institutions created around smaller retailer establishments—including commercial worker unions themselves—predating modern formats such as big-box stores. If there is a dearth of large-scale, much less comparative studies of retail work and labor relations in Latin America including in the modern supermarket sector, there is a tension in the useful studies of global retail work focused mostly or exclusively on the global North that the book seeks to engage with creatively— namely, the seemingly contradictory ideas, or “meta-hypotheses,” that (1) precarious work is ubiquitous in big-box retail and similar activities across countries in terms of its low-wage, exploitative, often outsourced or part-time or temporary characteristics versus (2) the notion that national institutional contexts regarding labor relations and regulation of wages and employment—and in some cases, firms’ labor or product market strategies—still do matter for the quality of jobs. Two exemplary comparative works that explore this tension and identify meaningful sources of cross-national variation within a sector generally marked by “lousy jobs” are Grugulis and Bozkur (2011) and Carré and Tilly (2017a), the latter of whom use that term. In the former “meta-hypothesis,” the hyper-competitive structure of the industry, with heavy price-driven competition, along with its demographics of a workforce dominated by youth, people of color and immigrants, and women, over-determines characteristics of high turnover, low commitment to retail jobs as careers, low individual and social investment in skills, and sweated, precarious low-wage labor. These structural features also tend to inhibit collective action, making workers interchangeable for employers and (outside the more skilled logistics and warehouse segments) undermining any structural sources of union and worker power and making it difficult to build associational power; part of this reality stems from weak collective identities and frayed horizontal ties among workers in the presence of mostly vertical, asymmetric ties binding workers in subordinate, exploitative fashion to management.8 The present study builds on these insights, examining the shifting demographics of the supermarket workforce in Brazil. Yet an important finding that resonates with the work of Bank Muñoz (2017) on Walmart in Chile

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is that associational power can be constructed by internally democratic unions that mobilize rank and file even in the presence of restrictive laws on union organizing as well as structural tendencies toward atomization of workers—with workers through unions creating both participatory local structures as well as independent national company-level networks. Moreover, despite high levels of turnover and demographics in globalized supermarket retail that might seem to mitigate against claimsmaking, individual and collective demands expressed through legal actions, denunciations of abuses through unions to labor authorities, and various forms of mobilization and job actions are documented in these pages on a significant scale in Brazil and Chile, and found in a much more scattered way in Argentina and only in extremely isolated fashion in Mexico. All of this flies in the face of any notion of supermarket retail or Walmart worker passivity. At the same time, to understand the targets of many of these claims, as well as legal actions against the firm more generally by inspectors and especially labor prosecutors as well as court judgments in favor of workers filing complaints of legal violations, analysis must delve into an area of quotidian abuses in the workplace that is less examined in the Northern-dominated and -focused comparative literature on retail work. This quotidian world is, however, the subject of much continuing attention over more than a dozen years in studies of Walmart both in the United States and abroad—namely, the workplace regime, in this case, often captured by reference to the company’s self-proclaimed “Walmart culture,” or more precisely the interrelated set of norms of discipline, socialization, social and managerial control, surveillance, and worker-customer interface.9 The book recasts the company’s distinctive workplace regime as a “repressive familialism.” In combining in integral fashion elements of coercion with efforts to generate worker consent, the study argues, repressive familialism mixes the despotic “whip of the market” with an active effort to generate and reproduce worker consent to managerial control in the place of work. There is a constant in shopfloor authority relations that emerges in Brazil and across the other three countries, recounted across Chapters 3 through 5, that dovetails with accounts in the United States, Canada, Germany, and other countries where Walmart operates. It consists of a marked—and many observers conclude, insidious—combination of symbols, collective rituals, and patterns of surveillance and discipline that seek to accomplish the following: create a fictive family in the explicit image of the company’s founder Sam Walton (elevated to

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status of mythical leader); blur hierarchical boundaries between workers re-styled as “associates” (or “collaborators” in Chile and Argentina) and managers; ban a language of “workers” and even “employees” from stores, from interactions with and among workers, from company documents, and from other physical and discursive spaces; and instill a false hope that employee complaints can be resolved individually and fairly through an “open-door” policy and that a selfless dedication to “customer service” (however abusive or insolent the consumer may be) is the supreme goal and will ensure worker advancement. A brief composite portrait of Walmart’s repressive familialism, as practiced from Bentonville to São Paulo to Santiago to Buenos Aires to Mexico City, is in order. The company’s worldwide logo of a smiling face greets “associates” when they arrive at work, and at the beginning of their shift, they are obliged (under threat of discipline and social ostracism) to participate in collective cheers involving swaying, dancing, clapping, and shouting the company name (these rituals are videotaped in multiple countries and languages and can be viewed on YouTube). Upon being hired, they are required to read the company’s global Code of Ethics, which has been translated into all the respective national languages of its subsidiaries. The code covers standard issues related to conflict of interest and anti-corruption, among others, as well as laying out the need to address any complaints or ethical violations to superiors through the “open door” policy (Comunicaço de Portas Abertas in Portuguese). It also spells out the imperative of obeying national laws and upholding standards regarding issues of payment, hours of work, and workplace health and safety. Yet it is notably silent about unions and laws regarding collective bargaining (whether in a national or international context); besides there never being a mention of the terms “employee,” “worker,” “union,” or “representative” or any use of the term “rights” outside those claimed by the firm itself (including that of surveilling employee’s personal communication devices such as e-mail), the code contains nothing resembling grievance procedures or anonymous, thirdparty mechanisms by which to transmit complaints about treatment by fellow workers, customers, suppliers, and managers. All communication about such issues—“associates” are admonished—should instead be “direct,” to one of several layers of management, including in-house ethics offices at the national and global corporate levels. It is no accident that labor rights are never formally acknowledged for, as the book demonstrates, the company forcefully seeks in Brazil and elsewhere to undermine

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worker representatives (elected unionists, union and shopfloor delegates, worker-elected members of health and safety commissions mandated by the state, etcetera). This elaborate effort to undercut any collective representation occurs through multiple means, many of which have been found unlawful by labor courts or inspectors and generated legal punishments in countries such as Brazil and Chile. This anti-union, anti-collective representation posture, the book argues, is consistent with rather than a departure from the firms’ vaunted union resistance posture originating in home office operations—complete with managers’ “anti-union toolkit”—in the United States and Canada. At home and in the “near abroad,” anti-union resistance has even taken the extreme form of closing of stores, outsourcing of operations after unionization votes, and dismissal of striking workers in order to quell labor conflicts and any embryonic efforts to form unions. As Chapter 5 demonstrates, anti-unionism is an integral part of the company’s efforts to create a hierarchical, familial loyalty and to encourage workers to treat all conflicts and complaints as individual and address them on a personal basis with managers—the notion of collective representation and collective rights is utterly foreign to, and indeed is fundamentally threatening to, the workplace control the firm seeks to exercise through repressive familialism. (Explicit company reasoning here is noted, with citations from the company’s anti-union toolkit, in Chapter 5.) It is impossible to grasp fully either the content or the sharp edges of the subjective sense of intimidation and humiliation suffusing the individual and collective complaints, denunciations, and legal actions regarding working conditions and treatment of workers taken against the firm without considering the acute contradictions between the discourse of family unity and the surveillance, shaming, and mistreatment that many workers come to perceive and experience. The company “invades” its workers’ lives but casts itself as paternalistic benefactor. There may be any number of individual or collective “triggers” that ignite small or larger scale conflicts. In some instances what fuels disputes—as documented by Reich and Bearman (2018) in ethnographic interviews with Walmart workers in the U.S.—is the outrage and betrayal felt by workers who dutifully obeyed supervisors, bent over backward to please customers, perhaps denounced “disloyal” actions taken by co-workers, and otherwise seemed to “buy in” to Walmart culture—only to find themselves eventually on the receiving end of “punishment” for some perceived transgression of company rules

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and norms that caused them to rethink fundamentally their former loyalty and commitment (our quotation marks). The coercive underbelly of Walmart’s repressive familialism workplace regime is concealed from public view but clearly evident to workers. If found to transgress company norms by complaining or questioning orders, workers are often subject to verbal harassment in front of their coworkers and being put “on notice,” including through a formal three-step policy known euphemistically as the Política de Orientação para Melhoria (Policy to Guide Improvement), discussed in Chapter 6. Common among retailers to avoid employee theft, surveillance is taken to a new level in Walmart by hiring military officials to head their security departments in Argentina and Chile (Chapter 5), and by doing aggressive, illegal physical patdowns and intrusive bodily searches of male and female employees upon leaving their shifts in Brazil and searching their personal belongings (Chapters 4 and 6). It is no accident that the same firm that has been the subject of home-country legal findings of unsafe work by minors10 and unfair labor practices against labor activists fired for striking,11 and the largest class-action lawsuit in U.S. history (on gender discrimination12 ) is the subject in Brazil of tens of millions of dollars in legal judgments regarding worker intimidation and harassment (assédio moral ), health and safety violations, refusal to concede bathroom breaks, and other legal infractions (Chapters 4 and 6); nor is it an accident that the company ended “employment” of minors working merely for tips in Mexico only when the practice was denounced widely following a NGO report documenting the practice in Mexico. Or that it has regularly figured on annual lists of the employers most fined by the Chilean state for violating union rights since its entry into that country (Chapter 5), or stood out as the most sued among the largest three supermarket chains in Brazil even with the third-largest operations and market share in the mid-2010s (Chapter 6). In sum, the book argues, Walmart’s effort to impose and maintain a repressive familial workplace regime is marked by a fierce anti-union posture and actions—negotiating with labor organizations or accepting employer organization deals reached with them where it is forced to by national law while simultaneously seeking to undermine unions as organizations including through actions that violate national law and custom. These actions constitute part of a global pattern of practice, and what can reasonably be judged in the hermetically sealed firm to constitute corporate strategy. This observation is counterintuitive for those who might

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expect more flexibility from a profit-maximizing MNC, and in contrast to those who argue that they find in practice in the case of Walmart in particular a “surprisingly changeable” and pragmatic LR posture and that Walmart is “not the same all over the world” in this respect (Carré and Tilly 2017a, 172–193; Tilly 2006, 2007). Some students of MNC expansion might see this as rigidity, but a business strategy perspective has treated these features (shorn of their critical framing) as core, functional parts of a unique management model that served the company well, at least for decades at home and in initial expansion to proximate and/or culturally familiar countries. Whatever the case, contra the affirmation of these authors whose work is rightly influential in global retail studies and revelatory in many other ways that we highlight in this study, these particular features do make Walmart unique on the LR/HRM front among its global rivals (that is, major European competitors). A commitment to instilling a repressive familial workplace regime characterized by fierce anti-unionism makes Walmart at the least unusual among its national and world-regional competitors in their operations in South America and Mexico—even as it broadly shares “low-road” employment practices with these companies, as Carré and Tilly rightly emphasize is true more broadly of Walmart. In the former set of firms, there is a documented preference for more institutionalized forms of labor-management relations, as underlined by brief discussion of Carrefour in Brazil in Chapters 4, 6, and 7, and Durand and Wrigley’s (2009) global comparison of competitive strategy including LR/HRM practices across Carrefour and Walmart; moreover, in none of these supermarket competitors is there evidence of reliance on high-commitment-seeking forms of workplace authority and control along the lines of Walmart’s repressive familialism. The “whip of the market” and high turnover and regimented supervision are also present in these other firms, to be sure, and seen as necessary and sufficient to “discipline” workers but notably not such aggressive efforts both to suppress collective conflict resolution as well as to socialize and to remake the subjectivities of workers . In addition to and in the process of reshaping workers’ routines and practices, we argue, Walmart seeks to mold their minds and their loyalties and goes to elaborate lengths to undermine any forms of collective worker representation and intermediation and to resist legal judgments against its employment practices. Therein lies the considerable albeit bounded extent of what might be called the “Walmart difference” on LR/HRM issues. Therein also lies the reason why, to reverse Carré and

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Tilly’s (2017a) metaphor, intrinsically “bad retail jobs” really are “worse” in many respects at the U.S. firm in its Latin American operations—in ways not neatly captured by data on pay, turnover, and benefits. Paying attention only to contracts, wages, labor markets, and the sphere of “circulation”—however crucial—without also examining workplace authority relations and legal disputes centered in large measure thereon as well as on anti-union labor rights violations obscures Walmart’s circumscribed but real “uniqueness” within the larger universe of low-road, big-box supermarket employers. The empirical and analytical perspective of the book better captures than a more economistic perspective the axes of conflict and cooperation at Walmart in Brazil and elsewhere in Latin America, portraying them as disputes over both material and power issues inextricably linked to and inscribed within the company’s contested repressive familialism, with its strong and integral anti-union dimension. It is key to underline the contested dimension of this workplace regime, for the effort to construct active worker consent to arbitrary managerial domination is always fraught with tension and frequently meets overt resistance, particularly when disputes unmask its underlying repressive nature. As studies from Argentina (Abal Medina 2018) to the United States (Reich and Bearnman 2018) note, Walmart workers frequently appropriate in struggles with management the “unity” and “family” metaphor—the language of their oppressor. They do so in large part to highlight precisely the lack of dignity and respect that they experience and to call for company or external action to remedy such conditions and force the powerful company to live up to its inclusive discourse. Whatever striking cross-national commonalities in the workplace regime that the company seeks to enact under the slogan of the “Walmart way” and many of the issue demands of the resistance it generates— the book’s argument continues—the capacity for effective contestation is unequally distributed across countries. This unequal distribution is based on institutional constraints and opportunities and the capacity of workers and unions to maneuver within and take advantage of them as well as that of regulators to react to complaints or initiate investigations and legal actions—all instances of institutionally nested agency. The global retail work literature usefully highlights these “national-sectoral” differences across the global North (Carré and Tilly 2017a)—in particular, the U.S. system of low union density, ample employer tools to resist unionization, and unregulated labor markets and weakly regulated wage norms tilt the playing field toward aggressive anti-union employers such

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as Walmart (though unionized regional chains have continued to exhibit much better labor standards, even when suffering from low-road competition from Walmart or other non-union newer arrivals in recent decades). This argument dovetails with Durand and Wrigley’s (2009, 16) finding from comparative cross-national research on Walmart and Carrefour’s subsidiaries worldwide that Walmart’s “international subsidiaries appear to perform better…in markets in which there is weaker labour organization and union autonomy …., where there is weaker labour regulation enforcement…, where wage bargaining is towards the individual end of the collective-individual axis…, and where lifetime job tenure/security is highly unusual…” While their analysis is framed around competitive success (a subject addressed squarely only in Chapters 6 and 7) rather than this book’s central focus on contestation of labor practices, the present research shows significant cross-national institutional variations across the first three of their four dimensions. There is not a neat or uniform clustering of countries across these dimensions and they might be re-framed per GIC theory as differences in national-sectoral institutional trajectories (borrowing from Carré and Tilly 2017a) that are more friendly or adverse to labor action; yet even recast this way, the Durand-Wrigley comparative framework resonates broadly with this book’s findings about where Walmart encountered more labor contestation (Brazil and Chile), limited or modest contestation (Argentina), and only isolated and sporadic contestation (Mexico). In Brazil and the other three Latin American cases, institutions were mostly in flux, with some developments opening opportunities for creative agency by progressive and even some business unions in Chile and Brazil (mostly on issues of direct and indirect compensation) as well as for legal and regulatory scrutiny. These relative gains (threatened by the developments in Brazil analyzed in Chapter 6) can be attributed, the book contends, to creative agency within shifting national institutions that actors used to their advantage. Meanwhile, worker agency was paradoxically constrained by the concentration of bureaucratic resources in a national-sectoral union even amidst a larger upsurge of rank and file activism in Argentina at large, and in Mexico by a system of protection contracts between corruptive, conservative unions and Walmart and by an overall highly flexible national labor relations regime. In both of the latter two countries, legal and regulatory agencies were weak to non-existent as levers to scrutinize and punish Walmart for labor abuses.

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The study makes use of the widely used nomenclature and classificatory scheme of work flexibility (discussed in greater detail in subsequent chapters) in characterizing change and continuity over time in Brazil as well as broader comparisons that situate Walmart in Brazil and elsewhere in the region within global retail organization of work patterns. At least through the 2017 labor law reform that created more advantageous “atypical” contract forms, the research finds comparatively limited reliance on flexible forms of employment and contracts and pursuit of flexibility in Brazil: working hours (notably the “hours bank” system of flexible scheduling); external/numerical flexibility (ease of hire and fire); internal or horizontal flexibility (across tasks and departments and with teamwork approaches); and flexibility in remuneration (reflecting attendance bonuses, profits and results sharing arrangements that were sometimes negotiated and other times management-dominated, and collective bargaining under national wage policies). This use of full-time, benefits-earning workers squeezed in other ways—similar to what is found by Carré and Tilly (2017b) in Mexico in the late 1990s to early 2010s—contrasts with heavy reliance in the United States on mostly involuntary “short hours” part-time work (and subcontracting) and more generally in developed country supermarkets on a mix of part-time, temporary, and subcontracted workers, with an often strong dualism in pay, access to or level of benefits, and working conditions between full-timers and non-full-timers. Fragmentary data in Mexico, not broken down by sector and noted in Chapter 5, suggest that despite the 2012 labor law reform creating part-time, temporary, and pay-by-time-increment contracts such as pay by hour (rather than by workday), firms such as Walmart continue to rely mostly on a combination of full-time and traditional casual workers (eventuales ) and less so on these new contractual types; however, further research is necessary. Data on hiring by contractual type was not readily available in the secondary literature as regards Chile and Argentina.

Re-Casting Views on Walmart: Between Normalization and Exceptionalism The book takes issue with polarized, mirror images—of a monolithic, rapacious firm that seamlessly implements a “readymade in Bentonville” model across the world and of a pragmatic, adaptable firm that is constrained by national institutions and where workers, regulators, competitors, and other actors push back against it, sometimes with a

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degree of success. They are too stark and need to be rendered more polychromatic. On the competitive front, the firm has failed in quite a few markets (now including Brazil and perhaps soon to include Argentina) where there were evident rigidities in various aspects of its strategy, though it has succeeded in quite a few others (including Mexico and thus far in its more recent foray into Chile); along the way, it has sometimes demonstrated some limited capacity to adjust tactically certain aspects of its competitive model (pricing, format, supplier relations) while showing no proclivity to veer from the repressive familialism and anti-unionism of Walmart culture that are, we argue, core LR/HRM aspects of the larger competitive model it has sought to transfer overseas. Regarding firm strategy in LR/HRM, the book follows a disaggregated perspective that allows for variations in the degree of adaptation across different functional areas of management. At the same time, the company’s strong commitment to its everyday low prices and strong-arming supplier model remain hallmarks of its competitive strategy in overseas markets. These competitive features have proven to Walmart’s detriment where they are not a good fit with particular national institutions and markets. Regarding the resistance and contestation that is increasingly and usefully highlighted in studies of Walmart around the world (Bank Muñoz et al. 2018, to which the present authors contributed, and Chan 2011), the book argues it is important to consider not just strategic agency but also its institutional nestedness and how they vary across national sectors as well as evolve over time. In understanding the characteristic fault lines in Walmart’s workplace regime that attract criticism and conflict, analysis must look beyond the generic structural difficulties of a hypercompetitive, cutthroat industry with low-quality jobs to also consider some of the distinctive ways in which distributive and power and legal struggles play out in a firm that seeks to “play by its own rulebook” in managing its workforce and dealing with worker conflicts—seemingly wherever it travels. Sometimes, moreover, as underlined by the firm’s exit from Brazil after 23 years in 2018, such obstinance (along with more mundane mistakes and missteps) can affect not just the wellbeing of workers but the very profitability and sustainability of its national subsidiaries.

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Notes 1. Discussions and applications of these concepts can be found, for instance, in the essays in Cooke (2003); Kenney and Florida (1993); and the essays in Berger and Dore (1996). The literature is extensive. 2. We borrow the phrase and metaphor (“cloning the corporate DNA”) from Govindarajan and Gupta (1999) while altering its content which pays minor attention to labor issues. 3. A few illustrative works that are not specific to global retail include Cooke (2003) and Sparrow et al. (2017) on global human resource management and labor relations and Kenny and Florida (1993) and Kim (1995) on Japanese manufacturing systems in the U.S. 4. For a discussion of such strategies and of “non-union industrial relations systems” at some U.S. firms and sectors in the post-War economy, see Kochan et al. (1994, 47–80). 5. “Layering occurs when new rules are attached to existing ones, thereby changing the ways in which the original rules structure behavior” Mahoney and Thelen (2010b, 16–17). 6. “Displacement is present when existing rules are replaced by new ones. This kind of change may well be abrupt…Yet displacement can also be a slow-moving process. This may occur wen new institutions are introduced and directly compete with (rather than supplement) an older set of institutions” (Mahoney and Thelen 2010b, 16). 7. “Conversion occurs when rules remain formally the same but are interpreted and enacted in new ways” (Mahoney and Thelen 2010b, 17). 8. The distinction was first introduced by Wright (1997a, b), further developed by Silver (2003), and is utilized in the supermarket sector and to discuss Walmart unions in Chile by Bank Muñoz (2017) and Bank Muñoz et al. (2018) and collective action by Walmart workers in the U.S. by Reich and Bearman (2018). 9. Moreton (2006) presents a seminal analysis of “Walmart culture” and critique and account of its genesis, including its rural origins, the cult of reverence for founder Sam Walton perpetuated since his death in 2002, and the enduring “enthusiasm for a familial workplace.” Dunnet and Arnold (2006) also analyze Walmart culture. On the workplace regime including its cultural and socialization aspects in the U.S., see the essays in Lichtenstein (2006) (especially by the editor, David Karjanen, Thomas Jessen Adams, and Ellen Israel Cohen); Bianco (2006), especially Chapter Five; and Reich and Bearman (2018). For Walmart in Germany, see Christopherson (2006), and for China see the essays in Chan (2011) (particularly by David J. Davies, David J. Davies and Taylor Seeman, Scott E. Meyers and Anita Chan, and Eileen M. Otis). In Bank Muñoz et al. (2018), studies by Carolina Bank Muñoz on Chile; Abal Medina

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on Argentina; and Gabriela Victoria Alvarado on Mexico all delve into workplace culture at Walmart. 10. In 2005 the Department of Labor fined Walmart for having teenage workers engage in hazardous work, and entered into a compliance agreement. Eight-five minors employed across three states were found to be in jobs defined as hazardous for those under 18 years of age. United States Department of Labor, “Wal-Mart Agreees to Pay Fine for Violating Child Labor Laws,” February 14, 2005, https://www.dol.gov/newsroom/rel eases/esa/esa20050214. Accessed October 1, 2020. 11. In 2015 the Obama-era National Labor Relations Board made an initial finding that Walmart violated labor law in 14 states in dismissing workers who engaged in strikes Retuers, “U.S. Labor Board Alleges Wal-Mart Violated Labor Law in 14 States,” January 15, 2014, https://www. reuters.com/article/us-walmart-labor/u-s-labor-board-alleges-wal-martviolated-labor-law-in-14-states-idUSBREA0E1PY20140115. Accessed October 1, 2020. But in 2019 with a Trump-appointed majority the NLRB reversed that opinion on appeal, ruled that the protests in question were “intermittent strikes” not protected under the National Labor Relations Act. Reuters,”NLRB Says Walmart’s Firing of Workers Involved in Union-backed Strike Were Legal,” July 16, 2019, https://www. reuters.com/article/labor-walmart/nlrb-says-walmarts-firing-of-workersinvolved-in-union-backed-strike-were-legal-idUSL2N24R1QY. Accessed October 1, 2020. 12. Dukes v. Walmart begain in 2001 with seven women suing for discrimation in pay and promotions and grew to be certified as a class of 1.6 million women by 2009. In 2011 the Supreme Court granted Walmart’s appeal, with the five conservative justices finding that there was not demonstrably enough in common among the plaintiffs to justify being treated as a class. The enormous disparities in pay and promotions across the sexes was never in dispute. Supreme Courts of the United States, Wal-Mart Stores, Inc. v. Dukes et al., Certiorari to the United States Court of Appeals for the Ninth Circuit, No. 10–277. Argued March 29, 2011. Decided June 20, 2011, https://www.supremecourt.gov/opi nions/10pdf/10-277.pdf. Accessed October 1, 2020.

References Abal Medina, Paula. 2018. Ser Sólo un Número Más: Trabajadores Jovenes, Grandes Empresas y Activismos Sindicales en la Argentina Actual. Buenos Aires: Ed. Biblos Sociedad. Bank Muñoz, Carolina. 2017. Building Power from Below: Chilean Workers Take on Walmart. Ithaca, NY: Cornell University Press.

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Bank Muñoz, Carolina, Bridget Kenny, and Antonio Stecher, eds. 2017. Building Power from Below: Chilean Workers Take on Walmart. Ithaca, NY: Cornell. ———. 2018. Walmart in the Global South: Workplace Culture, Labor Politics, and Supply Chains. Austin, TX: University of Texas. Berger, Suzanne, and Ronald Dore, eds. 1996. National Diversity and Global Capitalism. Ithaca, NY: Cornell University Press. Bianco, Anthony. 2006. The Bully of Bentonville: How the High Cost of WalMart’s Everyday Low Prices is Hurting America. New York: Doubleday. Bizberg, Ilán. 2019. Diversity of Capitalisms in Latin America. London: Palgrave. Brunn, Stanley D., ed. 2006. Wal-Mart World: The World’s Biggest Corporation in the Global Economy. London and New York: Routledge. Burawoy, Michael. 1985. The Politics of Production: Factory Regimes Under Capitalism and Socialism. London: Verso. Burt, Steve, and Leigh Sparks. 2006. “Wal-Mart’s World.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 27–43. London and New York: Routledge. Carré, Françoise, and Chris Tilly. 2017a. Where Bad Jobs Are Better: Retail Jobs Across Companies and Countries. New York: Russell Sage. ———. 2017b. “More Unequal, More Informal But Also More Full-Time: Mexican and U.S. Retail Jobs.” In Where Bad Jobs Are Better: Retail Jobs Across Companies and Countries, edited by Françoise Carré and Chris Tilly. New York: Russell Sage. Online Supplement Chapter A-1. https://www.russel lsage.org/sites/default/files/Carre-Tilly-chapter-A1.pdf. Accessed March 20, 2019. Chan, Anita, ed. 2011. Walmart in China. Ithaca, NY: Cornell University Press. Christopher, M. 2000. “Rules as Resources: How Market Governance Regimes Influence Firm Networks.” In New Models in Industrial Geography, edited by T. Barnes and M. Gertler. New York and London: Routledge. Christopherson, Susan. 2006. “Challenges Facing Wal-Mart in the German Market.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 264–27. London and New York: Routledge. Coe, Neil M., and Neil Wrigley, eds. 2009. The Globalization of Retailing. Cheltenham and Northhampton: Edward Elgar, 2 volumes. Cook, Maria Lorena. 2007. The Politics of Labor Reform in Latin America: Between Flexibility and Rights. University Park: Penn State University Press. Cooke, William N., ed. 2003. Multinational Companies and Global Human Resource Strategies. Westport, CT and London: Quorum. Dunnett, A. Jane, and Stephen J. Arnold. 2006. “Falling Prices, Happy Faces: Organizational Culture at Wal-Mart.” In Wal-Mart World: The World’s Biggest

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Corporation in the Global Economy, edited by Stanley Brunn 79–90. New York, NY and London: Routledge. Durand, Cédric. “Externalities from Foreign Direct Investment in the Mexican Retailing Sector.” Cambridge Journal of Economics 31: 393–411. Durand, Cédric, and Neil Wrigley. 2009. “Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour.” Environment and Planning, 1534–55. https://doi.org/10.1068/a4137. Falleti, Tulia G. 2010. “Infiltrating the State: The Evolution of Health Care Reforms in Brazil, 1964–1988”. In Explaining Institutional Change: Ambiguity, Agency, and Power, edited by James Mahoney and Kathleen Thelen, 38–62. Cambridge and New York, NY: Cambridge University Press. Govindarajan, Vijay, and Anil K. Gupta. 1999. “Taking Walmart Global: Lessons from Retailing’s Giant.” Strategy + Business 17 (4th quarter): 14–25. Grugulis, Irena, and Ödül Bozkur, eds. 2011. Retail Work. London and New York, NY: Palgrave. Hall, Peter A., and David Soskice, eds. 2001. Varieties of Capitalism: Institutional Foundations of Comparative Advantage. New York, NY and Oxford: Oxford University Press. Kenney, Martin, and Richard Florida. 1993. Beyond Mass Production: The Japanese System and Its Transfer to the U.S. New York and Oxford: Oxford University Press. Kim, Choong Soon. 1995. Japanese Industry in the American South. London and New York: Routledge. Kochan, Thomas A., Harry C. Katz, and Robert B. McKersie. 1994. The Transformation of American Industrial Relations, 2nd ed. Ithaca, NY: Cornell/ILR Press. Lichtenstein, Nelson, ed. 2006. Walmart: The Face of 21st Century Capitalism. New York, NY: New Press. Mahoney, James, and Kathleen Thelen, eds. 2010a. Explaining Institutional Change: Ambiguity, Agency, and Power. New York, NY: Cambridge University Press. ———. 2010b. “A Theory of Gradual Institutional Change.” In Explaining Institutional Change: Ambiguity, Agency, and Power, edited by James Mahoney and Kathleen Thelen, 1–37. Cambridge and New York: Cambridge University Press. Moreton, Bethany. 2006. “It Came From Bentonville: The Agrarian Origins of Wal-Mart Culture.” In Walmart: The Face of 21st Century Capitalism, edited by Nelson Lichtenstein, 57–82. New York, NY: New Press. Reich, Adam, and Peter Bearman. 2018. Working for Respect: Community and Conflict at Walmart. New York, NY: Columbia University Press.

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Schmitter, Philippe. 1971. Interest Conflict and Political Change in Brazil. Stanford: Stanford University Press. Silver, Beverly. 2003. Forces of Labor: Workers’ Movements and Globalization Since 1870. Cambridge and New York: Cambridge University Press. Sparrow, Paul, Chris Brewster, and Chul Chung. 2017. Globalizing Human Resource Management, 2nd ed. London and New York: Routledge. Streeck, Wolfgang, and Kathleeen Thelen, eds. 2005. Beyond Continuity: Institutional Change in Advanced Political Economies. Oxford and New York: Oxford UniversityPress. Tilly, Chris. 2006. “Wal-Mart in Mexico: The Limits of Growth.” In Walmart: The Face of 21st Century Capitalism, edited by Nelson Lichtenstein, 189–209. New York: New Press. ———. 2007. “Walmart and Its Workers: Not the Same All Over the World.” Connecticut Law Review 39 (4): 1–19. ———. 2014. “Beyond ‘Contratos de Protección’: Strong and Weak Unionism in Mexican Retail Enterprises.” Latin American Research Review 49 (3): 176– 198. Wright, Erik O. 1997a. “Working-Class Power, Capitalist-Class Interests, and Class Compromise.” American Journal of Sociology 4: 957–1002. ———. 1997b. Class Counts: Comparative Studies in Class Analysis. Cambridge and New York: Cambridge University Press.

CHAPTER 3

Testing Distant Waters: Walmart’s Early Years in Brazil, 1995–2002

Abstract After facing considerable challenges in its initial years in adapting to Brazil’s national institutions and market, by around 2000 Walmart made more successful adaptations in supplier relations, logistics, and pricing strategy. In labor relations/human resource management, however, the company transferred its anti-union model and repressive familial workplace regime with only minor adaptation, taking advantage of the employer-friendly institutional environment in Brazil’s young democracy. Despite some pushback from a progressive union in the city of Osasco at its first stores, the firm met little overt labor resistance to its violations of legal and contractual norms and efforts to weaken unions on the part of mostly business-oriented labor tendencies. This outcome reflected the traditional low levels of associational and structural power in Brazil’s commercial workers’ unions. Keywords Walmart culture · Globalization of retail · Multinational corporations · Host countries · Anti-unionism · Structural labor power

Walmart entered Brazil as well as Argentina in 1995 as part of one of its first forays outside North America, and during a period in which it would also expand into Asia and Western Europe. This chapter reviews the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_3

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company’s initial eight years in Brazil (1995–2002) and presents evidence that the company encountered considerable challenges in trying to adapt successfully to the national economy and business culture, though less so with respect to the labor relations environment. Rather than specific to Brazil or Walmart, these were reflective of general challenges—as reviewed in Chapter 2—encountered by firms in the broader globalization of retail and what some have called a “supermarket revolution in the global South” within it, discussed below. The U.S. multinational was but one primary exemplar, though the distinctive nature of its competitive model presented it with greater challenges. Brazil’s institutions were in a state of flux in its new democracy and in the wake of its 1988 Constitution, in a way captured theoretically by the gradual institutional change (GIC) perspective presented in Chapter 2. The company did not prove particularly adept in responding initially, we contend, as efforts to transfer home-country and home-region pillars of its business model tended to prevail over any effort at adaptation. However, by the turn of the century, Walmart would begin to show signs of more agile adjustment, and it did benefit in general from a willingness to wait a few years before becoming profitable and begin making major moves to increase market share (though, crucially, this meant foregoing the “market destabilization” trajectory it had followed elsewhere, discussed in Chapter 2). Emphasizing the many setbacks the company received in several international locations, Burt and Sparks (2006, 33), perceptively have termed this second phase of global expansion by Walmart in general as “putting a toe in the water” or, more derisively, “haphazard flag planting.” With respect to labor relations and human resource management (LR/HMR), Walmart encountered less forceful resistance to its model of low-cost labor as the decentralized, pulverized structure of Brazil’s union and labor relations system and the overall flexible direction of the national labor relations formal-legal framework in this period gave it unexpected and important advantages, alongside weak union and collective institutions in commerce in general and retail in particular within this framework. Some friction, but mostly only localized conflict, was generated by its introduction of Walmart culture and a workplace regime of repressive familialism, which included a posture of isolating and weakening the unions—the existence of which, but not any influence on their part, the company formally had to countenance under Brazil’s labor institutions with their corporatist-legacy bias toward controlled representation.

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The structure of the chapter is as follows: First, Walmart’s entry into Brazil is situated within its broader global expansion in this period and the strategy and motivations guiding it. This entails taking stock of the broader context of global supermarket chains’ expansion including rival, mostly European, multinational corporation (MNC) competitors also making aggressive moves of expansion outside their home continent. Here we also consider the particularly strong character of the company’s local adaptation challenges. As Burt and Sparks (2006) and Cristopherson (2006) note, there was an evident mismatch between a business model born and bred in the rural United States (and then expanded to proximal markets with market-friendly business and labor relations contexts) and the exigencies and constraints of several distinctly “unAmerican” and “non-North American” national institutional and relational contexts that it was confronted with, in many developing as well as developed countries. Brazil was an example of this larger mis match, we argue in the first section, though it received scant attention in the initial literature on Walmart’s global expansion. Second, the chapter reviews some of the obstacles and pushback Walmart encountered in trying to transfer its strong-arm approach to supplier relations and the difficult-to-replicate automated logistics system as well as gain the regulatory forbearance necessary for its “everydaylow-prices” model to be implemented, all in a quite different national business context from the home country. Third, the remainder of the chapter discusses the somewhat less constraining environment that it faced in LR/HRM with retail workers and their unions.

Global Supermarket Expansion and Testing the Waters in Brazil Walmart began its global expansion into geographically proximate countries and territories with which the United States was linked through trade and cultural ties or, in the case of Puerto Rico, commonwealth status within the United States. In 1991, the company entered a joint venture with Mexico’s Cifra, building on that country’s entry into the General Agreement on Tariffs and Trade in 1986, the ongoing negotiations that would result in the North American Free Trade Agreement (NAFTA) eventually signed in 1994, and a history of U.S. retailers operating at various points in Mexico (for instance, Woolworth’s, Sears, J.C. Penny, Home Depot). That year its first international store, a Sam’s

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Club, opened in Mexico. In 1997, Walmart would take full ownership. After Mexico, the expansion encompassed first Puerto Rico from 1992, and then Canada, Argentina, Brazil, Indonesia, and China between the mid-1990s and the end of the century. With saturated, mature, and often increasingly competitive home-country and -region markets, and enticing prospects for tapping emerging “young” markets, MNC food retailers such as Carrefour (France), Ahold (Netherlands), Metro (Germany), Tesco (UK), 7-Eleven (Japan), and Costco (United States) expanded their operations overseas by moving into new countries on untapped continents. A large spurt in investment activity, including through mergers and acquisitions, began to take shape from the midto late 1990s and constituted major and for many firms, first-ever,— moves-outside their home-region markets of North America/NAFTA and Western Europe/European Union, respectively; this meant moving into each other’s home regions as well as Asia and Latin America (and to some extent and mostly later, Sub-Saharan Africa).1 The speed as well as “late” character of Walmart’s international expansion—as compared to globalization in other economic sectors—is well captured by the data collected on the world’s 100 largest nonfinancial transnational corporations (TNCs) by the United Nations Conference on Trade and Development (UNCTAD) as ranked by foreign assets. While no supermarket (or other) retailers were ranked among the largest TNCs in 1993, Walmart and Carrefour both entered the ranks of the global top 100 in 1998 for the first time. By 2003 they were joined by two others (Metro and Ahold) in the top 100 ranks, with Walmart ranked 42nd compared to Carrefour’s 38th as the then largest global chain (UNCTAD 2000, 77; 2007, 18, 51–53). However, when home-country and world sales revenue were added together, Walmart became the world’s largest corporation in 2002, surpassing ExxonMobil, though already by 1999 it already had become the world’s largest private employer, with 1,140,000 employees across all operations.2 Table 3.2 depicts the world’s leading retailers in 2006 ranked by international sales, the number of countries in which they operated as of that year, and their international sales growth over the 1999–2006 time frame, as well as portraying foreign employment and its share of worldwide company employment for the year 2004. While Walmart was the leader in sheer size as depicted in Table 3.2, among the 11 global supermarket retailers it ranked only tied for 5th in the number of countries of retail operations in 2006 and only 6th in terms of the rate of growth over 1999–2006. This situation reflected a

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combination of the sheer size of its home-country market as well as the relatively more timid and later nature of its global expansion. UNCTAD’s widely used “transnationality index,” which is an average of a company’s foreign assets to total assets, foreign employment to worldwide employment, and foreign sales to total sales, gives another gauge of the relative extent of the company’s global push in larger cross-firm context. As of 1999, among the four retailers ranked among the world’s largest transnational corporations (by foreign assets), it had the lowest transnationality index score of the four despite being by far the largest among retailers and the 15th largest corporation by foreign assets of any company in any sector in that year: thus, Walmart stood at 25.8 percent transnationality, compared to Carrefour with 34.7 percent, Royal Ahold with 52.7 percent, and Metro with 36.4 percent (UNCTAD 2000, 90–92). It is worth keeping in mind the company’s still overwhelming “Americanness” in sheer economic and organizational terms when considering how much home-country origins and practices colored its global expansion—much more than was true of its rivals. Less a “transnational” that transcended borders, Walmart was—as we will see below and in subsequent chapters—more of a “multinational,” as a U.S. company that operated in multiple countries. In the terms of Alexander and Meyers (2000) echoed by Fernie and Arnold (2002), rather than being “geocentric” in prioritizing international competitive environments Walmart was “ethnocentric” (in a different way than anthropologists use the term) in trying to transfer distinctive company competitive advantages that were honed in a host country with particular market characteristics different from those of international markets. Fernie and Arnold (2002, 95) cite the following passage from the head of the International Division, from 1997: “When we first enter new markets, our first priority is to learn more about the customers, introduce the Wal-Mart concepts and philosophies, and prove ourselves.”

Waves of Walmart Expansion Returning to the discussion of where Brazil fits into Walmart’s global expansion, the latter can be seen in three phases or waves, drawing on Burt and Sparks (2006) and Govindarajan and Gupta (1999). The first, from 1991 to 1994, is characterized by initial market entry into the adjacent markets of Mexico (1991), the U.S. commonwealth of Puerto Rico (1991), and Canada (1994). The first phase, as suggested above,

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is defined by entry into proximal markets with close trade and investment ties and countries or territories with regulatory affinity. Profitability, commercial success, and growth came quite quickly in these familiar proximal markets (Burt and Sparks 2006). In 1993, Walmart’s International Division was created to manage the ongoing expansion outside the home market, and of course these developments were in some ways paralleled and in some respects pre-figured by the global sourcing of the company’s products, particularly nonperishable goods. As Petrovic and Hamlton (2006, 128) report, it is estimated in the 1980s that “upwards of 40 percent” of the goods sold at Walmart stores in the United States were globally sourced, either directly or indirectly through the brand names whose merchandise is sold. In a second phase spanning roughly 1995–1996 that Burt and Sparks (2006, 34) have characterized as “flag-planting,” Walmart focused mostly on emerging markets further afield in Asia and Latin America, entering Brazil, Argentina, Indonesia, and China (initially Hong Kong prior to reunification and later the mainland). In such “young” or “immature” retail markets, economic reform, opening, and rising incomes were generating consumer demand that was deemed under- or unfulfilled, in part due to the weak or nonexistent history of sales in large retail formats selling a broad variety of merchandise, such as supermarkets and especially hypermarkets (Coe and Wrigley 2009b). Big-box and large-scale retailing were novel or at least relatively underdeveloped in such national markets, and Walmart’s arrival like that of its competitors was thus part of what some have called the “supermarket revolution in developing countries” (Reardon and Gulati 2009) or “globalization of retail in developing countries” (Coe and Wrigley 2009b). For their part, Korea and Japan appeared as attractive markets given the lesser established presence of Walmart’s perceived global European rivals (the likes of Carrefour, Ahold, Tesco, and Metro) combined with the fact that these Walmart rivals were in some cases beginning to make inroads into those same markets. In 1995 a Walmart executive noted “[t]here is a real need for discount retail stores in Latin America, and there is huge pent-up consumer demand in many countries.”3 A third more “mature market-oriented” phase of Walmart expansion, lasting from 1997 through 2005, included a successful move into the United Kingdom (1997), fraught moves into Germany (1998) and South Korea (1998) that would end in medium-term market exits (both in 2006), and entry into Japan as a full-joint venture partner with Seiyu

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(2002) after previously holding a minority stake, from which the company would later seek to disinvest the same year it sold its majority stake in Brazil—2018. The notion of “flag planting”—albeit of a “haphazard” nature in the authors’ terminology (Burt and Sparks 2006)—or “dipping a toe in the water” conveys a certain strategic vision of occupying spaces carefully and somewhat defensively and making initial inroads in many countries simultaneously, all with an eye toward learning more about these markets and establishing a beachhead for subsequent expansion. In turn, this somewhat equivocal approach helps us understand the relative rapidity with which it would wind down or withdraw from second- and third-wave investments in some countries—after two years in Indonesia, eight in South Korea, nine in Germany. Failures to adapt to local tastes, business cultures, and regulatory frameworks—or some combination thereof— have been cited by scholars and business reporters in these instances, and are discussed further in Chapter 7.4 The overwhelming mode of entry choice in the initial period of what might be termed “market reconnaissance” was to begin with either acquisitions of locally owned firms or joint ventures or licensing arrangements with such firms (instead of greenfield or new stores). As was true in Brazil, these partnerships often quickly morphed into fully owned operations where commercial success as well as scale made this a commercially desirable move. Table 3.1 conveys where Walmart stood globally as of 2005 in terms of countries of operation and numbers of stores and employees (from its first three phases of expansion), including the years of country exit (where applicable) through November 2018. Gradual expansion in mature markets from a small initial base, in terms of acquisitions or tie-ups with existing firms, proved problematic to the company’s scale-driven (and arguably market-share-driven) competitive model.5 However, it was less problematic (at least in the short to medium term) in some so-called emerging markets, such as Brazil and China. Implementation of the everyday low prices model relying on sales of a wide variety of dry goods and food products at stable, low prices (instead of periodic heavy discounting of certain goods to draw consumers in) ran up against several obstacles particularly in mature markets—namely, less ability to extract price concessions from suppliers, difficulties in implementing the parent’s vaunted nimble, IT-driven logistics system, and challenges figuring out the proper store design, locations, and product mix to fit local tastes.

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Table 3.1 Walmart’s global operations and employment as of 2005 (with market exits through November 2018) Country

Date of Entry

Number of Stores

Number of Employees

Mode of Entry/Acquisition

Year of Exit (where applicable)

United States Mexico Canada Puerto Rico Argentina Brazil Indonesia

1962 1991 1994 1992 1995 1995 1996

3,772 708 261 54 12 142 N/A

1,260,000 112 60 N.D 4 28 N/A

N/A N/A N/A N/A N/A 2018* 1998

China

1996

48

20

Germany South Korea United Kingdom Japan

1997 1998 1999

88 16 293

11 3.6 150

N/A Acquisition Acquisition Greenfield Greenfield Joint Venture Licensing agreement Joint venture Acquisition Acquisition Acquisition

2002

405

35

Acquisition

N/A**

N/A 2006 2006 N/A**

* Sale of 80 percent controlling stake to Advent, discussed in Chapters 6–7 **Attempted sale in 2018 Sources Walmart (2005) Annual Report (2005), and Burt and Sparks (2006). Figures on stores and employees include not just branded stores but also those operated under and employed under other brands with majority or exclusive Walmart ownership and control. Dates of entry correspond to assuming operational control of stores, whether fully owned, with a majority stake, or through a 50/50 joint venture with operational responsibility. Exits defined here as sales of majority control

Centralization of control in global corporate headquarters in Bentonville, and heavy reliance on expatriate U.S. managers sent overseas from the home office, was broadly characteristic of Walmart International during much of this period (Cristopherson 2006); however, da Rocha and Dib (2002) report considerable poaching of managerial talent from rival firms when Walmart came to Brazil. Citing a number of industry analysts, the trade publication Supermarket News noted in 2000 that “[w]hile WalMart continues to centralize all its management functions at its headquarters in Bentonville, Ark., Carrefour is more decentralized and flexible” (Supermarket News 2000). Business strategy scholars Colla and Dupuis (2002) also underline Carrefour’s advantages as having a “decentralized culture” and expertise in the “international management

Nether-lands

Belgium

Germany

France

France

Germany

Germany

Ahold

Delhaize

Metro

Carrefour

Auchan

Aldi

Lidl & Schwarz Seven & I

Japan

Country of Origin

Name of Company

24.2bn (5th) 23.5bn (6th) 23.1bn (7th) $14.1bn (11th)

54.8bn (3rd)

77.1bn (3rd) 19.9bn (9th) 45.1bn (4th)

34%

46%

47%

50%

52%

56%

77%

82%

International Sales International as in 2006 and Rank Share of Total (US$) Sales in 2006

4%

26%

14%

31%

14%

4

26

14

11

20

30

8

−6% 16%

20

6%

Rate of Change Number of in International Countries of Sales (1999–2006) Operation-2006

N.A

N.A

N.A

(continued)

105.23 (48.3%) 142.13 (33.0%) N.A

N.A

N.A

Foreign EmployMent in Thousands (Share of World-Wide Employ-ment-2004)

Table 3.2 Leading multinational supermarket retailers in 2006, ranked by share of international sales outside home market as share of total sales

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47

Country of Origin

Germany

U.S.A

U.S.A

Name of Company

Rewe

Walmart

Costco

$17.4bn (10th) 77.1bn (1st) 11.8bn (12th) 12%

22%

32%

International Sales International as in 2006 and Rank Share of Total (US$) Sales in 2006

2%

8%

12%

8

14

14

Rate of Change Number of in International Countries of Sales (1999–2006) Operation-2006

410 (24.0%) N.A

N.A

Foreign EmployMent in Thousands (Share of World-Wide Employ-ment-2004)

* N.A. Data not available from source or readily broken down on this basis in company’s annual reports Sources Data compiled by Coe and Wrigley (2009, xviii) with exclusion of non-supermarket retailers (that is, those selling mainly or exclusively luxury goods, furniture, or home furnishing and repair items) and subsequent recalculation of rankings, and with additional data on employment from UNCTAD (2007, 43–45).

(continued)

Table 3.2

48 S. B. MARTIN ET AL.

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of human resources and experience in the management of multicultural teams… [where] the greater know-how developed by Carrefour [as compared to Walmart] has become a significant competitive weapon in the global struggle between the world’s two leading supermarket companies” (Colla and Dupuis 2002, 107). A 2006 New York Times analysis on the heels of Walmart’s departures from South Korea and Germany a few months prior cited a home-office spokesperson’s candid acknowledgment of Germany as “a good example of [the company’s] naivete” in its expansion (her words). The Times piece found that “[s]ome of Wal-Mart’s problems stem from hubris, a uniquely powerful American enterprise trying to impose its values around the world; however, the message from these missteps is now registering loud and clear” (Landler and Barbaro 2006). Was Walmart simply following a trend of U.S. multinationals stumbling overseas? In 2006 an insightful scholarly analysis argued, on the contrary, that many previous U.S. companies over earlier decades in both retail and manufacturing “became successful in the international arena by adapting carefully to local markets, either by adopting local habits or by developing special product lines to suit local needs, neither of which WalMart has done” (Hugill 2006). Still, to be fair to this relative latecomer to globalization, despite these setbacks the scale of Walmart International was vast, and foreign sales represented the fastest-growing share of the company’s sales revenues by the early 2000s (with international sales constituting 16.3 percent of all sales in 2002 and up to about 22 percent of global sales by 2006, albeit below the company’s stated goal from the late 1990s of reaching one quarter by 2005). Moreover, the company had demonstrated an ability to operate successfully in countries located on four continents. In the end, the company hardly seemed fazed by these setbacks, doubling down on its expansion in Brazil and elsewhere around the globe in subsequent years.

Initial Years in Brazil Walmart founder Sam Walton’s interest in the Brazilian market started in the early 1980s. After spending some time in global travels that included Germany, France, Italy, South Africa, United Kingdom, Australia, and South America, he was impressed in Brazil by “Carrefour’s giant stores”— referring to the “hypermarket” model combining a wide selection of both

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general merchandise (dry goods, like electronics and clothing) traditionally sold in retail discount chains with the food and perishable goods traditionally sold in grocery stores and supermarkets, all in a single huge format usually located outside large cities and catering to carbased consumers (Walton and Huey 1993). With this experience, Walton decided to launch a beefed-up version of hypermarketsinitially in small towns and rural areas in the United States with ample available cheap space, which the company branded as “Supercenters.” Compared to international supermarket competitors, Walmart was a late mover in Brazil and less aggressive and extensive in terms of its ongoing global expansion. Of most direct note, Carrefour had operated in Brazil since 1975 (ICMR 2009). While Walmart went from zero stores abroad in 1990 to operating in 11 countries (plus Puerto Rico) by 2005 (Table 3.1), Carrefour went from operating already in six countries outside France in 1990 to a sales presence in 31 countries outside France by 2006 (see Table 3.2). Brazil was attractive to the company because of its large population and a strong middle class that seemed destined to expand under market reform and economic liberalization (Dalla Costa and João 2005). Initially trade liberalization occurred beginning in 1990 under the government of Fernando Collor (1990–1992), but market reforms were broadened and deepened beginning with the Real Plan anti-inflation stabilization plan through adoption of a new currency in 1994 by the outgoing Itamar Franco government (1992–1994) under Finance MinisterFernando Henrique Cardoso; these reforms were then carried forward during Cardoso’s own subsequent two terms as a center-right president (1995–2002). Privatization of state enterprises, continued trade liberalization, as well as flexible labor market and relations reforms (discussed below) were adopted or expanded under the Cardoso government. When the initial decision to enter the market in 1994 was taken (with the first store opened in May 1995), the Real Plan had begun to stabilize the economy and reduce inflationto single annual digits from four digits. Walmart formed a 60/40 joint venture with the Brazilian-owned Lojas Americanas retailer in the first half of 1994, which was dissolved in December 1997 when the American company bought out its junior partner (which had trouble absorbing the venture’s initial losses, unlike its deep-pocketed foreign partner). As a retailer that had operated in Brazil since the 1920s and was headquartered in Rio de Janeiro, Lojas

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offered the advantages of know-how on distribution centers that would be key to setting up and operating Walmart’s distribution and logistics systems (Heitmann 2002; da Rocha and Dib 2002). Somewhat unlike its initial U.S. strategy, the company opened its first five stores (four Supercenters and one Sam’s Club in 1995) in metropolitan São Paulo, Brazil’s largest city and metro region, taking advantage of existing distribution centers through its joint venture. Subsequently, it began to focus more on the interior of São Paulo and then expand into two other states in Brazil’s southeast (Rio de Janeiro and Paraná), reaching 16 stores and about 6000 employees as of mid-2000 (IOS 2000). By 2002, the firm had bumped up its national market share among retailers to a modest sixth, with 22 stores. Still, the country’s leading business newspaper of the time referred to Walmart’s expansion strategy in Brazil over its first seven years as “timid” compared to that of its largest competitors (Martinez 2002). While the absence of separate, publicly reported subsidiary profits makes such calculations difficult, the firm lost between US$35–40 million in 1995 according to industry analysts, due at least in part to selling a great deal of merchandise below cost to try to attract customers (Gazeta Mercantil 1996). The same source reported losses of R$32 million (about US$30.9 million) in 1997,6 while the subsidiary’s president indicated an unspecified amount of losses in 1997 and the company’s first annual profit only in 1998, its fourth year of operation in Brazil (IOS 2000, 23). In assessing Walmart’s slow road to profitability in Brazil, and the modest pace of its initial expansion, we must, first, consider the heavy investments the company was making in a large number of countries simultaneously (and at home), as well as the country’s moderate to sluggish growth rates (which averaged 2.4 percent over 1995–2002, with a high of 4.4 percent in 1995, and a low of 0.3 percent in 19987 ). National growth suffered amidst the dislocations of market reforms and outward economic opening as well as global financial crises affecting countries such as Brazil indirectly despite its currency and price stability. However, second, attention must also be paid to the way in which Walmart was impacted negatively by countermoves from its rivals Carrefour and Grupo Pão de Açucar (GPA) as well as some of its own shortcomings or failures in adapting to Brazil’s regulatory and business institutions. Rather than localizing quickly, the firm initially sought to transfer home-office practices that had proved astoundingly successful in the United States and North America but which encountered, on the unfamiliar terrain of

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Brazil, pushback or resistance from suppliers, competitors, and regulators as well as equivocal responses by consumers. Among the pillars of Walmart’s competitive model that it sought to replicate in Brazil were four: (1) nimble logistics and inventory control enabling the optimal amounts of an incredibly wide range of merchandise to constantly be available on shelves; (2) close but asymmetric relations with suppliers (based on steady price reductions and direct supplier delivery to distribution centers); (3) an everyday low prices (EDLP) model based on constant, low prices (as opposed to periodic discounting); and—as discussed in the next section—(4) a distinct “Walmart culture” based on employee (“associate”) loyalty and commitment, a customer service orientation, and with “open” lines of communication between management and workers without organized intermediation (introduced in Chapter 2 and discussed in the next section as integral to the company’s repressive familial workplace regime). The intention to implement EDLP was indicated in November 2015 in a press declaration by the directorsuperintendent of its joint venture partner Lojas Americanas, José Paulo de Amaral: “Walmart will have everday low sales, without special discounts [liquidaçõoes ]” (Barelli 1995). Contrasting this with what the article notes is Carrefour’s “decentralized,” store-specific pricing policy, Amaral goes on to point out the challenge Walmart’s strategy was intended to pose to its global French competitor: “Carrefour has two price policies–one for stores close to Walmarts, and another more expensive one for stores that are farther away.” Nonetheless, the American firm proved unable to adhere to and implement EDLP pricing during this period or even, for its first couple years in Brazil, to ensure a constant in-stock position on its shelves for its wide variety of merchandise—in large part due to difficulties with suppliers. As da Rocha and Dib (2002, 67) explain, upon the country’s entry into Brazil manufacturers still held the upper hand against retailers given the former’s size and oligopolistic market position; this meant Walmart’s renowned strong-arm, price-cutting pressure tactics were often unsuccessful and even backfired. There were also challenges throughout the latter half of the 1990s trying to find the right product mix for a different consumer market. In the early years, some suppliers openly resented and resisted requirements for exclusivity as well as refusing to comply with delivery strictures (e.g., that they deliver to warehouses known as distribution centers) as well as with demands for steep and ever-increasing discounts. Rival firms and manufacturers expressed outrage that Walmart was initially selling

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below cost on many goods as well as the U.S. firm’s demands for exclusivity (da Rocha and Dib 2002, 67). Some rivals also tried to impose their own exclusivity arrangements on suppliers as a competitive reaction (da Rocha and Dib 2002, 68). Walmart stores suffered from a 15 percent out of stock position on items (equivalent to 40 percent of sales) in the company’s initial two years (da Rocha and Dib 2002, 67). By 1997, the firm began to reduce its merchandise mix in an effort to “improve instock positions and inventory turns,” in Brazil as well as its Mexico and Argentina operations (Seckler 2000). Competitors and rivals complained to the Brazilian Supermarkets Association (ABRAS) and called for it to file a complaint to the federal competition authority CADE8 to investigate and fine Walmart for violating laws on unfair pricing. Though neither such legal action was ultimately taken, it seems that the threat of action by such a powerful agency caused the firm to scale back its heavy-handed practices. Rivals such as market leaders GPA (known at the time as Companhia Brasileira de Distribuição and associated with and later controlled by the French Casino MNC) and Carrefour responded to the American giant’s incursion into Brazil with expanded investments combining new stores as well as acquisitions and greater emphasis on automation (da Rocha and Dib 2002; Minadeo 2008). With time and by the century’s end, nonetheless, Walmart seemed to have adapted reasonably successfully to the Brazilian market, enjoying modest commercial success. As another Brazilian business newspaper put it in 2001: “after a mishappen start outside the U.S. market, the retail chain finally seems to be learning how to sell things in other countries” (Valor Econômico 2001). In its supplier relations, Walmart Brazil was forced to adapt in part to “local supply practices” while it also directly and indirectly—through impacts on suppliers as well as on the practices of competitors— contributed to efficiencies in the overall supermarket sector (da Rocha and Dib 2002). It had poached executives from rival chains for its stores and focused primarily on new store (“organic”) growth. Yet until its expansion from 2004 through acquisitions (discussed in the next chapter), it remained a second-tier player in terms of national market share in Brazil and a geographically confined presence in the country’s southeast. As is widely discussed in the literature about the company’s initial expansion into the rest of North America in its first phase of global expansion, Walmart benefited in those countries and territories from a set of

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distinctive attributes: low levels of planning and zoning; weak antitrust regulation; legal gaps that enabled it to resist unionization de facto or de jure; and (though less so in Canada) the ability to keep wages low (essays in Brunn ed. 2006 and in Lichtenstein ed. 2006). Yet we know from this same international literature on Walmart that it also has often confronted more constraining national regulatory contexts outside the North American region in such moves, as well as faced countermoves to its market destabilization efforts by important established actors— competitors, suppliers, and workers and their unions, among them. In the labor sphere to which we now turn, the company encountered an odd and shifting mix of constraining and enabling dimensions as it sought to transfer its model of repressive familialism including fierce anti-unionism.

Unions, Labor Relations, and Human Resource Management The remnants of Brazil’s partially reformed state corporatist system of labor organization and regulation, evolving since the 1988 Constitutionadopted early in the new post-1985 democracy, meant that the nonunion option it surely would have preferred (or the phantom “protection contract” option it was able to pursue from the start in Mexico, as discussed in Chapter 5) was never on the table. Walmart stepped into a situation—whether with its greenfield stores or in those it acquired—where wage and contractual norms were set by collective bargaining contracts negotiated by already existing sector-wide commercial employers’ organizations (usually local affiliates of state-wide federations) with commercial workers’ unions organized at the municipal level (roughly comparable to a U.S. county). Each such business and workers’ union (sindicato) was based on the principle of a monopoly of representation (unicidade sindical ) maintained from the 1930s-era system and still funded by the obligatory union tax (imposto sindical ) assessed on all workers (formal members or not), though formal membership (as opposed to merely being covered by union contracts and usually involving additional bargaining fees) was a voluntary decision for workers (and on all firms in the case of employers’ unions). Put differently and in terms employed in efforts to compare labor statistics across countries under the rubric of the International Labour Organization (ILO), “collective bargaining coverage” in Brazil (standing at about 72 percent of all unions of formal-sector workers that had collective bargains in 2001) was much

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higher than “union density” meaning the share of workers who have opted into union membership (29 percent among all those working in the formal sector, which is to say wage earners with carteira assinada or a work card signed by an employer in Brazil, in 2002) (Cardoso and Gindín 2009, 33–34, 39). The geographically decentralized structure of union organization in Brazil has always been considered advantageous by multinationals with many operations spread around different regions of the country; the centralized national structure of LR/HRM of MNCs such as Walmart, able to deal individually and serially with local unions and often in a situation of information asymmetry and with political-ideological divisions among unions and with distinct contract renewal dates by municipality (roughly, a county in U.S. terms) allows for unequal bargaining and lower direct and indirect labor costs.9 This situation was discussed in research involving one of the co-authors published in Barbosa et al. (2011), among the 45 multinationals (including Brazilian large companies with overseas operations) whose labor rights compliance and employment relations the Instituto Observatório Social (IOS) non-governmental organization (NGO) had monitored in reports based on site visits (and in some cases follow-up interviews) issued over 2000–2010. In that research, Walmart—the first of the companies monitored based on 1999– 2000 fieldwork (IOS 2000)—was among the small minority (a total of five)10 characterized in employment relations by a “status quo” orientation among both management and unions; most of the latter were affiliated with the business unionist Força Sindical at the time of research, the report noted. This categorization meant, for the authors, “‘local’ collective bargaining,” “pulverized unions with different contract renewal dates,” “absence of a union workplace committee,” unions lacking an “agenda of change,” and “strictly local negotiations” limited to “traditional issues (wages, benefits, ‘local’ issues)” (86). By contrast, in those multinationals in which at least the union had a “change agenda” and in some cases ones where management was also disposed toward “change,” new forms of workplace representation, more aggregated forms of company-level labor-management negotiation and consultation, and new subjects of negotiation—related to technological change, working conditions, job stability, results and profit sharing, conditions of outsourcing and outsourced work, and other aspects of productive restructuring—were documented by the respective IOS reports.

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It is worth noting that, though a comprehensive list of all Walmart store locations for this time period was lacking, of the eight cities in three states that constituted more than half of the company’s 22 stores as of 2001 that we were able to identify,11 the greater São Paulo industrial suburb of Osasco was the only one during this time period with a CUT-affiliated commercial workers’ union affiliated with the leftleaning Central Única dos Trabalhadores (CUT) labor center. The CUT’s affiliated National Confederation of Commercial and Service Workers (CONTRACS) covered the supermarket retail segment, and the information is based on examination of the CONTRACS-CUT affiliation list from 2002. It is plausible (but would require additional research to assess) that during this period of more cautious expansion, Walmart deliberately avoided neighboring cities that did have CUT commercial unions, such as São Bernardo do Campo (stores were opened in the two other cities that make up the ABC region, Santo André and São Caetano do Sul, but not there in this period) and Belo Horizonte (a store was opened in adjoining Contagem in the metro area). The initial experience with a CUT union at its first two stores in Osasco could possibly have been cautionary for the firm, though later expansion would bring the company inevitably into the jurisdiction of some CUT unions. Given union and collective bargaining pulverization and the formalistic, narrow character of traditional collective bargaining, the disadvantages for Walmart of having to deal with a multiemployer collective bargaining and employer representation structure, as discussed below, may have paled. In addition and as also detailed below, this acquiescence did not preclude in any way active measures by Walmart to weaken unions’ freedom of action and funding as well as bargaining processes and agreements—the company sought to undermine the authority and influence of already weak unions, whose associational power was frayed related in part to confining labor institutions that only unions in better organized heavy manufacturing and higher-end service sectors (such as banking) were making some inroads against. In addition, structural power(to shut down or slow commerce by withholding labor power) was weak due to the nature of retail work and workforce. (An aspect of this structural weakness this study was not able to explore is the lack of attention by unionists around the key role played by distribution centers in Walmart’s logistics, which in theory should have strengthened their structural power and provided a tool for those commercial workers’ unionswith such centers falling under their representational jurisdictions.)

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Formally and legally, the newcomer Walmart thus had to work within municipal-level, multi-firm contracts it did not negotiate on its own and that were shaped by competitors and other commercial firms (within employer organizations that were formally one-firm/one-vote), all of whom were accustomed to operating within such entities in a way that Walmart was not. This situation meant that the basic parameters and floor for wages at Walmart were not set directly and unilaterally by the firm, an important difference from the United States where it was union-free or with countries where it encountered firm-level and/or workplacespecific bargaining. Within this setting, while there was still possible recourse to the labor courts for mediation and even compulsory settlement, the historic “judicialization” of contract disputes in post-1930s Brazil declined considerably, and autonomous collective bargaining—relatively much freer from state oversight and recourse to labor courts to resolve disputesg—grew quickly. For instance, Cardoso and Lage (2008, 111) report data from the Supreme Labor Tribunal (TST in Portuguese) that shows a near continuous year-on-year trend of decline in the annual number of compulsory labor-employer settlements by labor courts (dissídios coletivos ), from a peak of about 3400 in 1991 down to about 540 in 2002. While we lack data on the frequency of firm-level agreements involving Walmart, such accords (acordos that are typically complements or supplements to municipal cross-firm collective bargains known as convenções coletivas ) were common in the retail sector—nationwide in the retail sector (a component of the larger commercial sector) in 2000, for instance, 54.6 percent of all agreements reached were between individual firms and unions.12 Union density in Brazil had increased in the 1980s (albeit with modest subsequent declines over 1998 to 199913 ), and unions had become consolidated by the early to mid-1990s, with high levels of conflict in the 1990–1994 period leading up to the Real Plan of macroeconomic stabilization. These developments gave way to a more difficult environment for union activity in the latter half of the decade with slower economic growth, increasing unemployment, and flexible labor market reforms. Yet commercial workers’ unionshad not been among the main protagonists of these movements. While we lack a precise breakdown of union density by sector, the national statistics agency provides one rough gauge: commercial workers made up 11 percent of all union members in Brazil in 2001 though they constituted 22 percent of all (formal-sector) workers in that year (IBGE, 32). Put differently, commercial workers

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were only half as likely to be dues-paying members as were noncommercial workers. Progressive CONTRACS-affiliated unions in 94 cities did represent 558,000 commercial workers (mostly in food retail) as of 2002, with a membership rate across services and commerce of 14.6 percent.14 Another important point of reference is a slight uptick in national unionization across all wage earners from 17.7 percent in 1999 to 20.1 percent in 2002, which helped the labor movement recoup some of the losses of the 1995–1999 period, when rates fell from 21.6 percent in 1995 to 17.7 percent in 1999 (see note 13). In addition to the difficulties of pulverization of collective bargaining at the municipal level in Brazil—a weakening factor for labor’s leverage—the growing political and organizational rivalry within the labor movement and predominance of conservative business unions in the commercial sector also weakened Walmart and other supermarket workers. The three municipal-level case studies chosen by the IOS team for their 2000 study of Walmart tellingly reflected this ideological diversity and consequent organizational fragmentation weakening labor’s associational power: the militant CUT15 (in two stores both under the Osasco Commercial Workers’ Union (SECORin Portuguese) in the São Paulo suburb of the same name, a municipality with a strong industrial and union tradition); the moderate Força Sindical (Union Force) with its self-proclaimed “unionism of results” business union orientation (the city of São Paulo)16 ; and the more old-fashioned conservative and bureaucratic unionism (organized around the remnants of the official corporatist federations and confederations) of the Independent United Union or USI (in the interior São Paulo city of Bauru, located about 300 kilometers to the northwest of the capital). As of 2001, CUT had 2828 affiliated unions across the Brazilian labor force and the Força 835, with three others significant labor centers(General Workers’ Center or CGT, Autonomous Workers’ Center or CAT, and Social Democratic Unionism or SDS) accounting for 239, 86, and 287 unions each, respectively, and smaller ones including USI having a combined 18 affiliated unions (Cardoso and Lage 2008, 46). (In July 2007, the CGT, CAT, and SDS would merge to form the General Workers Unity or UGT, joined by some splinter unions from the FS and CUT.17 ) In sum, Walmart had to tolerate the existence of unions, though they were divided and mostly weak and pliant organizations. The partial exceptions were the stores represented by CUT-affiliated commercial workers’ unions (which constituted a minority of the commercial

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unions representing Walmart workers), as will become evident below and in the next chapter. In addition, Walmart faced formal-legal constraints—some set by the Consolidated Labor Laws (CLT) dating to the 1930s and others set or extended in the 1988 Constitution. Among the constraints were a workweek set at 44 hours per week, the requirement of a weekly remunerated day of rest, a federally established minimum wage, the payment of an annual end of year sum known as the “13th monthly wage” (13o salário), and paid maternal and paternal leave. The fact that these benefits, as well as health care coverage through the official government program for formal-sector workers and official pension program, came through the state (leaving aside their level of generosity) meant that fringe benefits played only a minor role in collective bargaining. However, as discussed in Chapters 4 and 6, the provision of medical, dental, and legal services to union members was a traditional union function criticized by left CUT unions and the broader new unionist movement that arose in the 1970s to early 1980s which gave rise to the CUT. This service orientation was derided as “assistencialismo” (welfarism)—but one which unions such as that of the city of São Paulo actively embraced as central to their mission. Yet at the same time, the company set up operations within an enabling context in which, in parallel to macroeconomic market reforms and deepening integration into the global economy, the Cardoso government (1995–2003) was pursuing an agenda of labor flexibility that sought to roll back protections, strengthen employers, and undermine progressive unions. Although collective labor law reforms that might have permanently undermined unions’ capacity to organize and bargaining collectively were successfully resisted in Congress by the CUT and its political allies,18 nonetheless regulations and decrees (some temporary, others permanent) did tilt the playing field toward employers. Among these reforms affecting individual and collective labor law were: wage indexation clauses were outlawed; labor-court judgments were accelerated; part-time and temporary contracts were allowed; “hours bank” flexible workplace scheduling arrangements and temporary suspension of contracts by distressed firms were both permitted; and the country withdrew its ratification of ILO Convention 158 regarding unjust dismissals shortly after it had formally entered into force (Cook 2007, 87–92). Of particular importance to the supermarket sector, a temporary decree (Provisional Measure 1539/7 of October 1997, which was renewed as Provisional Measure 1982/76

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of October 2000) lifted a former prohibition of opening stores on Sundays and holidays, subject to the ultimate autonomy of municipal governments to determine or outlaw such openings (Lima 2006). In November 2000, the measure became a law (Law 10.101), authorizing commercial opening on Sundays though with reference still to the constitutional provisions on municipal autonomy on this issue; the law made no mention of the need for labor-management agreements to allow or regulate the terms of Sunday work. Sunday and holiday workproved to be a particularly contentious labor issue, as had been true in some European countries in the retail sector with traditionally restricted shopping days where opening on Sundays or additional compensation on weekends were contested issues. Within this context, Walmart kept unions at arms’ length and sought to deal with them as little as it had to and undermine them, and also flouted the terms of collective bargains and national labor law where it found them inconvenient (IOS 2000). The IOS three-municipality, fourstore study of labor standards compliance, which served as a baseline for our research, was based on interviews with union officials and Walmart workers and public documents, and Walmart management refused to cooperate and later criticized the findings when they received more public attention. The study, framed in terms of compliance with national and international law governing core labor standards, found that managers prevented free access of union officials—physically located outside the workplace in Brazil’s municipal, occupational category-wide union structure—to the workplace to meet with workers. Union literature was not permitted in the workplace, which further undermined communication between union leaders (physically located outside the store under Brazil’s unionism by broad occupational category), though it was permitted at the workers’ point of entry into stores. The research also found in worker interviews that some employees faced pressure not to become or remain union members. In the Bauru store, the IOS team found credible evidence that management was behind a campaign that encouraged and facilitated workers’ filling out form letters for which Walmart provided a template (on a store bulletin board accessible to employees), as a result of which 82 such workers sought return of their automatically withheld financial contributions to the union (that is, union tax, which constitutes one day of annual pay). Elections for the employee seats on bilateral worker-management health and safety bodies mandated by labor law

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called comissões internas de prevenção de acidentes (CIPAs, literally accident prevention commissions), were poorly publicized by management, and the preventive and problem-solving work of the respective CIPAs in each store was hamstrung by poor funding from store management. In firms in Brazil with a strong union presence, unions often work together with CIPAs and try to ensure that allies are elected to its worker-elected seats (half of the seats are reserved for management by law, the other half for workers); like union delegates on the shop floor that exist at some worksites (though not at all given how vast the number of establishments in question), they enjoy job security while holding their position. Absent ethnographic or survey research with Walmart workers from this period, we lack a clear picture of the effectiveness of the company’s effort to inculcate “Walmart culture” and a commitment to the company and customer service. Yet the report does note that all employees, including managers, were required to sign the company’s “ethical code of conduct” (discussed in Chapter 2) upon hiring. Spelling out norms for professional and respectful treatment of co-workers and subordinates and a “workplace free from any repression,” the code prohibits discriminationand intimidation (in a broad, non-categorial fashion) and notes the firm’s commitment to obey national laws (without specifying which) and respect human rights. Despite laying out Walmart Brazil’s “policy … of conducting business in a socially responsible and ethical manner in terms of protecting the environment, health and safety,” the code is silent on the subject of freedom of association, labor rights, and labor law per se. It is explicit, however, in banning the distribution of any written material in the workplace (IOS 2000, 32, 48, 62). The famous Walmart cheer performed at the start of each work shift—discussed in Chapter 2—was introduced from the start, as attested in IOS interviews with unionists in four stores in which co-author Veiga participated in 1999–2000. YouTube clips (which are ubiquitous from around the world where Walmart operates) available online as of March 2019 date back as far as 2007 for Brazil19 ; some court cases adjudicated in the late 2000s and 2010s (under a more aggressive and activist labor prosecutor corps) and resulting in stiff fines on the company centered on worker complaints about forced participation in what they regarded as an unnecessary and humiliating ritual and one that judges have found violates constitutional protections (see Chapter 4). Given the time lag of cases advancing through up to three tiers (if the losing party appeals) and with a backlogged court system,

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some of these cases stretch back to events from the mid or even early 2000s. In addition, it is clear how pervasive the interchangeable notions of the “Walmart family,” “Walmart way,” and “Walmart culture” (hyphenation of the company name as “Wal-mart” was still common at the time) were to company discourse and identity amidst international expansion by perusing, for instance, the company’s glossy, magazine-style 1997 annual corporate report. The word “family” appears 15 times over 22 photofilled pages (eight times with the company name just before), “culture” eight times (six times with the company name just before), and “Walmart way” three times (twice with “of doing business” just after). In a section on the company’s global expansion and creation of a “global brand” based on “hometown values” that cites by name “associates” from stores in the United States, Canada, and Mexico, the company extolls how well its culture travels: Community involvement, responding to local needs, merchandise preferences, and buying locally are all hallmarks of the international Wal-Marts, just as they are in the United States. Perhaps it is Wal-Mart’s emphasis on serving its hometown — wherever that may be — that makes Wal-Mart culture travel so well… Mexican associates, for example, quickly become devotees of the Wal-Mart way. (Wal-mart 1998, 17)

With only five stores at the time, Brazil is not mentioned except in summary statistics of store locations, but the earliest available screenshot captures of the company’s website as of Aug 2019 from the Internet Archive show that “Walmart culture” and “learn[ing] about the history of the company” were featured prominently on the home page.20 (Unfortunately, these and other links are inactive, and this combined with the lack of any annual reports in Brazil until 2007 narrows our insights into how the company sought to inculcate company culture and whether there was any daylight between how it was defined in Brazil and globally in this period). In the company’s 2000 annual report, Walmart’s unabashed ethnocentrism(here using the term in its critical, anthropological sense and not just as “international corporate strategy” based on a particular and distinctive home market) and wager on the spread of US-style retail and shopping habits and “Americanization” is on display in discussing Brazil and its expansion plans there for 2001: “The country’s recent economic problems have presented a challenge, but Brazil’s tendency

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to follow U.S. cultural cues has been very encouraging for Wal-Mart ” (Wal-Mart 2001, emphasis added). Whatever the strong if fragmentary evidence of intention to export Walmart’s HRM/LR model to Brazil, mitigating against the soughtafter high levels of worker loyalty and commitment were high levels of turnover. While generally elevated in supermarket retail as a whole, turnover was portrayed by the IOS study’s union informants in Osasco and Bauru as part of a deliberate Walmart strategy of cost reduction through low wages, which sometimes included rehiring formerly dismissed workers at lower wages (IOS 2010, 28, 39, 49). Analyzing aggregated Labor Ministry employment data for the three municipalities and the supermarket sector as a while (firm-level breakdowns were not available), the IOS investigators found levels of annual turnover of 50.1 percent in São Paulo, 97.6 percent in Osasco, and 76.4 percent in Bauru over the two-year, 1998–1999 period (IOS 2000, 49). The IOS report was unable to quantify and document gender discrimination in respects other than wage inequality, and there it did so at the overall supermarket/hypermarket level within municipalities and aggregating all firms. Yet the researchers found evidence of discriminatory treatment of women at multiple levels at the four Walmart stores in the three cities—a problem that has been the subject of considerable press attention and continuing legal action in Walmart’s operations in the United States (Featherstone 2004; Sainato 2019). Women were found to be underrepresented among supervisors and completely absent among high-level management. Incidents of sexual harassment (which would become the subject of legal cases in the post-2003 period) were reportedly frequent. Notably absent were training materials and any other evidence of a culture of zero tolerance for such practices. At the level of wages, in a workforce that was still dominated by men (61.2 percent in Osasco as of 1997), women across all commercial establishments over 1998–1999 were paid a range of 70.1 percent (São Paulo), 71.2 percent (Osasco), and 90.0 percent (in Bauru) compared to men who were also newly hired or left their jobs over the same time period (IOS 2000, 50). In the only city where such wage data could be compared to schooling levels (Osasco), the IOS team found that women consistently earned less than men across all but one educational category (completed primary school), ranging from incomplete primary school through completed university degree (IOS 2000, 51). Moreover, in the only firm-level data specific to Walmart, the study reported that of the

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82 dismissed or quitting workers legally recorded by the Bauru union (as per labor law), women on average earned 75 percent of their male counterparts (IOS 2000, 52). Unequal wages were driven in part by what the report terms a “segmentation” of occupations, in which women overwhelmingly predominated in front-line jobs at checkout counters while they were excluded from higher-paying back-of-store operations such as the meat shop and logistics. While male-dominated unions apparently did not make such gender equality issues a priority in their negotiations with employers, in 2012 the progressive CUT-affiliated CONTRACS federation created a Women’s Secretariat (Secreteraia da Mulher) to spotlight these issues and organize campaigns around gender issues (CONTRACS n.d.). Overall, the firm seems to have been opportunistic in its flouting of Brazilian labor law and the terms of collective bargaining agreements negotiated by employer sindicatos with labor unions. Nonpayment of legally and contractually specified premiums for hours worked, pressure for workers to agree to overtime, and overtime work beyond legal daily and weekly limits21 were all common complaints of union and worker informants in the three cities with Walmart stores from the IOS study. This mirrors a national trend of excessive overtime in the commercial sector, where, for instance, commercial workers on average in three of the country’s largest cities (São Paulo, Porto Alegre, and Belo Horizonte) labored between 50 and 53 hours per week in the first half of 2006— compared to an average of 31–43 in manufacturing and 33 to 36 hours in services in those cities, and to the 44-hour constitutional maximum (DIEESE 1996, 4). On the contentious issue of requiring work on Sundays and holidays, Walmart took advantage of confusion created by the aforementioned temporary government decree of October 1997 to violate the terms of collective bargaining agreements with the Bauru and Osasco unions by opening regularly on Sundays (or in the case of São Paulo on holidays) and requiring workers to show up or face dismissal or other sanctions. In the Bauru case, the agreement expressly provided for work only on Monday through Saturday and in São Paulo only on some Sundays proceeding holidays, and in neither case had the municipal government formally changed the law to authorize Sunday opening. In the case of Bauru, the Labor Ministry’s regional office twice cited the firm for legal violations and called it in for ineffectual roundtables with the union, and

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in one instance city council members came to the meeting as well. Eventually the labor prosecutor opened a legal investigation of the company for its continued violation of the contract. Yet the firm continued to refuse to negotiate with the union over the terms of allowed workdays beyond Monday to Saturday, and to disregard the municipal-level contract as well as national law. In the case of São Paulo, while the municipal government had allowed for Sunday opening but closures on official holidays when Walmart first opened, the issue in question was the firm’s intransigence in flouting the law by opening on Sundays as well and its refusal to engage with the union on the issue. The only union that took a firmer stance involving mobilizing rank and file was the Osasco, CUT/CONTRACS-affiliated union, SECOR. The union engaged in a five-hour walkout on April 25, 1998 by a combined 720 workers at Walmart’s Sam’s Club and Supercenter stores in the city to pressure the firm to the table to discuss several contractual clauses it was not fulfilling; these issues concerned not just Sunday work but also merchandise vouchers that were not being offered, cashiers being required to be present but off the clock while managers counted out their registers, and lack of publicity in the workplace for CIPA heath and safety commission elections (IOS 2000, 34–35; DIEESE 1998). In a negotiation four days later mediated by the regional labor delegation (Delegacia Regional do Trabalho, or DRT) under the Ministry of Labor, the firm relented on these issues to the union’s satisfaction, agreed to negotiate Sunday work provisions collectively with the union through the employers’ union, and agreed not to dismiss workers who had walked out. Early the next year, an agreement on Sunday work was reached for large retail establishments city-wide, in which workers would volunteer for Sunday shifts, would be allowed at least one Sunday off per month, would receive premium pay on Sunday, and would be provided a free workday meal on Sundays. (Meanwhile, in its November 2002 collective bargaining agreement, the conservative, USI-affiliated Baurú union established 100 percent additional pay for Sunday work—double time— yet with no provisions for having any Sundays off each month, or meal or transportation vouchers.22 ) After the walkout and the subsequent bargaining session, the union informants in Osasco reported, the firm’s improved “attitude” toward negotiations and the collective bargaining agreement and process were notable (IOS 2000, 40). However, this posture was apparently more tactical and situational—in response to a show of union force—than the

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sign of any larger strategic departure. Illustrating its intolerance for strikes, the firm called in police to form a corridor to allow access to the store for the few workers and any customers not honoring the picket line during the half-day warning strike, and also brought in employees from other stores (despite the illegality of using strikebreakers in Brazil). The IOS notes conflicting reports about whether some of those who went on strike were dismissed in subsequent months (an explicit violation of both labor law as well as the terms of the agreement following the strike), finding it difficult to determine the veracity of some such affirmations by worker informants given the high levels of turnover at the stores. Generally speaking, the Osasco strike appears to have been an exceptional event at Walmart stores or in supermarkets more generally, as formal walkouts in the retail and wider commercial sector were at best rare. Based on our review of the available monthly “strike reports” published by the inter-union trade union statistics agency (DIEESE), which cover the January 1995–February 2000 period (after which data were aggregated more broadly), the only incidents that at least partly included retail workers—besides the Osasco strike—were a larger national (general) strike protesting government policies on June 21, 200623 and a one-day warning strike in the northeastern state capital of Recife in October 2017 that extended throughout the commercial sector (Boletim DIEESE, various years). In a union leader survey by the national statistics agency covering 428 commercial workers’ unions, only eight percent reported strikes in the retail segment over the course of the year 2001 (compared to 20 percent of unions in manufacturing as a whole, for example). They were primarily “defensive” or “reactive” in character among commercial workers—only 17 percent sought the “widening of rights” while 29 percent were over employer noncompliance, 14 percent sought the opening of negotiations, and 32 percent sought to maintain existing contractual terms (IBGE 2003, 45). Returning to the Osasco case, there were also job actions and protests that fell short of formal strikes, though of unknown number and frequency. The historical section of the Osasco union’s website notes that “[s]ince the logic of flexibilizing rights didn’t make sense for Brazilian workers, there were constant work stoppages in the stores of Walmart, Carrefour, [Dutch clothing retailer] C&A, [rival supermarket] Pão de Açúcar, [clothing retailer] Besni, and [beauty products retailer] Memphis, for example” (SECOR n.d.). By contrast, the unions in the city of São Paulo and the interior city of Bauru mirrored the conciliatory style of the

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moderate to conservative national labor centers to which they belonged, eschewing collection action by workers even as they expressed pointed disgruntlement with certain management practices. Among these were the American company’s penchant for not complying with collective bargaining deals reached by the respective municipal employers’ association or with certain terms of labor law, such the maximum 44-hours workweek or the aforementioned ambiguous and shifting legal provisions regarding Sunday and holiday work. Other legal constraints on Walmart’s treatment of workers, via labor courts and labor inspection, were relatively weak during this time period, though they would become much more consequential in the period from the mid-2000s onward (see Chapter 4). There was a nationwide “explosion” of individual claimsafter the extension of various worker rights in the 1988 Constitution, although the lack of access to firmlevel data on the submission and adjudication of such disputes prevent us from knowing how commonly Walmart faced such claims in this period (Cardoso and Lage 2008, 99). Such claims went from about 900,000 per year in 1988 to a peak of 2 million in 1997 and stabilized at over 1.7 million over the 2001–2003 period (Cardoso and Lage 2008, 113). The authors attribute this “judicialization” of labor claims—almost exclusively made by workers who had recently lost their job, as is generally true of this judicial mechanism where workers fear reprisals if filing complaints while still employed—to a combination of the abovementioned weakening of unions’ organizational strength and bargaining power (after their 1980s resurgence) and growing efforts by firms to evade legal norms. As noted above, the larger context weakening workers was market reforms and the Real Plan stabilization program, flexible labor market reforms, and increasing unemployment (with unemployment rates averaging 5.2 percent over 1995–200224 and then only capturing those losing jobs in the formal economy); all this occurred amidst productive restructuring as well as sluggish growth. According to Cardoso and Lage, legal interpretations throughout as well legal reforms adopted in 1999–2000 together weakened workers’ legal representation and sought to push them into quicker, often inevitably smaller settlements and judgments.25 The upshot was that the individual claimsand settlement mechanism was only of limited significance in redress and only then for a minority of the 10–12 million Brazilian workers losing their jobs each year; in those limited circumstances they typically received only partial rather than full recompense

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even where legal determinations were favorable. Overall, incentives for firms, especially large ones, were to either settle claims quickly at less than the full amount of the legal entitlement of the aggrieved worker or, starting in 2000 and for larger claims, to string them out through appeals to higher-level courts and typically end up paying only a fraction of the amount of the lost wages, benefits, or severance contributions (or cost of occupational illness and injuries) that were the subject of the claims. In either instance, the individual claimsand the mechanisms for adjudicating them were clearly not an effective deterrent for firms in Brazil, which had a financial incentive to avoid legal compliance during this time frame, according to Cardoso and Lage’s extensive mixed-methodsstudy (see also Cardoso and Lage 2006). Analysts also reach a similar conclusion about the ineffectiveness of the labor inspection system in the 1990s to early 2000s in detecting, punishing, and deterring employer violations of collective labor rights (Cardoso and Lage 2005, 2008; Anner 2008)—though again the picture changes considerably in the subsequent time period, as discussed in the next chapter. Budget cuts and a reduction in the number of inspectors (auditores fiscais ) over the 1990–2002 period meant a reduction from 3285 inspectors in 1990 to 2371 in 2002, and a decline from 22.7 million workers employed in inspected firms in the former year to 19.9 million in the latter over the same time period (Cardoso and Lage 2008, 88). Anner (2008, 50) also reports, based on Ministry of Labor and Inter-American Development Bank data, an overall reduction in the number of inspectors per 100,000 workers over the 1990–2002 period, from 5.61 to 3.63. The author also quotes a 2005 ILO Committee of Experts report that found “local labor inspection offices…. [to be] ill-equipped and inadequate….” (cited in Anner 2008, 50). What is more, inspections of commercial establishments took a particularly hard hit—Cardoso and Lage (2008, 94) document that the share of the commercial sector in (declining) total workplace inspections fell from 49.7 percent in 1996 (the start of their time series sectoral breakdown) to 36.0 percent in 2002. Lacking specific data or case information on claims against or inspections of supermarkets in general or of Walmart in particular, we can nonetheless infer from these trends that regulatory constraints from these state agencies were relatively weak during the company’s initial years in the country.

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Walmart’s Work Flexibility Model: Transfer with Minor Adaptations During Walmart’s initial years in Brazil, the company thus faced fewer effective constraints in its workforce management and labor relations than it did in business/regulatory spheres relating to pricing and competition policy, relations with suppliers, the customer interface, and the responses of competitors. Its policies and practices kept wages relatively low, turnover high, working hours discretionary but often long, and kept unions as much as possible at a distance from the workplace and any sort of workplace conflict resolution role unless they were particularly aggressive in asserting their legal role and able to mobilize workers. Regarding wages, the median wage of supermarket workers in Osasco in 1997 was 6.25 times the minimum wage (IOS 2000), slightly below the median for all formal-sector workers in Brazil for that year of 6.3 times the minimum wage (CEPAL 1999, 31). As discussed in Chapter 4, Walmart workers and their families would be considered near-poor or vulnerable in stratification and social policy terms or working class in class terms, rather than extremely poor or indigent. In some ways Walmart Brazil’s LR/HRM posture during its initial years in Brazil can be seen as only a minimal adaptation of its unilateral, strong-arm anti-union stance in the United States and Canada or the use of phantom union “protection contracts” in Mexico (see the comparative discussion in Chapter 5). This minimal adaptation of what was mostly transferred or diffused home-country practices reflected a response, we argue, to marginally greater labor constraints in Brazil than in the United States (or Mexico)—that is, formally autonomous unions, a decline in state tutelage of collective bargaining leading to more direct labor-management bargaining, and the individual complaint and inspection components of the labor justice system. Counterbalancing those marginally greater institutional constraints were the opportunities afforded to Walmart by interunion divisions and rivalries writ large and in the commercial and retail segment; a sluggish economy and slack labor markets (the average unemployment rate was 5.4 percentage over 1995– 2002); and the relatively low costs of noncompliance with labor law and contractual provisions due to weaknesses in the inspection and labor justice systems. Put into a larger global perspective at the global firm level, the constraints it encountered during this period in Brazil were clearly fewer,

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on the labor front (as well as in other respects), than was true of its illfated incursion into Germany, which it entered in 1997 and exited in 2006 (Cristopherson 2006; Aoyama and Schwarz 2006). In that European country it was faced by the following: a strong national employers’ association (which it initially refused to join), a national commercial workers’ union (collective bargains with which it initially resisted respecting), a legally mandated works council(which it sought to circumvent), institutionalized sector-level bargaining, and restrictions on store opening times. Walmart in Germany tried to skirt all of these actors and constraints but at great cost, with considerable conflict, and with little success. Union protests at stores led the firm to relent and join the employers’ association and agree to abide by national-sectoral collective bargaining, undermining the cost advantages it sought. German customers were taken aback, and workers resented, the “ten-foot-rule” originated by Sam Walton (which has been translated as “three meters” in the rest of the world in its operations)—by which Walmart “associates” are required to smile, make contact, and greet any customer who comes within that distance—so the practice was scrapped (Landler and Barbaro 2006). The company also had to abandon the Walmart cheer which it had tried to impose (Landler and Barbaro 2006), and which the UNI Global Union representing service workers referred to in one article—citing its German affiliates—as making German Walmart workers into “low-paid cheerleaders.”26 The employeeelected works council with which the company met only sporadically, violating legal obligation, successfully took Walmart to court the year before it left the country over the morals clauses regarding romantic fraternization outside the workplace and other aspects of the 33-page ethics code it unilaterally distributed to employees with their pay stubs in 2005; such changes of company policy must be consulted with the works council under Geman co-determination law, the court also found.27 All in all, it is clear that, in Germany as in Brazil, the company endeavored to weaken and resist worker representatives at every turn, and to implement a repressive familial workplace culture, however much that conflicted with local laws and practices. It is also clear that labor conflicts and legal challenges at least contributed to the firm’s exit from that European country, which in the end stemmed most of all from a whole host of mismatches between the US-market-infused ethnocentrism of Walmart’s competitive model (logistics, supplier relations, pricing, etcetera) and the German institutional context (Cristopherson 2006; Landler and Barbaro 2006). Chapter 7 returns to this example given significant analytical

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parallels to problems contributing to the eventual exit from Brazil in 2018. In terms of the forms and combinations of flexibility introduced in Chapter 2, we conclude based on the limited available evidence, primarily from the IOS case studies, that the company relied in these early years in Brazil on three principal forms: numerical/external (ease of hire, fire, and in some cases rehire); working-time (forcing workers to labor on Sundays and holidays and with an hours bank system that adjusted weekly hours without overtime pay as well as overtime abuse in some instances); and remunerative (keeping general supermarket wages low in real and absolute terms). It seems that management also practiced a good deal of horizontal or internal flexibility, requiring workers to perform additional tasks and in other areas of the store without regard to job categories. Regarding employment/contractual flexibility, the relatively low cost and ease of shedding full-time workers (discussed further in Chapter 4) obviated the need to rely much on part-timers, in contrast with the common pattern of workers kept below full-time status (in part to lower or eliminate the costs of benefits tied to full-time status) at stores in the United States—and also in contrast to the prevalence of a sizeable part-time work force in contemporary global retail in the North more generally (noted in Chapter 2) and in some parts of of the global South. In that connection, the terms of part-time contracts (up to 25 hours) that were legalized by a 1998 executive decreein Brazil were generally found by analysts to be unattractive to employers: they prohibited overtime; were calculated proportionally to the minimum wage or collective bargaining reference wage or wage floor; and made vacation and other benefits proportional to those of full-time workers (Magalhães 2007). We lack specific information on outsourcing, though under Brazilian labor law the firm could externalize all activities not considered intrinsic to commerce, such as logistics, transportation, and employee food service. All in all, given low legal constraints and relatively lax pressure from unions and collective bargaining, the firm could work its full-time, inexpensive Brazilian laborers more intensively when it needed to at little or no proportional increase in cost, shed workers in moments of slack, and take on new staff in moments of demand buoyancy or when opening new stores. The next chapter will explore new constraints and challenges in LR/HRM encountered by Walmart in the 2003–2014 period.

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Notes 1. For an excellent overview, see the two-volume anthology of scholarship in Coe and Wrigley, eds. (2009a) as well as their introduction (Coe and Wrigley, 2009b). 2. Walmart, “History Timeline,” walmart.com, cited in Chaterjee and P. (2009, 3). 3. Gerardo Ruiz, quoted in Victoria Griffith, “Direct Benefits,” Euromoney Institutional Investor/Latin Finance, June 1995, 68: 22. 4. See Cristopherson (2006) on Germany, Aoyama and Schwarz (2006) on Germany and Japan, and Sang-Hun (2006) on South Korea. For a general analysis focusing on South Korea and Germany, see Landler and Barbaro (2006). For a general analysis focusing on South Korea and Germany, see Landler and Barbaro (2006). 5. Cristopherson (2006) finds this to be the case in Germany, where the company could not expand from its small initial foothold from a midsized acquisition, and Burt and Sparks (2006, 29) refer to the company’s strategic emphasis on “market destabilization.” 6. Gazeta Mercantil cited in IOS (2000, 23). 7. Authors’ calculations based on GDP growth rates in dollar terms reported by the World Bank, https://data.worldbank.org/indicator/NY. GDP.MKTP.KD.ZG?locations=BR. Accessed November 24, 2018. 8. Administrative Council for Defense of Competition (CADE), the antitrust and competition regulatory body in Brazil. 9. The advantages obtained by multinationals with Brazil’s decentralized union structure are well documented across various sectors by studies such as Wetterblad (1989), Jakobsen and Veiga (2011), and Barbosa et al. (2011). In the case of the auto industry and its geographic dispersion away from the State of São Paulo since the 1990s, these issues are analyzed by Anner (2011, Chapters 5–6). 10. The others were Moto Honda (motorcycles), Parmalat (dairy products), Nestlé (food and dairy), and Vicunha (textiles). Barbosa et al. (2011, 87). 11. The seven cities (some with multiple stores) known to lack CUT affiliation were the city of Rio de Janeiro, Curitiba (state of Parana), Contagem (state of Minas Gerais), and, in the state of São Paulo, the city of São Paulo, Santo André, Bauru, and São Caetano do Sul. See CONTRACS (2002). 12. Based on authors’ calculations from data in IBGE (2003, 164). 13. Using their own calculations based on microdata from the national household survey PNAD, Cardoso and Lage (2008, 48) report union density among wage earners or assalariados (which is a subset of the economically active population and employed economically active population that would presumably exclude, for instance, those who earn a salary rather

3

14.

15. 16. 17.

18.

19. 20.

21.

22.

23.

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than wages or are self-employee) at 21.9 percent in 1988, falling to 21.6 percent in 1995 and 17.7 percent in 1999, and rising to 20.1 percent in 2002. CONTRACS, “CONTRACS: Uma História em Construção,” September 26, 2002, https://web.archive.org/web/20020926233011/http:// www.contracs.org.br/. Accessed October 2, 2020. See for instance L.M. Rodrigues and A.M. Cardoso (1990) and I.J. Rodrigues (1997). See L.M. Rodrigues and A.M. Cardoso (2009) and Duarte (1998). Fundação Getúlio Vargas, CPDOC, “União Geral dos Trabalhadores (UGT),” n.d., http://www.fgv.br/Cpdoc/Acervo/dicionarios/verbetetematico/uniao-geral-dos-trabalhadores-ugt. Accessed September 23, 2020. Under the two Cardoso administrations, legislation from 2006 that would have enabled tribunals to fine unions engaged in “abusive” strikes never passed; from 1998 that would have amended the Constitution to end the union tax funding unions, the principle of one union per branch per municipality (unicidade syndical) was later withdrawn; and from 2001 that would have allowed negotiated contract provisions to weaken legal guarantees regarding conditions of work and benefits passed the lower house in 2011 but never passed in the Senate. Cook (2007, 91–92). “Walmart Cheer da Grande Viana,” Youtube, https://www.youtube. com/watch?reload=9&v=cIWfDmc22RU. Accessed March 20, 2019. Walmart Brasil, August 8, 2011, https://web.archive.org/web/200108 08093351/http://www.walmartbrasil.com/wmbrazil/wmstores/Hom ePage.jsp. Accessed March 27, 2019. While the 1988 Constitution set the maximum workweek at 48 hours (lowered from the previous 44), the CLT also established a requirement that all hours beyond the legal minimum must be paid at a 50 percent premium, and also that no more than two hours extra could be worked per day. Sindicato de Empregados no Comércio de Baurú, Convenção Coletiva de Trabalho, 2002/2004, November 22, 2002, https://web.archive.org/ web/20041226092945/http://www.secbau.com.br/convencoes.htm# CONVEN%C3%87%C3%83O%20COLETIVA%20DE%20TRABALHO% 20COM%C3%89RCIO%20%202002/2004. Accessed March 30, 2019. An estimated 12 million workers from the CUT, Força Sindical, and CGT participated in a one-day national shutdown protesting unemployment, wage policies, and labor market reforms that would take away legal rights and calling for better pension coverage and agrarian reform. An estimated half of commerce was shuttered in the city of São Paulo, 85 percent in the interior city of Sorocaba and 60 percent in Porto Alegre

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24. 25.

26.

27.

in the south and Rio de Janeiro city in the southeast. See DIEESE, “Balanço das Greves: 2006,” 2007, dieese.com.br. Accessed September 23, 2020; and Fernando Rodrigues, “Greve Geral,” Folha de São Paulo, June 25, 1996, https://www1.folha.uol.com.br/fsp/1996/6/25/opiniao/5. html. Accessed September 23, 2020. Data are cited in da Silva and Reis (2018, 11). According to Cardoso and Lage (2008, 109–110), initial interpretations by labor courts of the 1988 constitution took a narrow view of the rights of individual workers to be represented by their unions in individual claims, limiting it to issues having to do with enforcement of collective bargaining norms or those having to do with health and safety. The Superior Labor Court reinforced these interpretations in a 1993 decision, which was to remain in force until 2003. In addition, a 1999 law (Law 24) got rid of the tipartite system of business- and union-appointed “class judges” who worked alongside career lay judges; a 2000 law (Law 9.957) created the small claims “expedited procedure” (procedimento sumaríssimo) by which all claims for up to 40 times the minimum wage had to be settled or judged at the lowest (municipal or vara) court level without recourse to the two higher levels; and another 2000 law (9.958) introduced prior conciliation commissions under which unions and employers could create joint private bodies at various levels to reach settlements. The latter proved subject to abuses such as illegally charging workers for this conciliation mechanism and creating the false impression that they were bound to give up their legal claims if not pleased with the outcome. Cardoso and Lage (2008, 106–109). UNI Global Union, “Wal-Mart in Germany Is Not Doing Well: European Commerce Workers Don’t Want to Be Low-paid Cheerleaders, Unions Say,” March 10, 2000, https://web.archive.org/web/200212 17224205/http://www.union-network.org/unisite/sectors/commerce/ uni%20commerce%20website/multinationals/Wal-Mart_not_doing_ well_in_Germany.htm, March 7, 2000. Accessed March 30, 2019. On the court rulings against the ethics code, see “Germany Upholds Rights of Wal-Mart Staff,” Financial Times, June 15, 2005, https://www.ft.com/content/4d85393c-ddd6-11d9-a42f-00000e 2511c8. Accessed March 28, 2019; and Ingebjörg Darsow, “Implementation of Ethics Codes in Germany: The Wal-Mart Case,” IUSLabor 3/2005, https://www.upf.edu/documents/3885005/3888709/Darsow Germany.pdf/17405cfa-0f4e-494f-8839-d2252be6123b. Accessed March 28, 2019.

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Fernie, John, and Stephen J. Arnold. 2002. “Wal-Mart in Europe: Prospects for Germany, the U.K. and France.” International Journal of Retail & Distribution Management 30 (2/3): 92–102. Gazeta Mercantil. 1996. “WalMart May Have Lost US$ 40 Million in Price Gamble.” March 15. Govindarajan, Vijay, and Anil K. Gupta. 1999. “Taking Walmart Global: Lessons from Retailing’s Giant.” Strategy + Business, 4th quarter 17 (4th quarter): 14–25. Heitmann, Francisco Carlos Távora. 2002. “Centro de Distribuição como Fator de Vantagem Comparativa através de um Estudo de Caso.” Master’s thesis, Universidade Estácio Sá. Rio de Janeiro. Hugill, Peter J. 2006. “The Geostrategy of Global Business: Wal-Mart and Its Historical Forbears.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 3–14. London and New York: Routledge. Instituto Brasileiro de Geografia e Estatística (IBGE). 2003. “Sindicatos: Indicadores Sociais, 2001.” Rio de Janeiro. Instituto Observatório Social (IOS). 2000. “Relatório Geral da Observação WalMart Brasil Ltda.” Florianópolis, Brazil. International Centre for Management Research (ICMR). 2009. Carrefour’s Foray in Brazil. The Case Centre, #309–189–1, India: Hyderabad. Jakobsen, Kjeld Aaagard, and João Paulo Cândia Veiga. 2011. “The Orange and Yellow-Green Partnership: The FNV and CUT Partnership.” São Paulo: Central Única dos Trabalhadores. Landler, Mark, and Michael Barbaro. 2006. “Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture.” New York Times, August 2. https://www.nyt imes.com/2006/08/02/business/worldbusiness/02walmart.html. Accessed November 23, 2018. Lemos, Patricia da Rocha. 2015. “Gestão e condições de trabalho no Walmart Brasil.” Paper Presented to the Seminário Nacional Sociologia e Política. Universidade Federal do Paraná, Curitiba. Lichtenstein, Nelson, ed. 2006. Walmart: The Face of 21st Century Capitalism. New York: New Press. Lima, Danile. 2006. “Retorno do trabalho aos domingos: voltando ao século passado.” Nova Democracia 28: 539. https://anovademocracia.com.br/ no-28/539-retorno-do-trabalho-aos-domingos-voltando-ao-seculo-passado. Accessed October 12, 2018. Magalhães, Maria Lúcia Cardoso de. 2007. “Um novo olhar sobre o TTP: trabalho a TempoParcial.” Revista do Tribunal Regional do Trabalho da 3ª Região. Belo Horizonte, Minas Gerais 46:76 (July–August): 247–257. Martinez, Christiane. 2002. “WalMart to Inaugurate 5 Stores in Brazil this Year.” Gazeta Mercantil, July 31.

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Minadeo, Roberto. 2008. “Varejo Alimentar: Uma Análise das Inovações no Carrefour e Wal-Mart.” Paper Presented to the XXV Simpósio de Gestão da Inovação Tecnológica. Brasília, October. Petrovic, Misha, and Gary G. Hamlton. 2006. “Making Global Markets: WalMart and Its Suppliers.” In Walmart: The Face of 21st Century Capitalism, edited by Nelson Lichtenstein, 107–141. New York: New Press. Reardon, Thomas, and Ashok Gulati. 2009. “The Supermarket Revolution in Developing Countries.” International Food Policy Research Institute, Policy Brief #2. Rodrigues, Iram Jácome. 1997. Sindicalismo e Política: A Trajetória da CUT . São Paulo: Scritta. Rodrigues, Leôncio Martins, and Adalberto Moreira Cardoso. 1990. CUT: Os Militantes e a Ideologia. São Paulo: Paz eTerra. Rodrigues, Leôncio Martins, and Adalberto Moreira Cardoso. 2009. Força Sindical: Uma Análise Sôcio-Política. Rio de Janeiro: Centro Edelstein de Pesquisas Sociais. ———. 2009. Força Sindical: Uma Análise Sôcio-Política. Rio de Janeiro: Centro Edelstein de Pesquisas Sociais. Rosen, Ellen. 2006. “Wal-Mart: The New Retail Colossus.” In Wal Mart- World: The World’s Biggest Corporation in the Global Econom, edited by Stanley D. Brunn, 91–96. London and New York: Routledge. Sainato, Michael. 2019. “Walmart Facing Gender Discrimination Lawsuitsfrom Female Employees.” The Guardian, Febuary 18. https://www.theguardian. com/us-news/2019/feb/18/walmart-gender-discrimination-supreme-court. Accessed March 26, 2019. Sang-Hun, Choe. 2006. “Walmart Selling Stores and Leaving South Korea.” New York Times, May 23. Accessed November 28, 2019. Seckler, Valerie. 2000. “Global Battle.” Supermarket News, May 22. United Nations Conference on Trade and Development (UNCTAD). 2000. World Investment Report 2000: Cross-Border Mergers and Acquisitions and Development: Report. New York and Geneva: United Nations. ———. 2007. The Universe of the Largest Transnational Corporations: Report. New York and Geneva: United Nations. Valor Econômico. 2001. “Wal-Mart Dá Duro para Ser Global.” August 29. http://www.valor.com.br/arquivo/1000024319/wal-mart-da-duro-para-serglobal. Accessed August 1, 2019. Walmart. 2005. “Financial Information.” Wal-Mart. 1998. “Annual Report, 1997.” http://www.annualreports.com/Hos tedData/AnnualReportArchive/w/NYSE_WMT_1997.pdf. Accessed March 27, 2019.

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———. 2001. “Annual Report 2000.” http://www.annualreports.com/Hosted Data/AnnualReportArchive/w/NYSE_WMT_2000.pdf. Accessed March 27, 2019. Walton, Sam, and John Huey. 1993. Made in America. Rio de Janeiro: Campus. Wetterblad, Torsten. 1989. “Swedish Companies in Brazil: A Comparative Study of the Industrial Relations Policy of Swedish, Other Multinational and Domesic Companies in Brazil (Final Report).” AIC-International Centre of the Swedish Labour Movement, Stockholm. Women’s Wear Daily. 1998. “Wal-Mart Builds on Four Continents,” January 20. Comisión Económica para América Latina y el Caribe (CEPAL). 1999. “Pobreza y Distribución del Ingreso en Brasil en la Década de los Noventa.” Santiago, Chile. December.

CHAPTER 4

Expansion, Conflictual Cooperation, and Rising Legal Scrutiny: 2003–2014

Abstract With the rapid expansion of Walmart’s store network in Brazil amidst enlargement of its global footprint, episodic conflictual cooperation entailing occasional high-level negotiations and consultations over results sharing and workplace issues intermingled with protest and collective action as well as legal claims-making by unions and workers. Rising labor contestation is attributed to agency by union and state regulatory actors within the context of gradual changes in Brazil’s labor rules and norms, some of which they shaped through their own creative interpretation and appropriation. The company’s recalcitrance in altering the repressive familial workplace regime at the core of self-styled “Walmart culture” motivated numerous successful lawsuits by labor prosecutors and individual worker damage claims, leading to considerable costs beginning to hurt Walmart Brazil’s profitability. Keywords Repressive familial workplace regime · Conflictual labor-management cooperation · Results and profit sharing · Collective bargaining · Corporatist labor relations system · Legal claims-making

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_4

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This chapter considers the 2003–2014 period. In seemingly contradictory fashion, national consultations and negotiations across Walmart’s expanding network of stores in Brazil formally around results and profit sharing (PLR) emerge at times while the company’s continuous workplace abuses undergo increasing scrutiny and legal challenges at the hands of more active and worker-accessible official labor regulatory and legal bodies. The broader context is provided by a brief discussion of the company’s increasingly fierce competition for market share in Brazil with its two larger rivals, as well as its regional expansion through acquisitions of two large supermarket chains owned by international competitors and new store construction. The chapter identifies an intriguing pattern of “conflictual cooperation” in labor–management relations at Walmart Brazil in the form of a localized and at times national process of negotiations, in particular over PLR and also entailing consultation over issues of working conditions and employment. This pattern was parallel to traditional wage-focused collective bargaining at the local municipal level; the latter is conducted on a multiemployer basis for retail firms within encompassing labor and business sindicatos in the commerce sector, organized at the municipal level or joining together adjacent municipalities. In a favorable context in terms of the macroeconomy, labor markets, and government wage policy, some real gains were made by unions in wage bargaining as well as increases in compensation through PLR programs. The latter increases in compensation in some cases reflected encompassing labor–management accords and union influence over the terms. Yet the positive remuneration impact was blunted by continued high turnover, including high voluntary quit rates amidst work that was intensive, sometimes well beyond the legal workweek limits, and marred by health and safety problems. In short, it is a period of real if limited material gains achieved through union pressure and amidst a tight labor market. Yet it is also a period with little progress in terms of improving the precarious nature of work, with high levels of flexibility on company terms. Overall continuity in practices of everyday human resource management (HRM) is highlighted, centered on fundamental continuity with the global Walmart model of repressive familialism and anti-unionism. Even as unions occasionally got the firm to the bargaining table over PLR in the form of the national human resources (HR)

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managers and put non-wage workplace issues on the agenda, managerial abuses at the store level including anti-union measures continued and even worsened. Even a conflictual brand of cooperation, mixing negotiations with conflicts and collective action to pressure the company as well as union mounting of or assistance with various legal challenges, was a surprising development. The surprise comes in part from the firm’s previous years in Brazil and anti-union practices in a number of overseas markets as well as at home. But it also was counterintuitive because efforts by the same commercial-sector unionists—in some instances with overseas assistance through transnational labor networks—to engage and pressure Carrefour were unsuccessful in eliciting national negotiated accords with that French firm (until the 2015–2018 time frame, discussed in Chapter 6, and even there still fragmented by confederal affiliation). We situate this difference within contrasting broader paths that made Carrefour’s LR/HRM posture distinct in both the Brazilian and broader overseas contexts as well as within its much longer and earlier experience in Brazil, predating Walmart’s entry (Durand and Wrigley 2009). These occasional crosscompany glimpses, which also bring in market leader Grupo Pão de Açúcar (GPA), also include an analysis of high-profile lawsuits against Walmart and its chief rivals in Brazil as well as a comparison of infractions issued by labor inspectors. In the end, the companies’ treatment of workers represented “variations on a broader theme” (our term) of precarious, low-wage, high-turnover supermarket work (“bad jobs” in Carré and Tilly’s [2017] parlance). Yet at the same time, there were important differences in how the respective firms dealt with and institutionalized conflict management, the sort of workplace culture they tried to inculcate and resistance it generated, and the nature of the workplace violations identified and ruled upon in legal cases. We argue that because of its distinctive repressive familial workplace regime, in many ways jobs at Walmart were, indeed, “worse” than the already bad jobs that were the industry norm—more subject to abusive supervisor behavior and aggressive bodily searches ostensibly to detect theft of merchandise, and more humiliating and disrespectful to workers who found objectionable the Walmart cheer (which had no counterpart at the other companies). In this sense, our findings, by bringing in the labor process and what is revealed about it in legal proceedings as well as in union compliants and denunciations of its behavior, contrast with those of Carré and Tilly (2017, 172–193) in their comparative chapter on

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Walmart’s labor relations around the world, which includes Brazil. These influential authors from global retail work studies argue that the company is no worse and sometimes better than competitors on wages and benefits, extrapolating that finding problematically to “labor standards” as a whole; they also do so on an empirical base that does not touch upon everyday relations at the store level or (as discussed further in Chapter 6) draw upon in-depth empirical analysis of workplace relations and conflicts not encapsulated within a strictly economistic focus. In short, our perspective sheds light on power dynamics in terms of the control that the firm seeks to exercise on how workers behave and interact that goes well beyond standard employer practice. It also reveals what sort of conflict this dynamic generates where creative agents can leverage evolving labor institutional norms to try to push back against the company. In a country where national firm-level bargaining of any type is rare and faces institutional hurdles and also where collective bargaining tends to be formalistic, localized, and constrained in its agenda, we attribute the rise of conflictual cooperation at Walmart Brazil to the interplay of two elements: first, the strategic, innovative capacity of networked unionists (seen as a form of associational power) and, second, Walmart Brazil’s evident newfound desire from the early 2000s to manage the uncertainties of expansion and present itself as a more cooperative, ethical “Brazilianized” entity. The latter development occurred in a context where corporate social responsibility (CSR) initiatives were much in evidence in the country by large Brazilian and multinational firms in general and Walmart sought to insert itself within this trend (Haslam 2004). It also occurred when the company was under growing pressure at home regarding its labor practices, community relations, treatment of female workers in particular, and labor standards in its global supply chain. Yet at the same time, the chapter notes, unions were unable to get strong traction on abusive workplace practices, even as such issues were sometimes the subject of consultations in the context of PLR negotiations. As a result, they had to resort to strikes and protests as well as legal claims-making. The chapter reviews the key context of ongoing struggles and gradual institutional change within Brazil’s evolving hybrid corporatist-pluralist system of labor relations. This evolution took place in the wake of the country’s democratization and labor rights enshrined in the new constitution in 1988 and subsequent flexible reforms of the mid to late 1990s, discussed in Chapter 2. In complex, contradictory fashion, formal-legal

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reforms both disappointed while also making it possible to break new ground. On one hand, they disappointed advocates of deeper, more fundamental reforms long sought by progressive unions—in particular, the sorely lacking right to statutory workplace representation that would give unions a presence in sectors such as supermarkets and commerce. On the other hand, reforms increased to a certain extent the strength and representativeness of the labor movement, particularly national labor centers (centrais sindicais ) and national-sectoral confederations and state sectoral federations organized by broad economic branch and affiliated with the respective centers. Of equal consequence was a wage policy that promoted collective bargaining and real wage gains, and what an International Labor Organization (ILO) study characterized as an “income-led” approach to the 2008–2009 global financial crisis followed by the Lula government (Berg and Tobin 2011). This context of somewhat expanded space helped unions modestly increase their associational power while cushioning their lack of structural power. Within it, the chapter explores the capacity of commercial workers unions, for brief periods and working across rival labor centers, to take actions to confront and engage the U.S. firm. These actions involved taking a firm line in collective bargaining, and “re-purposing” ostensibly innocuous reforms such as a national law on profit-sharing to embark with the company on national negotiations touching on compensation and “social dialogue” regarding workplace issues. Against the backdrop of additional incremental changes within institutions of labor justice—labor courts, labor inspectors, and labor prosecutors—we analyze the heightened regulatory scrutiny and challenges (some with tangible financial costs in terms of fines and legal representation) that the retailer (and in different ways its chief competitors) faced. Walmart encountered these challenges in part because it stubbornly clung to a model of treating and managing workers that led to constant workplace uncertainty and hardship for them even in boom times. The structure of the chapter is as follows: (1) discussion of Wal-Mart’s expansion and strategy in the broader context of the supermarket sector in Brazil, the country’s economic boom, and the firm’s global strategy; (2) an overview of our perspective on agency within thickening, evolving labor institutions; (3) a summary and analysis of “conflictual cooperation” focusing on wage bargaining, PLR negotiations, and direct labor–mangement relations; (4) an analysis of legal claims against Walmart in light of those against its competitors and national trends in the activities and

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accessibility of labor justice institutions; (5) a discussion of Walmart’s evolving patterns of work flexibility and workplace conflict and control as revealed by these claims as well as data on turnover and workforce demographics in the company and the broader commercial sector; and (6) a summary of our argument.

Booming National Economy and Evolving Firm Strategy Walmart’s evolving position in the Brazilian market needs to be situated, first, within the context of a booming economy whose dynamic growth was only detained briefly by the global recession that began in 2008—with only two quarters of contraction. The national economy under governments from the Workers’ Party (PT), beginning in 2003, was buoyed by agro-mineral exports related to the “commodity boom,” monetary stability, and later by fiscal stimulus and “income-led” responses to potential external shocks; also playing a demand-stimulus role were policies that promoted consumer access to credit and, of direct importance to job creation and space for wage gains, a booming retail sector (Berg and Tobin 2011). The 2003–2014 economic period in Brazil can be characterized as a time of growth, poverty reduction, and reduction in informality, with formal employment creation and a quick rebound from the brief 2008 downturn. These macro-social trends reflected not just economic growth and the consumer- and internal-market-led model but also robust social policy expansion (Arbix and Martin 2011). The latter included cash transfer policies such as the Bolsa Família conditional cash transfer program and expansion of various non-contributory pension programs for the urban and rural poor (Garay 2016, 120–164; Soares et al. 2010). Extreme poverty as well as income inequality, as measured by the GINI coefficient, fell significantly.1 With formal job creation brisk and specific programs to encourage micro and small enterprises to register and efforts by inspectors to detect and correct unregistered wage labor, formalization increased substantially. The share of all those officially “employed” who were in the informal economy declined steadily from about 54 percent in 2002 to about 39 percent in 2012, based on calculations of national household survey data elaborated by the Instituto de Pesquisa Económica Aplicada (IPEA) government research institute made by Alejo

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et al. (2015, 139). Moreover, there was a reversal of previous stagnation in the purchasing power of the minimum wage, on the basis of which wages are expressed in wage bargaining and settlements typically as multiples like “twice the minimum wage” or “1.5 times the minimum wage.” As a result, real increases in minimum wages (which registered a 90.3 percent growth from 2003 to 2012) also boosted incomes in disadvantaged groups at the bottom of the wage pyramid, such as women, workers of color, and youths (Berg and Tobin 2011; Alejo et al. 2015). In de facto terms, this incomes policy lifted the wage floor for formalsector workers including workers at Walmart and other commercial and supermarket firms in terms of their collective bargaining position. It is also important, second, to situate the firm’s Brazil operations within its evolving global strategy. Compared to global expansion, Walmart paid at least equal attention to confronting new challenges at home (such as e-commerce and difficulties in expanding to new types of more urban locations and developing new, smaller, and more urbanfriendly store formats). Yet international sales as a share of total corporate sales continued to inch upward, from 24.2 percent in 2008, to 26.1 percent in 2011 and 28.9 percent in 2014.2 Walmart’s expansion strategy in Brazil (detailed in Fig. 4.1) was both opportunistic and aggressive. In 2004–2005, the firm took advantage of chances to expand geographically through acquisitions that became available based on the misfortunes or market exit moves of competitors. These decisions enabled it to expand into the country’s Northeast and South. From around 2006, it also made a big push to construct new stores. As a 2016 news story notes, “[i]n a six-year stretch through the fiscal year ending January 2013, Wal-Mart doubled its locations, reaching nearly 560 at its peak.3 Overall, the company evolved from its initial southeastern focus toward more of an emphasis on the country’s Northeast (the country’s fastest growing but second poorest region during this period) and especially the South. The desire to centralize operations and also the focus in particular on the southern state of Rio Grande do Sul were illustrated by the move—amidst R$100 million in new investments in the state—to open as of June 2010 a new Shared Services Center in the state capital of Porto Alegre; the Center took over all finance, legal affairs, and HRM nationwide, and entailed the transfer of the respective departments there from the company headquarters in the city of São Paulo.4 In that year, nearly a quarter (102 of 439) of the company’s Brazilian stores were in the southern state of Rio Grande do Sul alone. While the desire for a

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Fig. 4.1 Expansion and distribution of stores by type at Walmart Brazil, 2003– 2015 (Source Compiled by the authors from Walmart, Annual Reports, 2003– 2006, and Walmart Brazil, Relatório de Sustentabilidade, 2007–2015)

national presence and for centralization of its expanding Brazilian network was apparent, nonetheless at its peak in 2013 the company still only was present in 19 of Brazil’s 26 states and the Federal District (Walmart Brasil 2014). This stood in contrast to the nationwide presence in all 26 states plus the Federal District characteristic of Carrefour for most of the current century, as well as the nationwide footprint of GPA. By 2004 Walmart increased its market share to third, from sixth in the previous period. However, with the exception of the year 2006 when it briefly moved into second position, the company was never able to displace market leaders GPA and Carrefour in terms of total sales (see Fig. 4.2). The firm’s faltering profitability from the mid- to late-2000s onward despite its aggressive expansions and its sales nearly doubling over the 2006–2013 timeframe (the reasons for which will be discussed in detail in Chapter 6) were familiar to close industry observers but not

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Fig. 4.2 Walmart and chief competitors’ revenues, 2003–2014 (Source Compiled by the authors from Brazilian Association of Supermarkets-ABRAS, abras.com.br, various years. All figures in Brazilian Reais [R$])

widely publicized at the time in Brazil. Walmart’s Brazil subsidiary did not report country-specific profits and losses and the company was not publicly traded in Brazil, which would have required such disclosure. Our research finds that Walmart exhibited over this period a curious admixture of (1) initiatives indicative of localization or adaptation efforts with (2) many core policies and practices that demonstrated close adherence to home-country principles as well as (3) in some cases alignments with innovations being tested out in home-country operations. Some aspects of its evolving LR/HRM and CSR posture, discussed below, fit into the former category. Meanwhile, the company’s continued strong emphasis on larger formats such as Supercenters and Sam’s Clubs, noted above, mirrored the company’s historical trends in the U.S. market. The relative lateness and weakness of its adoption of smaller formats resonated with the company’s problematic experience with such formats in the United States, where it ended up having to shelve its Walmart Express format by 2016, for instance.

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As far as supply chain management, the company tenaciously stuck to its goal of achieving steady, permanent pricing, a formula which it has called “everyday low prices” (EDLP) since the 1990s and unsuccessfully tried to trademark in the United States in 2006–2007.5 It sought to do so by overcoming the problems noted in Chapter 3 and steadily attempting to transform its information-technology-based orders and delivery schedules, logistics connecting suppliers to distribution centers to stores, pricing practices, and other aspects of relations with Brazilian suppliers. The fact that Walmart only fully implemented the system in 20116 —16 years after opening its first store in Brazil—is testimony to the difficulties the firm faced in these regards; by contrast, it took only four years (from market entry with its first controlling stake in 1995 to 1999) to implement EDLP in Mexico from its quickly established dominant market position there.7 At the same time, part of the resistance faced by the model had to do with Brazilian consumers’ continued adherence to practices of shopping around for the best prices, even if this meant multiple purchasing trips—habits better suited to the more traditional “high-low” discounting model of its competitors.8 By contrast, the EDLP model assumes large, single-visit purchases in which consumers realize overall savings even if some individual items are priced higher than at competitors. With regard to Walmart Brazil’s action and relations with communities, the environment, small suppliers, and other “stakeholders,” the subsidiary’s growing activities and discourse regarding CSR (corporate social responsibility)—and their limits and omissions—mirrored trends in the home office and global priorities set by Bentonville and reflected in operations elsewhere in the world (Vandenbergh 2007). Yet, arguably, the company was also influenced by the fact that important segments of the big business community in Brazil of multinationals, state-ownedenterprises (SOEs), and private domestic companies (many of them former SOEs) had been pushed by considerable pressure from civil society and NGOs to embrace a discourse and initiatives around CSR by the early to mid-2000s9 ; this embrace included issuing annual sustainability reports, which Walmart Brazil, as a late adopter among peers in Brazil, started issuing in 2007. In the United States, the firm since the early 2000s had adopted “green” initiatives at its stores and regarding its supply chain regarding issues such as energy use, emissions, and plastic bag recycling and with respect to its supply chain. Yet notably Walmart has tended

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to prefer unilateral, in-house programs (like its global supplier code of conduct) or self-proclaimed “business driven” initiatives by groups of commonly situated firms (like the Global Social Compliance Initiative founded in 2006 with fellow large supermarket and buying firms within global value chains)10 to multi-stakeholder initiatives including non-business actors that might open it up to external monitoring. Walmart Brazil’s annual sustainability reports from 2008 (covering the 2007 fiscal year) onward followed the format for CSR self-reporting widely adopted by corporations called the Global Reporting Initiative (hereafter cited individually by year as “Walmart Relatório”). Among the company’s self-touted initiatives from the mid-2000s onward was the formation and operation of a “Producer’s Club” (Clube dos Produtores ), by which the company began to source fresh perishable products such as fruits, vegetables, and dairy directly from small- and mediumsized farmers and in some cases facilitated by NGO partnerships. While studies of effectiveness are lacking, the firm has not faced the same degree of scrutiny or criticism in terms of impacts on small farmers in Brazil as has been a controversial issue in some other countries where it operates, such as South Africa (Greenberg 2018) and Mexico (Biles 2006). Environmental concerns (combating deforestation with its impacts on carbon emissions) and the business risks posed by forced labor and deforestation in the beef supply chain motivated Walmart to develop its own in-house beef brand that was certified as sustainable. More strictly environmental motives (dovetailing with cost savings) lay behind such initiatives as installing LED lighting in stores and improving fuel economy in logistics. Social development initiatives at the community level were also pursued through the Instituto Walmart, the company’s philanthropic arm (Walmart, Relatorio, 2011). The upshot of this discussion in terms of LR/HRM is that some of the company’s occasional nods toward an engagement posture with unions—though not altering repressive familial workplace practices and still co-existing uneasily with anti-union measures at the store level—is best situated within the context of greater concern by Walmart Brazil (and to some extent Walmart global parent) with risk and reputation management regarding the firm’s socio-environmental impacts. Let us now turn our attention on shifting Brazilian institutions specifically to the labor realm.

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Embedded Agency Amidst Thickening Labor Institutions Through a series of mostly independent developments best viewed within the GIC paradigm elaborated in Chapter 2, Brazilian labor institutions were becoming “thicker” and more dense in ways that agents—unionists, workers, judges, inspectors, and prosecutors—took advantage of in dealing with firms such as Walmart. Indeed, this agency is part and parcel of the institutional changes themselves, as actors pushed the boundaries of new laws and re-invented or re-interpreted rules from within and without. Although it is tempting to attribute these developments simply to a pro-labor, left-of-center government, in fact comprehensive reform was notably lacking despite initial promises. Some of the key changes stemmed in part from reactions to regulations that predated the Lula government or from ongoing processes of regulatory professionalization, acquisition of greater independence, and greater activism that began prior to the PT entering power, while also deepening under PT governments (2003–2016). Although the general direction of change was toward greater scrutiny of employers and recourse for workers, this was by no means uniform, was always contested by employers including Walmart and resisted by Walmart in its practices, and began to show some sense of strain or limitations by the end of this period; what ensued was outright crisis and retrenchment of rights in the post-2015 period discussed in Chapter 6. Opportunities for unions to denounce abuses or try to use the profit-sharing law and its more recent implementing legislation from 2000 (under the centerright Cardoso government) to achieve greater leverage over compensation levels and pursue additional ends were taken up to differing extents and in different ways depending on the orientations of unions and their national labor center affiliation. Yet, the very vibrancy of the informal, unwritten character of many of these changes promoted through creative agency was in many ways also their Achilles heel—they allowed for only partial and ultimately difficult-to-sustain advances. Moreover, the downsides of the absence of more fundamental, comprehensive reform like that sought by the Fórum Nacional do Trabalho (FNT) tripartite initiative early in the first Lula administration would mostly only become evident in hindsight—particularly at Walmart and in the supermarket sector in

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the form of the failure of proposals to create legally mandated workplace representation. More organized labor movement sectors in manufacturing, banking, and the public sector—with greater structural power resources related to greater occupational skills from which to enhance their associational power—had developed forms of workplace representation linked to unions in struggles to build a presence at the point of production dating back to the 1980s and on through the 1990s and 2000s. Management often agreed to recognize the resultant works councils or other entities despite their lack of juridical status. Commercial workers’ unions lacked the resources to force employers to do likewise and were thus dependent on legislative mandates that might have given them such an institutional beachhead. At most, these unions have a single or couple union officials (delegados ) in any given Walmart or other supermarket site who enjoy legal rights not to be dismissed during their period of office, a key prerequisite for effective shopfloor organizing. The efforts to interrupt representational activities by union officials in the workplace continued in this period. Worker representation in the workplace was an area in which employers had resisted union proposals in the FNT, and where there was no consensus in the tripartite reform proposals that ultimately were allowed to languish in Congress without a push from the executive for action. Table 4.3 summarizes developments in key spheres that had a bearing on actions and patterns of interaction regarding Walmart and other supermarkets. In the first section of that table and below, we highlight evolving institutions of labor relations and the unfolding of conflictual cooperation between unions and Walmart management around wage and resultsand profit-sharing (PLR) within them. The following section of the table reviews shifting national institutions of labor justice, and discusses how legal claims and challenges to Walmart began to mount within this mostly expanding space.

Change and Continuity in Labor Relations Institutions Walmart, unions representing its workers, and state agents in the judicial and regulatory realms interacted within piecemeal, uneven, ongoing shifts in institutions of labor regulation. While the general direction of change was toward a more labor-friendly environment, these trends were

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not uniform and it is easy to overstate their extent in terms of the still highly structurally unequal playing field favoring firms, especially in the retail sector. Positive regulatory and legal developments for advancing the defense of workers comingled uneasily with the flexible labor market reforms that were partially implemented by the Cardoso government (discussed in Chapter 3). These flexible reforms continued to shape employment practices and relations, as did remnants of state corporatist institutions that persisted from the half century before the 1988 constitution. Put differently, the chapter underlines that if there was a pendular swing from “rights” in the 1998 Constitution toward “flexibility” in the 1995–2002 time frame, there was by no means any unequivocal reversal back toward “rights”—as one might reflexively assume with a pro-labor government led by a former trade unionist in power. Labor market and competitive structures, as well as the stickiness of some underlying labor institutions in the realms of union organization and collective bargaining stemming from Brazil’s corporatist legacy, mitigated against any seamless advance of worker rights and protection in the PT years in power. The dashing of more fundamental reform aspirations is important to underline as a defining characteristic of labor relations under PT governments (January 2003–December 2010 under Lula, and under Dilma Roussef, January 2011 till August 31, 2016 and her removal from office after impeachment). Greater de facto freedom of association and ability to strike and engage in direct collective bargaining were evident. As detailed in Table 4.1, a shift took place from 2008 toward recognition and funding through the union tax of national labor centers and sectoral affiliates independent from the state. However, these developments co-existed during this time period with formally corporatist unions still based on principles of monopoly of representation and compulsory financing and still lacking a legally mandated workplace presence; they also comingled with limiting, bureaucratic collective bargaining rules inherited from the past. A political obstacle, and reminder of the relatively low importance attached to “labor reform” issues, was the fact that the Labor Ministry was left in the hands of the PT’s centrist and conservative allies from other parties for the last three years and nine months of Lula’s two-term government and for the entire Dilma government; this reflected the political dealmaking by which the party kept a governing congressional majority in a fractious multiparty system. The following critically sympathetic portrait captures well the “glasshalf-full/glass-half-empty” perspective of many progressive labor scholars,

President Cardoso approves Law https://doi. org/10.001/2000, following approval by Congress, altering terms of 1994 regulations initially implementing the results and profit sharing (PLR in Portuguese) provisions of the 1988 Constitution*

Labor Relations and Collective Labor Rights Lula government signs Law 11.648/2008 granting legal recognition to national labor centers that meet representativeness criteria and giving them a share of the union tax

Change and date(s)

National labor centers must maintain up to date information on numbers of affiliated workers through their member unions. If meeting criteria, they are entitled to represent workers in various types of public councils and to receive 10 percent of the union tax collected on these workers, with 15 percent going to the respective sectoral federation affiliated to the central and 5 percent to the confederation. In order to meet the criteria, centrals must have at least the following: 100 unions distributed across all five regions of the country; at least 20 affiliated unions in three of those regions; affiliation of unions across at least five economic sectors; and affiliation by members that represent at least seven percent of the total unionized employees nationwide In order to meet PLR requirements and establish indexes of productivity, quality or profitability and an implementing plan of targets, results, and time frames, firms must either (1) set up a mixed commission made up of equal numbers of managers and workers and also including a union representative or (2) negotiate a legal agreement (acordo or convencão) with the union

Content

(continued)

Struggles over union presence and influence in PLR design and implementation increase substantially from around mid-2000s, including between Walmart and local unions, and post-2008 involving at times newly legally recognized federations and confederations

Reduction in the number and increase in the representativeness of centers, sectoral confederations, and state sectoral federations. Increased resource base and thus staffing and organizational capacity through access to union tax revenues

Impacts

Table 4.1 Selected gradual institutional changes in regulatory/legal sphere and impacts on key agents, 2003–2014* [printers: please format figure in landscape] 4 EXPANSION, CONFLICTUAL COOPERATION, AND RISING LEGAL …

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Content Changing the terms of the hours bank (providing that over the course of the year workers would be compensated for extra hours work with time off) is generally only advantageous to the firm. For this reason, alteration of the rules must be done through an accord or agreement with the union

All alterations of constitutional eight-hour workweek and 44-hour workweek (with minimum 50 percent overtime pay beyond that) must be approved in company-level accords or category-level collective bargains with unions. Collective bargaining contracts must also establish a wage floor. The Day of the Commercial Worker is officially added as an extra holiday on October 30th each year

Superior Labor Tribunal rules that alteration of the terms of the hours banks system can only take place through collective bargaining or firm-union agreements, not through individual worker agreements with companies (RR 961/2004–019-12–00.5, January 22, 2007)

Law regulating the “profession of commercial worker” is signed by Dilma government, based on original proposal by PT Senator Paulo Renato Paim and reforms sought by commercial workers’ unions (Law 12.790/2013 of March 15, 2013)

(continued)

Change and date(s)

Table 4.1

Firms were often dismissing workers who had worked additional hours without them getting paid the “saved hours” upon dismissal. Issues were settled in labor courts, where incomplete compensation was often the upshot. As a result, many unions were refusing to enter into any agreement regarding hours bank arrangements with employers, and pushing legislatively for the repeal of the hours bank law. The change reinforced their role as necessary legal party to the sanctioning of and any change in the hours bank system at any particular firm or workplace Efforts by employers to alter terms of hours bank flexible scheduling must legally be set through negotiations. However, enforcement is a contested issue that often ends up in labor courts, and law basically reinforces prior Supreme Labor Court rulings applicable economy-wide. Commercial Workers’ Day is treated as another holiday for hours bank and any overtime remuneration purposes

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ACPs with a regional impact must be judged in regional labor courts based in state capitals (rather than those based in regions) and those with a trans-regional scope must be judged in the Federal District labor court Establishes that in case of damages of regional scope under ACPs affecting municipalities subject to more than one lower level labor court, the jurisdiction will be whichever of the local courts the prosecutor chooses to file the suit. In cases of supra-regional or national scope of damages in an ACP suit, there is joint jurisdiction of the respective local labor courts

Alteration of OJ 130 of 2004 by Superior Labor Tribunal (TST) regarding legal scope of civil public actions (ACPs) brought by labor prosecutors (Resolution 186, September 25, 2012)

Scope of labor courts expanded from “employment relations” and individual labor law to “labor relations,” including compliance with collective bargaining contracts. Dominant share of Superior Labor Court justices now comes from lower labor courts (4 out of 5). National school for training of labor court judges created. New lower labor courts (varas ) created

Content

Ruling by Superior Labor Tribunal limits the territorial jurisdiction in which public civil actions (ACPs) filed by labor prosecutors against companies are adjudicated (Orientação Jurisprudencial 130/SBDI-II, 2004)

Labor Courts and Prosecutors Constitutional Amendment PEC 45/2004 adopted under Lula government (altering Judicial Reform, first introduced in 1991, under Cardoso government)

Change and date(s)

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(continued)

*Incentivized workers to file labor claims with greater frequency and issue scope *Labor judges strengthened in their professionalization, specialization, and autonomy *Number and geographical reach of labor courts resumes annual growth, particularly outside state capitals *Claims about a wide variety of issues (such as union representation, jurisdictional disputes, damages for occupational injuries) once handled by other types of courts now fall under jurisdiction of labor courts *Limits judicial settlement of collective bargaining disputes of economic nature (dissídio coletivo) to aspects where both parties are in agreement Obstacles placed to wider-ranging national-scope suits against larger firms that encompass issues and damages transcending state boundaries. ACPs on patterns of practice tend to focus on single states or, in a few cases, contiguous states Expands scope for multi-state civil public actions, some of which affect Walmart

Impacts

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Superior Labor Tribunal rules unions have the right to propose in court actions to enforce collectively negotiated labor norms from collective bargains (convenções coletivas do trabalho) and union agreements with individual firms (acordos coletivos ) (Precedent 286, Resolution 121/2003, November 19–21, 2003) Superior Labor Court revokes earlier Precedent (Enunciado da Súmula) 310, from April 1993, that denied the ability of unions to represent collective and homogeneous individual claims before labor courts, or “substituicao processual do sindicato” (October 2003) Labor Inspection Law 10.593 and implementing Decree 4.552, both of December 2002 (end of Cardoso government) place labor inspectors (re-named “auditores fiscais do trabalho”) directly under the national Labor Ministry* After reaching low point of 2837 in 2003 culminating a steady decline from 1996 (3464), number of labor inspectors begins steady expansion peaking in 2007–2008 (at 3172) and again in 2011 (at 3042). From 2011 a period of decline begins

Change and date(s)

Table 4.1

–

–

*Legislation declares it is pursuant to Brazil’s compliance with ILO Convention 81 on Inspection Systems, promulgated in Brazil since June 1957

Content

Inspectorate recovers some institutional capacity through latter part of decade only to begin losing it, as measured by the regularization rate of inspected enterprises (share of legal irregularities detected that were resolved) which drops notably after 2009. Both numbers of firms inspected and number of workers at inspected establishments peak in 2007 with steady fall thereafter. Inspectorate is increasingly “stretched thin” with increasing size of economy and formal workforce in second half of period

*Inspectors operate with greater autonomy and authority

Unions’ power to seek contract enforcement through courts is increased. Unions’ power to represent workers in claims before labor courts is augmented, contributing to an expansion of individual claims

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Content

Supplementary Law 110 of 2011 adds a 10 percent penalty paid to the federal government on the amount accumulated in the departing employee’s FGTS severance account

Law regulating the “profession of commercial worker” is signed by Dilma government, based on original proposal by PT Senator Paulo Renato Paim and reforms sought by commercial workers’ unions (Law 12.790/2013 of March 15, 2013) All alterations of constitutional eight-hour workweek and 44-hour workweek (with minimum 50 percent overtime pay beyond that) must be approved in company-level accords or category-level collective bargains with unions. Collective bargaining contracts must also establish a wage floor. The Day of the Commercial Worker is officially added as an extra holiday on October 30th each year –

Working Conditions and Individual Employment Rights New regulations for Sunday and holiday work Subject to municipal laws, Sunday work in (Law 11.603 of December 5, 2007) commerce remains permissible but through terms to be set in collective bargaining. Workers are guaranteed every third Sunday off (from every fourth previously). Holiday work is authorized, where municipal regulations permit, but only if established in the respective collective bargaining contract

Change and date(s)

(continued)

Since workers frequently have to work Sundays under the hours bank system, they are guaranteed that if they must work two Sundays off in a row (having off a different day of the week) that the following Sunday they have off. Unions’ right to negotiate the terms of Sunday work (as well as payment of overtime, the setting of the workday duration, and meal and transportation vouchers) is established. Union role in authorizing and regulating holiday work is strengthened Efforts by employers to alter terms of hours bank flexible scheduling must legally be set through negotiations. However, enforcement is contested issue that often ends up in labor courts, and law basically reinforces prior Supreme Labor Court rulings applicable economy-wide. Commercial Workers’ Day is treated as another holiday for hours bank and any overtime remuneration purposes Costs of dismissal increase slightly for employers

Impacts

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(continued) Content

–

Norms affect a key job category and source of repetitive motion injuries as well an expanding job category with retailers’ new e-commerce operations. Unions sensitize workers on norms, legal complaints rise, and enforcement of norms becomes focus of labor inspectors’ visits and in some cases investigations and suits by labor prosecutors

Impacts

*Occurs before period in question, though impacts on practice delayed till this period Sources General: Cardoso and Lage (2005), Cardoso and Gindin (2009) Labor Relations and Collective Labor Rights: Fernando Augusto Melo Colussi, “O papel das centrais sindicais no modelo sindical brasileiro,” Jusbrasil, n.d., https://fernandocolussi.jusbrasil.com.br/artigos/183903725/o-papel-das-centrais-sindicais-no-modelo-sindical-brasileiro. Accessed April 6, 2019; Ministério do Trabalho, “Central Sindical,” https://web.archive.org/web/20181108010028/http://trabalho.gov.br/central-sindical/. Accessed February 7, 2019; Conjur, “Banco de horas so pode ser instituido por accordo coletivo,” January 22, 2007, https://www.conjur.com.br/2007-jan22/banco_horas_instituido_acordo. Accessed April 25, 2019 Labor Courts and Prosecutors: TST (2012); DireitoNet, “Decisão histórica: TST revoga Enunciado 310 e garante ampliação do papel dos sindicatos em juízo,” September 26, 2003, https://www.direitonet.com.br/noticias/exibir/6123/Decisao-historica-TST-revoga-Enunciado-310-e-gar ante-ampliacao-do-papel-dos-sindicatos-em-juizo. Accessed February 5, 2019; Gomes and da Silva, 2018; Pedro Lenza, “Reforma do Judiciário. Emenda Constitucional nº 45/2004: Esquematização das principais novidades,” https://jus.com.br/artigos/6463/reforma-do-judiciario-emenda-con stitucional-n-45-2004. Accessed February 1, 2019; Granadiro Guimarães Advogados, “A Ação Civil Pública e a Competência Territorial das Varas do Trabalho,” December 2, 2016, http://www.granadeiro.adv.br/destaque/2016/12/02/a-acao-civil-publica-e-a-competencia-territorial-das-varas-do-tra balho. Accessed February 22, 2019; Mario Gonçalves Júnior, “O cancelamento do Enunciado 310 do TST,” October 13, 2003, https://www.mig alhas.com.br/dePeso/16,MI2848,61044-O+cancelamento+do+Enunciado+310+do+TST. Accessed April 3, 2019; Eliane Nassif, “A Ação Civil Pública e o MPT,” Ministério Público do Trabalho, Revista Labor, 1:1 (2013), 88–90; Presidência da República, Casa Civil, Subchefia para Assuntos Jurídicos, Lei 10.101, December 19, 2000, http://www.planalto.gov.br/ccivil_03/leis/L10101compilado.htm. Accessed February 9, 2019

Health and Safety Regulatory Norm 17 issued by the Labor Ministry establishes ergonomic standards for cashiers and checkout counters as well as for telemarketers and online and telephone customer service worker (Portaria SIT n.º 08/2007 and n.º 09/2007)

Change and date(s)

Table 4.1

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Labor Inspection: Alejo et al. (2015, 142); CONTRACS (2018) Health and Safety: CONTRACS, “Norma Reguladora para Trabalho dos Operadores de Checkout, Anexo I de NR 17,” http:// www.contracs.org.br/publicacao/21/cartilha-nr-17-anexo-1-trabalho-dos-operadores-de-checkout. Accessed February 27, 2019; COAD, Soluções Confiáveis, http://www.coad.com.br/busca/detalhe_16/1241/Sumulas_e_enunciados. Accessed February 5, 2019; Guia Trabalhista, NR 17—NORMA REGULAMENTADORA 17: ERGONOMIA, ANEXO I, TRABALHO DOS OPERADORES DE CHECKOUT Aprovado pela Portaria SIT n.º 08/2007, http://www.guiatrabalhista.com.br/legislacao/nr/nr17_anexoI.htm. Accessed February 27, 2019; Guia Trabalhista, NR 17—NORMA REGULAMENTADORA 17: ERGONOMIA, ANEXO II, TRABALHO EM TELEATENDIMENTO/TELEMARKETING (Aprovado pela Portaria SIT n.º 09/2007) Working Conditions and Individual Employment Rights: SenadoNoticias (2013); Sincopeças, “Nova regulamentação do trabalho aos domingos e feriados em lei Nº 11.603, de 5 de dezembro de 2007,” http://portaldaautopeca.com.br/nova-regulamentacao-do-trabalho-aos-domingos-e-feriados-lei-no-11603-de-5-de-dezembro-de-2007. Accessed April 3, 2019

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who had hoped for more fundamental breakthroughs in labor rights when Lula came to power. After noting “political… difficulty to implementing a left-wing programme,” the authors argue: By continuing to establish dialogue with social movements, the PT governments stimulated forms of social participation in developing public policies, reinforcing existing institutions and creating new ones. By using its institutional power, the CUT [Central Única dos Trabalhadores ] was able to strengthen its participation in public institutions. There were hardly any substantial debates on labour or employment conducted without the CUT’s participation. On the other hand, the privileged spaces in the labour arena did not achieve structural changes capable of redefining the country’s development model and the standard of work regulation. (Krein and Dias 2018, authors’ emphasis)

The public policy institutions in question, in which the CUT (along with other national labor centers albeit with less influence) participated, concerned training and labor market policies and definition and adjustment of the minimum wage, among other not unimportant public policies affecting worker welfare. For Rodrigues et al. (2008), under Lula’s first government, “executive initiatives were timid in labor relations….[with] isolated measures [which]….while important do not add up to a significant transformation of labor-capital relations in the country” (p. 56). Much the same could be said of the modest labor gains of the rest of the PT’s tenure in Brasília. As has often tended to be the case with changes in Brazil’s system of labor markets and relations in earlier periods, it was not comprehensive formal-legal reforms that carried the day. Indeed, the much-anticipated FNT that met monthly over the course of Lula’s first year-plus in office, 2003 into 2004, for over 3000 hours to hash out consensus proposals for the executive to submit to congress ended up having its work shelved—in a way that turned out to be permanent. The government was briefly in political crisis in its initial mid-term (municipal) elections, and concerned about passage of higher-priority legislation after those elections where the PT and its allies did not fare well (Krein and Dias 2018; Martin 2006). It proved to be difficult to generate consensus not just between employer organizations and labor unions, but also among labor unions and even within the CUT itself. This was particularly true around issues of ending the monopoly of representation (unicidade) and phasing out the union tax (contribuição or imposto sindical ). Instead, in a fashion well captured

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by gradual institutional change (GIC) theory, there were new regulations to interpret old rules and further developments in ongoing processes of institutional reform stemming back to previous administrations—in short, institutional layering in the category proposed by GIC theory. Indeed, defending what had been accomplished in a May 2010 interview with one of the authors, the CUT’s National Secretary of Union Policy Denise Motta Dau referred to institutional trends under the then outgoing Lula government to that point as a “piecemeal reform” (reforma fatiada).11 The most tangible formal-legal reform, regarding labor relations per se (institutions of labor justice are discussed below), concerned legal recognition and status of labor centers. It occurred in 2008 in Lula’s second term, with the approval of the law recognizing labor centers that represented at least seven percent of unionized workers nationwide along with meeting other regional and sectoral representativeness criteria12 (see Table 4.1). While in 1985 under the first post-military government, labor centers had been “decriminalized,” they had not achieved formal-legal recognition or legal rights to share in the union tax. As a result, there was a proliferation of small, poorly representative self-proclaimed centrals, which could be used by employers or governments or politicians to try to undermine the position of clearly stronger national labor centers, such as the CUT. Under the initial process of recognition of national labor centers based on data they submitted to a new registry and was verified by the labor ministry in August 2008, the following labor centers were formally recognized based on the share of the unionized working population their affiliates represented: CUT, with 35.8 percent; Força Sindical (FS), 12.3 percent; União Geral dos Trabalhadores (UGT, founded in 2007 by unionists coming from various centrist to conservative centers that ceased to exist13 along with splinter elements from the CGT and some unions like the important São Paulo Commercial Workers that had previously been in the Força Sindical ), with 6.29 percent; Nova Central Sindical de Trabalhadores (NCST), with 6.2 percent (founded in 2005 and mostly based on the former official sectorally organized confederations dating from the country’s corporatist union structure); a dissident splinter group from the former CUT reorganized as the Central dos Trabalhadores e Trabalhadoras do Brasil (CTB), with 5.1 percent; and Central Geral dos Trabalhadores Brasil (CGTB) as the remnants of the original main rival of the CUT from the 1980s that had lost many unionists to newly created unions over the decades, with 5.0 percent.14 The CGTB would lose its recognition in 2012, as the

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number of recognized national labor centers fell to five. (To put these figures into context, unionization—as measured among those employed— was increasing modestly in the wage-earning labor force as a whole, from an average of 13.4 percent over 1999–2003, to 15.3 over 2004–2007, to 16.1 over 2008–2012.15 ) Thus from 17 centers “on paper” in 2007 the country evolved to six de jure centrals the following year (Cardoso and Gindin 2009), and then fell to five in 2012. However, non-CUT unions and their respective federations represented more commercial workers than did the CUT, in the sense of how many workers they negotiated on behalf of, not actual dues-paying members (that is, union coverage). Data are fragmentary and self-reported, but as of December 2014 the UGT represented “more than four million commercial workers” and also had the largest number of affiliated commercial workers unions.16 In 2011, the Confederation of Commercial and Service Workers CONTRACS, affiliated with CUT, claimed to represent “more than two million workers in the [commercial] sector.”17 Reporting on number of affiliated unions from government data for 2009, labor scholar Trópia (n.d.) finds that 26.3 percent were affiliated with Força Sindical, 26.3 percent with CUT (CONTRACS), 22.6 percent with UGT, 11.3 percent with CTB, and the remaining 9.8 percent with three smaller centers existing at that time. Besides giving legal recognition of the power of national labor centers meeting representativeness criteria to sign valid collective bargaining and firm-level agreements (convenções coletivas and acordos coletivos, respectively), the law also enabled them to participate legally as worker representatives in various aforementioned public policy councils and to share with members unions in the union tax. The later tax is assessed on workers as one day of payroll for every member within these unions’ jurisdictional base—ten percent of revenues now going to the respective labor center, 15 percent to their affiliated sectoral state-level federations, and five percent to their affiliated national-sectoral confederations, with the respective union’s share dropping from 90 to 60 percent and the labor ministry continuing to receive 10 percent. The law also allowed for the recognition of national-sectoral confederations affiliated with the centers. It took two years for CONTRACS to obtain registration because of legal objections filed by the official, corporatist-legacy National Confederation of Commercial and Service Workers (CNTC), which were ultimately overturned by labor courts.18 This dispute shows in some ways the contested, and by no means linear, path that the development of collective labor

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rights followed. Legal fiat did not easily trump the power of resourceful actors to maneuver within institutions for their own advantage. The most direct relevance of the recognition of centers and other encompassing organizations of workers for Walmart workers was the bargaining resources that it helped foster. National confederations affiliated with a recognized labor center (in this case commercial workers) gained both the share of funding to strengthen their staff and institutional presence as well as the legal negotiating status to be able (among other things) to realize a recently articulated objective of the Walmart workers’ network—namely, to reach a national company-level accord on PLR to which it could be a direct, legal party. While we discuss the tortuous process of PLR conflictual cooperation below, first it is important to lay out another important if, at the time, seemingly innocuous development—the 2010 adoption of the Results and Profit Sharing (PLR) law, under the previous Cardoso government. PLR regulations, pursuant to the 1988 constitutional provisions establishing this right, were issued in 1994 under the interim government of Itamar Franco (1992–1994) and were explicitly established as a means of increasing firms’ productivity. They only specified that workers be represented in the process of determining amounts and indicators at the firm level, with nothing mandated about the process, any role for unions per se, or how such workers were chosen. As a result, bilaterally negotiated PLR arrangements had been discretionary. A common demand of unionists in Brazil overall had been that there be a genuine negotiation of PLR. In addition, a frequent legal complaint was that no PLR bonuses were awarded at all, as was the case in the IOS’s 2000 Walmart observation with the two Osasco Walmart stores (IOS 2000, 39) discussed at length in Chapter 3. By a circuitous process well captured in the GIC category of layering or “sedimentation” of new over old institutional norms over time, constitutional norms from 1988 thus later became innocuous regulations in the mid-1990s and in turn a subsequent potentially promising law in 2000. The latter law was only turned into a vehicle for engaging companies like Walmart by resourceful union agency from the mid-2000s onward. In this instance, rather than a simple battle for enforcement of normative ideals enshrined in law, it was a struggle to turn PLR into a truly bilateral process with genuine reference to workers’ contributions and firm performance (something only vaguely conceivable under the 2010 law). There was also an aspiration to convert any PLR negotiation into a broader forum and even process of negotiation or at least consultation on a wide-ranging

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set of issues at the national firm level (something not contemplated by the law)—in short, a “social dialogue”. Social dialogue had been in the previous decade developed in budding experiences in MNCs in better organized sectors like chemicals, autos, and banking in Brazil, particularly around European firms. A 2006 report by the inter-union statistical and technical assistance entity Departamento Intersindical de Estatística e Estudios Sôcio-Econômicos (DIEESE 2006) provides a statistical overview and analysis of a one-year nationwide sample of PLR negotiations in 2005 (13 percent of which were in commerce). It also proposes a strategy that would inform or at least coincide with what CUT unions in particular sought to transform PLR negotiations into. “Good agreements” for workers, the study concluded, have the following features: negotiated by unions; payment to all workers in equal or near-equal amounts; and not making bonus payments contingent on firm profitability and instead making them contingent on some combination of administrative performance criteria and aggregate worker performance straightforwardly measured (for example, absenteeism). Agreements approximating these criteria—which were only a small subset of the accords studied—thus avoided pitting workers against one another and ensured additional payment to workers (most commonly in the form of the equivalent of one month’s extra wages), which raised their total compensation levels in meaningful ways. In this same 2005 report, DIEESE noted that national or multi-state negotiations by firm—a labor goal given the greater leverage it afforded unions—constituted only three percent of all PLR accords in 2005, found in such sectors as banking, electrical power generating and distribution, and petroleum but not in commerce. Aspirationally, the report lays out what PLR negotiations could and should be transformed into: …[E]xperience shows that negotiation of PLR opens up the possibility of introducing into the program, in addition to the issue of remuneration of work and of management demands, subjects of union interest tied to the work environment and working conditions, to the technological pattern adopted by firms, the skill formation of workers, and working hours, among others. In this sense, the negotiation of PLR could represent a chance to widen worker participation in the negotiation of processes of productive restructuring now led unilaterally by firms, in addition to open up the opportunity to discuss the organization of workers in the workplace.

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As discussed below, there were some uneven gains—more clearly material, less sustained and robust in terms of building a permanent new institutional interface with management. Yet there were also many obstacles encountered by unions in trying to reach these lofty aspirations in national Walmart PLR negotiations.

Elusive Engagement The process of undertaking PLR negotiations and establishing a firmlevel social dialogue was wrapped up with larger efforts in the CUT to organize around multinational corporations (MNCs) as a new front of struggle and negotiation. CONTRACS, as the CUT’s confederation for workers in services and commerce, was part of broader efforts to organize CUT unionists nationally around large multinationals (and large domestic enterprises) dating back to the 1990s. In turn, these efforts were built upon their deep ongoing ties with European confederations as well as— in a dynamic not relevant to Walmart given the absence of home-country unions—their company-level ties with unionists from the home countries of MNCs operating in Brazil (for instance, through global works councils and global union networks organized around individual multinationals) (Anner 2011; Borges 2004; Veiga and Martin 2009). Since 2001, CUT unionists including CONTRACS had partnered with the Dutch labor central FNV through the joint project “Taking on the Multinationals” (Ação Frente às Multinacionais ), known as CUT-Multi. The project aimed to foster the organization of workers into company-specific national inter-union networks, a type of pan-union entity not generally found in Brazil. In 2003, at the CUT’s behest, CONTRACS chose three priority MNCs in which to embark on nationwide network building; this effort was based on, among other key criteria, company size and importance, presence of CUT-affiliated unions within the company’s workforce, and degree of labor rights abuses and labor conflicts. CONTRACS chose Walmart and Carrefour in the supermarket sector, and the Dutch clothing retailer C & A, as priority targets. During the initial period, the CONTRACS Walmart union network— formally known as the National Walmart Union Committee—opted not to open the network yet to commercial unionists representing Walmart workers that were affiliated to other labor centers. The calculation was to

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accumulate experience and strengthen ties as a prior step, and as connections with unions representing Walmart workers from other countries were also being constructed. Labor–management relations particularly regarding CUT unions (whose ranks increased in the sector with the 2005 geographic expansion of the firm into locations in the Northeast and South with commercial workers affiliates) can be subdivided into two basic periods—2003–2009, and 2011–2014. There was an intermediate parenthesis marked by what at the time seemed like a potentially landmark national PLR accord in 2010. In the former period, a national social dialogue was joined, but met only in fits and starts, and produced no national agreement, though some local PLR accords were achieved. In the latter, conflicts and protests increased, including some between more conservative unions and the company, and social dialogue was strained. By the end of the period covered in this chapter, negotiations and consultations began to become bifurcated by national labor center, as inter-union cooperation across rival labor centers—never strong to begin with—broke down. Over 2004–2009, our research with mostly primary sources19 reveals that CONTRAC/CUT supported local unions in their conflicts and negotiations with Walmart. In some ways legally it was unavoidable that its support role would be a principal focus given that it lacked the statutory power to enter into binding collective bargaining or firmlevel agreements until its 2010 legal recognition. This was the case even though de facto it negotiated with and alongside its member unions with national Walmart management. Starting in 2004, some negotiated municipal-level PLR accords that were signed by affiliates (located by the authors in the CONTRACS archives in 2016)—with Walmart at its Contagem store in greater Belo Horizonte, state of Minas Gerais, and Ahold-owned Bompreço (which Walmart subsequently acquired in 2005) in the city of João Pessoa in the state of Paraiba. A first meeting with the company took place in 2004, at which management recognized in principle the importance of negotiating a national PLR accord. Over 2004–2006, meetings took place between DIEESE experts and CONTRACS officials to gather information comparing company-level accords, examine concrete indicators of firm and employee performance, and develop a negotiating proposal, which was formally submitted to the company in 2006. The Walmart workers network of CONTRACS unionists held talks with the firm again in 2006, declaring the company had recognized

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them formally as an interlocutor. Yet neither then nor over the ensuing two years were agreements reached. Among the sticking points were the network’s concerns in its company-level agreements or less formal arrangements were the inclusion of outsourced workers (terceirizados ) and temporary workers, demands resisted by the company. According to one of the co-authors’ interview with the secretary general of the CONTRACS over 2004 to 2011, “it was difficult to negotiate with Walmart,” since the company representative with whom they dealt shifted frequently.20 Moreover, an additional difficulty was that some unions that left the CUT after the 2008 labor center recognition law had reached what she termed “bad” agreements with the company to try to claim credit for the end of year bonus with rank and file. Since they were still nominally part of the workers network, this turn of events led to some internal discord. One area where there was progress, however, was in addressing “shopfloor problems” (problemas de planta), where the network was sometimes able to resolve specific local problems that member unions could not. These statements further undergird the importance of distinguishing between central corporate HR managers and store-level management, and clarifying that the communication channel that was established through the CONTRACS-backed network was with the former. However, in practice agreements reached depended on actions taken by store managers—a sort of complex two-level negotiation. In a process our research was not able fully to reconstruct, a lowkey results sharing accord was signed on December 21, 2010, covering company results for 2010 with bonuses to be paid out by mid-2011. Somewhat surprisingly, the accord—which we located in the CONTRACS archives—was signed not just by the CONTRACS but also by the UGT as well as the São Paulo commercial workers federation, known as FECESP or Fecomerciários , affiliated at the time with the CNTC (confederation) as well as the FS (center) and which represented workers in many cities in the interior of the state as well as greater São Paulo. Such inter-union cooperation and participation by non-CUT unionists in the Walmart workers network was episodic rather than constant, however. A further surprise was that the agreement received no coverage in the news media or on the respective websites of the three signatories, all of which carried stories about relations and conflicts with firms whose workers they represented from that time period. For her part, the CONTRACS secretary general indicated in our interview that there were no national accords with Walmart at all during her tenure (2004–2011), and the CONTRACS

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news bulletin on Walmart’s results sharing bonuses in the United States dated January 1, 2011 (just 10 days after the written accord) made no mention of the agreement and instead criticized the firm’s unilateral approach to these issues: ….in Brazil, those workers the firm deems “deserving” a bonus generally receive one month’s wages or around R$600 under the profit and results sharing plan (PPR in Portuguese). Managers reach three monthly wages. It’s good to remember that the Wal-Mart Workers Committee, participating unions, and CONTRACS/CUT do not agree with the PPR criteria utilized by the company. The worker knows well that many of the goals set by companies for employees to earn the right to PPR or PLR are impossible to achieve, unwise, and threaten the health and family life of the worker.21

Examining the brief, four-page agreement and considering the representational context in the sector, it is somewhat more understandable why the CONTRACS did not publicize it and why in the aforementioned interview the organization’s secretary general indicated there had been no national agreements with Walmart though in fact her signature is on the document. Besides excluding temporary and outsourced workers whom the CONTRACS had fought to include (though half- or part-time workers were included), the agreement mainly established that operational earnings (70 percent) and sales targets (30 percent) at the store level would determine how much and whether results bonuses would be handed out and that those for full-time workers would be capped at one monthly wage while those for white-collar employees would be capped at three—yet without specifying targets and indicators and other operational details found in some later PLR accords. In other words, the minimalist accord covering the firm’s results (earnings and sales) from 2010, while important, essentially decentralizes results sharing to the store and municipal level, and does not specify a bilateral process involving information sharing for implementation or consultation on indicators and targets that might inform results sharing for subsequent years. Such a skeletal national framework was rightly not considered a breakthrough. Yet, from the CONTRACS perspective and also reflecting the “good accord” criteria set out by the 2006 DIEESE study, it nonetheless avoided department-level or individual goals that might exacerbate pressure on and competition among workers, lead to large disparities in

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bonuses across workers in the same store, or make workers responsible for performance resulting from management decisions alone. Inasmuch as the firm had refused to sign accords covering 2009 citing poor performance, the fact that it agreed to do so on a nationwide basis following uniform criteria was salutary. Moreover, compared to the limits of 40–60 percent of one monthly wage set in local PLR accords in the mid-2000s, the provision of bonus payment of up to one additional monthly wage (at a time of real wage increases, as discussed below) was not insubstantial for workers. Thus, while not necessarily a breakthrough, the 2010 accord did represent progress—albeit, in retrospect, somewhat of a high-water mark for labor–management relations. In order to situate the sharpening conflicts at Walmart evident from 2011, it is important first to note overall trends in wage bargaining and strike activity at the sectoral and national level. As noted in Table 4.2, consistently from 2005 onward, over 90 percent of all annual wage settlements for commercial workers in each year were equal to or above the official consumer price index. Yet it is easy to read too much into these gains. Wages mostly paralleled the arc of national statutory minimum Table 4.2 Negotiated wage increases by sector vis-à-vis official Consumer Price Index (IPC), 2003–2014 Year

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Below inflation

Equal to or above inflation

Commerce (%)

Economy-wide (%)

Commerce (%)

Economy-wide (%)

55.6 17.6 6.8 3.5 5.0 7.8 6.1 3.1 0.9 2.7 1.8 0.9

57.7 19.1 12.0 3.7 4.0 11.9 7.4 3.9 6.0 1.2 6.3 2.4

44.5 82.3 93.2 96.5 95.0 92.2 93.9 96.9 91.1 97.3 98.2 91.1

42.3 80.8 88.0 96.3 96.0 88.1 92.6 96.1 94.0 98.8 93.7 97.6

Source Departamento Intersindical de Estatística e Estudos Sócio-Econômicos (DIEESE), Estudos e Pesquisas: Balanço da Negociação Coletiva, various years (based on an annual data base on categorywide collective bargaining contracts [convenções coletivas ] as well as firm-specific accords [acordos ]). Compiled by the authors

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wage increases (recalling that wages are expressed in collective bargaining as multiples of the official minimum wage). Yet, as we will see below, rates of turnover remained very high, and average rates of job tenure disturbingly low; thus individual workers were constantly being cycled into and out of supermarket jobs and there is much evidence that quit rates were high along with dismissals. In any case, these wage increases occurred within the general national context of expanding autonomous collective bargaining with declining resort to judicial mediation or intervention. While most conflicts were resolved strictly by the parties, the rate of strikes in which the labor judiciary played some role oscillated from 28.5 percent of private sector strikes in 2011 to 33.3 percent in 2012 to 22.7 in 2013. As one ILO report (Visser et al. 2017) notes, Brazil was among only ten of a set of 48 developing and developed countries studied and with comparable data over time with an increase in collective bargaining coverage from 2008 until 2012 or 2013 (that is, post-Great Recession)—it had the third highest rate of increase in coverage (about 6.5 percent), reaching 42 percent of all those employed and 65 percent of employees. The report notes this was driven by “the growth in employment together with its increasing formalization.” In the economy as a whole and with tight labor markets and brisk growth, strikes were increasingly effective—80.2 percent had their initial demands fully or partially met in 2011, 84.8 percent in 2012, and 87 percent in 2013.22 While still not a widespread weapon—reflecting the meager structural power of commercial workers unions as well as predominance of moderate to conservative union currents—strikes returned to the collection action repertoire of some commercial workers’ unions in a way that had not been seen in the 2000s. During the 1990–2000 period, there were 95 strikes for an average of 8.6 per year, while from 1991 to 1999 there were only 12, for an average of 1.3 per year23 ; this development suggested some initial strides toward building associational power, and looking back to the second half of the 1990s, it reveals that tight labor markets obviated the need to do more than threaten to go on strike. Strikes were also not just about economic demands. For instance, in 2012 in the commercial sector, DIEESE (2013) found that 60 percent of strikes in the sector included (exclusively or in combination with other demands) demands related to “non-compliance with rights,” meaning employer violations of labor law provisions or the terms of collective bargaining conventions or collective labor accords.

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The year 2013 was particularly eventful in Walmart’s labor relations and seemed to crystallize ongoing disputes pitting unions across the range of national labor affiliation against a firm that negotiated with one hand even as it undermined contractual and legal rights with the other. In January, the commercial workers’ union staged a six-hour strike of 300 Walmart workers in the interior São Paulo city of Limeiras to protest wide-ranging legal and contract violations. The walkout gathered widespread support from not just fellow member unions in the state federation but also the UGT-affiliated commercial workers union of São Paulo and other UGT leaders.24 The local commercial workers’ union president complained at a strike rally that they had sought a solution to these issues with management through a roundtable and meeting with the local labor ministry office and that issues of noncompliance had been detected in Labor Ministry inspection. Subsequent to the warning walkout, the firm came to the table, and then agreed to regularize missing or underpayments; revise the PLR arrangement from the previous year; address persistent transfers of employees throughout the store away from their normal jobs due to understaffing in key areas such as cash registers (desvio de função); provide clear pay stubs as legally mandated; respect workers’ right to decide whether to perform overtime; and respect the obligation for union consent to shifts in weekly hours under the hours bank and the right to a day of rest after every six days of work. In short, the firm effectively agreed to abide by labor law as well as collective bargaining provisions. Health and safety issues and psychological harassment (assédio moral ) were also discussed. The next month, in February 2013, the Osasco union SECOR, affiliated with CONTRACS/CUT, staged a protest outside a Sam’s Club and leafleted the company’s various stores there regarding non-fulfillment of contract clauses affecting workers at all of Walmart’s brands in the city and neighboring municipalities; these clauses concerned, for example, dismissal of workers with legal guarantees of job stability after work accident absences, late payment of commissions that were owed to vendors paid on commission, and delays in completing legal paperwork for dismissed or quitting workers affecting their access to severance pay and/or unemployment insurance. In a persistent theme from this time period, echoing the abovementioned Limeiras dispute over wide-ranging legal and contract violations, the leadership “complain[ed] of difficulty in maintaining communication with the chain, since the Human Resource

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headquarters, [newly] located in the South, doesn’t repond to demands that are sent to them.”25 In April 2013, a meeting of the Walmart workers’ network of the global commercial and services labor federation UNI Global Union (originally standing for Union Network International and changing to the new name as of 2009) took place in Mexico. Attending were representatives from unions representing Walmart workers in Brazil from the various centers with commercial worker affiliates (CUT, UGT, and FS). On its heels in late April, they organized a joint protest involving roughly 500 workers at the Walmart Supercenter in the Pacaembu neighborhood of the city of São Paulo, which closed the store for a few hours.26 Management agreed to meet with the São Paulo union (affiliated with the UGT) to discuss some of the very same violations that were protested at other stores over this period—malfunctioning time clocks that were cheating workers out of hours worked, management shifting workers around jobs within the stores, late payment of benefits such as the annual additional month of pay (known in Brazil as the “13th wage”) disbursed at the end of every year, and excessive overtime. The strike was supported by unions from the CONTRACS such as SECOR from Osasco, other UGT unions organized into the SENTRACOS, and the Força Sindical’s commercial workers affiliate SENTRACOMSERV. Five days after the protest, SECOR also reported it was able to meet with Walmart Brazil’s union relations chief about “delay in the delivery of paystubs, broken timeclocks, excessive working hours, wage differences among workers in the same job category, adjustment of the meal voucher, non-compliance with Regulatory Norm 17 [regarding ergonomic conditions for cashiers]….non-respect for job descriptions (desvio e acúmulo de função), late payment of the transportation voucher, unauthorized deduction from paychecks, and non-payment of overtime.”27 The firm agreed to repair the timeclock within 72 hours, and within 15 days it said it would get back to the union to determine why paystubs were not being provided promptly as required by law and what corrective actions were being taken. Notable about this inter-union cooperation across centers evident in May 2013 was, first, how relationships nurtured in part through common membership in a global company network fostered joint action. Also salient, second, were the common threads running through the underlying conflicts concerning management’s mistreatment of workers and disrespect for legal and contractual norms across store locations and store

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brands in Brazil’s largest state. In September 2014, coinciding with a meeting of the UNI Walmart network in São Paulo, Brazilian unions would later be joined by fellow unionists from five other countries in a two-hour protest at the same store, which focused on many of the same noncompliance issues but was set in a larger international context of rights of Walmart workers.28 The deterioration in the quality of the bilateral “social dialogue for conflict resolution” that the Walmart network tried to maintain with the firm was further evidenced by the sudden mid-October 2013 decision by the global parent to close 50 stores in Brazil and China.29 The decision came down without announcing which locations, what would happen to workers at those stores, and with no prior consultation with the network, which learned about the decision through the news media. The network complained in a unusual joint public protest letter demanding immediate clarification, signed by commercial workers unions from the three major centers along with their respective logos (CUT, UGT, and FS) as well by UNI global union representatives, that the “social dialogue did not enjoy the same level of commitment from the firm” as it did from unions.30 Engagement was not a two-way street. It is quite possible that the subsidiary management did not have advance knowledge of the decision (a larger issue discussed in Chapters 6 and 7), though that itself was part of the problem for unionists confronting Walmart--different layers of management dealing with Brazil did not always seem to be in sync, and unionists seemed to have at best an on again/off again channel of communication to only the Brazil HR officials. The latter, in turn, were now located in the South of the country some distance from the traditional geographic locus of the company in Brazil in São Paulo and the Southeast; furthermore, the HR officials did not seem to have the clout or authority to assume binding commitments on behalf of store management when they spoke with the network and with unionists from individual store locations. How should we interpret the apparent contradiction of on-again/offagain high-level bargaining and often quite fierce localized conflict, co-existing within the 2010–2014 period at Walmart in Brazil? The issue can be approached from the angles of employment relations, union strategy, and firm strategy. Understood as a relational concept, conflictual cooperation captures a not uncommon employment relations pattern in the post-war industrialized world of situations whereby strikes and

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other forms of mobilization were used in order to secure or influence institutionalized negotiations. However, in this instance, unlike the German economy of the 1980s where Streeck (1992) coined the term, the labor movement lacks statutory workplace representation (as well as participation in company decision-making bodies), and the PLR negotiating process is weakly anchored in formal-legal rules since companies can choose a watered-down form of worker participation instead. Still, PLR negotiations gave unionists, who bore no illusions about the firm’s benevolence, a chance not only to try to make up for the company’s meager if increasing wages; they also gained some higher-level attention to persistent shopfloor problems. Understood from the perspective of union strategy, if more conservative unionists from the UGT and FS were known for a more economistic, bread and butter focus, it is noteworthy that the recalcitrance of the company’s retrograde store-level practices even pushed them at times into confrontational tactics and harsh denunciations of management that echoed those of their left-wing CUT rivals. Realizing how weak they were vis-à-vis management, unionists at times set aside organizational rivalries to cooperate across labor center lines when it made sense. Put differently, there was simply no space—or sophistication—from the point of view of company policy for the sort of collaborationist, micro-corporatist pact-making between management and moderate to conservative unionists that similar situations might logically engender, or in practice have engendered in other sectoral settings in Brazil or elsewhere (Anner 2011, 139–165). To the extent any coherent tendencies in management strategy can be gleaned from union declarations and the course of conflicts and the legal disputes analyzed below, there was a clear disconnect between the selective union engagement posture at times evident on the part of Walmart’s national HR officials— the slightest of deviations from the global firm’s anti-unionism—and the strong-arm tactics and hostile position toward unions clearly evident on the part of store managers and supervisors.

Mounting Legal Actions Against Walmart Rising legal claims and scrutiny of Walmart reveal much about the company’s stubborn adherence to sweating a vulnerable, high-turnover workforce and subjecting it to a repressive familial workplace culture. Legal actions must be understood in the broader context of the changes

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in regulations and laws reviewed in Table 4.1 (see above) and the patterns of agency on the part of labor prosecutors and inspectors, as well as re-interpretations of norms and then case applications by labor courts. Among the key developments were expanded authority to judge collective claims having to do with union–management relations including enforcement of the terms of collective bargaining contracts; the expanded geographic reach of lower-level labor courts; and heightened willingness of labor prosecutors to wield their power to sue and investigate firms and in particular to use civil public actions (Ações Civis Públicas , or ACPs) as a sort of lawsuit against renegade firms. Also part of this shifting institutional context were the heightened frequency of individual claims against firms in general and a brief period of recapture of the scope and reach of the labor inspectorate in the latter half of the 2000s to early 2010s. The growing willingness of unions of all orientations to make use of these legal tools and channels is an important linchpin of the following brief overview of trends in legal cases against Walmart. They and their legal departments frequently acted as a conduit or promoter of such claims-making. On the main webpage of commercial worker unions from across the ideological spectrum of national labor centers, one finds a “denunciation” link for contacting the union through various means (email, telephone, in person) about abusive and illegal employer practices.31 After 2003, unions gained the legal right to defend in labor courts both collective claims regarding enforcement of collective bargaining contracts as well as “homogenous individual” claims regarding patterns of practice. For a CONTRACS leader we interviewed in 2014, “compared to the U.S., we are much better off because our laws help guarantee at least some minimal conditions so we [unions] can take legal actions and punish Walmart, something that is very difficult to do in the United States.”32 It is difficult to gather and analyze data about legal suits against any particular firm because of the way that cases are stored online with identifiers based on tax identification number (Cadastro Nacional da Pessoa Jurídica or CNPJ) rather than name, which are often in turn specific to the particular brand of the store in question (Walmart, Sam’s Club, Todo Dia, Maxxi, and so forth); furthermore, all the records are stored separately based on the particular court jurisdiction (local, regional, and federal). In some cases, records are accessible online, though in some they can only be accessed based on an in-person request. In addition, cases that reach labor courts stem from multiple sources—those brought

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by labor prosecutors, claims brought by unions, and individual worker claims (in which workers are often represented by their union). Faced with these data limitations, we gathered in March 2019 all records of active or completed court cases in which there were rulings against Walmart and its two larger competitors—Carrefour and GPA Casino—and damages were awarded for the period from 2004 to 2018. The research covered 13 regional labor tribunals in the Southeast (São Paulo and Campinas in the state of São Paulo), Center-West (the Federal District and Tocantins-Federal District), Northeast (Paraíba, Rio Grande do Norte, Ceará, Maranhão, Sergipe, and Alagoas, and Bahia), and South (Rio Grande do Sul, Santa Catarina, and Paraná). Only those with judgments rendered through 2014 are discussed in this chapter. These cover the majority of the states in which Walmart and its competitors operate, though excluding due to lack of data access the following: three other states in the Southeast (that is, Rio de Janeiro, Minas Gerais, and Espírito Santo with a combined total of 13 Walmart stores in 2015), two in the Northeast (Pernambuco and Piauí, with a combined 69 stores in 2015), and two in the Center-West (Goiás and Mato Grosso do Sul with a combined four).33 In total, the cases correspond to jurisdictions containing 82.3 percent of the company’s stores as of 2015. It is important to clarify that the general proliferation of suits and claims judged by labor courts during this period reflects a combination of both greater accessibility of courts for individual claims as well as greater activism by a professionalized labor inspectorate (Coslovsky et al. 2017; Coslovsky 2014). As documented by Gomes and da Silva (2018, 231), in Brazil as a whole “between 2005 and 2013 the number of [individual claims] grew by 214,000 per year compared with the previous decade (1995–2005)….” (The year 2013 was the end point of their available data set.) They attribute this in part to the fact that, as their graphs on the creation of new local labor courts (varas ) show, labor courts had become for the first time a “national institution” in geographic scope with the rapid creation of new local courts in the traditionally underrepresented interior of Brazilian states from 1989 to 1995, and then again after 2004. This development was spurred on in the latter period by a 2004 constitutional amendment that expanded courts’ jurisdiction from only “employment relations” (individuals relations with employers, or individual labor rights) to “labor relations” (meaning collective labor rights and the terms of collective bargaining and other labor–management agreements) (see Table 4.1). In addition, we may add the impact

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of a 2003 TST (Superior Labor Tribunal) decision that allowed unions to represent workers in court. The expansion of local courts coincided with the growth of interior cities in the expanding footprint of national retailers such as Walmart, and several of the cases noted above (such as those in Bauru and Araquara in São Paulo state) began with such cases. One downside of what Gomes and da Silva term an “explosion in litigation,” however, was delays and the “detriment of procedural efficiency (658,000 more cases received than adjudicated)” over the 2005–2013 time frame of their study. A comprehensive and detailed portrait of all the suits in which Walmart was sued successfully for damages was not possible due to the volume and poor searchability of the raw case information as well as the possibility of not capturing all cases given different tax ID numbers. Nor was a quantitative comparison possible for the same reason, and also because this geographic slice represents a higher share of Walmart’s stores than it does for its two larger competitors, each with a nationwide presence. The alternative chosen was to delve at further length into those cases that received wider public attention due to news coverage and reporting on union news forums. Typically, this circumstance had to do with one or some combination of the following: the alarming quality of the violations in question; the size of the damages awarded; and the fact that they ended up in the Superior LaborTribunal (TST), meaning the firm (or plaintiff, in theory) had appealed against lower and regional court rulings. Thus Table 4.3 presents an illustrative subset rather than a comprehensive accounting of cases where Walmart was found liable for damages. The consideration of the size of fines imposed is important not only for what it reveals about the company’s treatment of workers and persistence in practices that had a tangible monetary cost. It is also significant because of the role they played in losses in Brazil that eventually led the global parent to shed the subsidiary (discussed at length in Chapters 6 and 7). In 2012, Walmart International, to which the Brazilian affiliate belonged, took a charge of US$69 million in the third quarter of 2012 due to labor damages from a 2011 ACP that ended up in the TST, which ruled against the company.34 According to the CEO of Walmart International, Doug McMillion, the growth in the global division’s profits was nearly cut in half due to these Brazil-related charges against global profits. Such problems would only deepen. In February 2016, Reuters reported that “[i]n January 2014 Wal-Mart disclosed that unforeseen Brazil tax assessments and employment claims tied to a cost-cutting drive would

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Table 4.3 Selected main labor lawsuits with damages assessed against Walmart by Regional Labor Courts (TRTs) and Superior Labor Tribunal (TST), 2011– 2014 Labor court/date

Description

Value update (as of December 2018)

TST (Brasília) 2011

Psychological harassment (collective suit) (Federal Constitution, Articles I, II, III e IV, and Articles V and X) Psychological harassment: Videotaping in women’s changing room and forced participation in motivational cheer Psychological harassment: Videotaping in women’s changing room and group cheers Psychological harassment: Bodily searches of workers (collective suit)

R$45,131,871.54/ US$24.4 million (US$1.00 = R$1.85, December 2011)

TRT-10 (Brasília) 2012

TST (Brasília) 2012

TRT-10 (Brasília) 2011

TST (Brasília) 2011

Psychological harassment: Worker forced to dance and shake hips during group cheer

TST (Brasília) 2011

Failure to provide required rest breaks (collective suit)

TRT-2 (Campinas) 2014

Psychological harassment: Forced participation in group cheers, reprimanding workers disrespectfully in front of co-workers and employees Failure to provide required breaks, working hours beyond legal limit (collective suit)

TRT-1 (São Paulo) 2014

Total

R$18,604.25/ US$0,056.35 (US$1.00 = R$185, December 2011) R$84,743.36/ US$40,938.82 (US$1.00 = R$2.07, December 2012) R$800,000.00/ US$432,432.43 (US$1.00 = R$1.85, December 2011) R$55,000.00/ US$29,729.72 (US$1.00 = R$1.85, December 2011) R$990,316.81/ US$535,306.38 (US$1.00 = R$1.85, December 2011) R$177,480.00/ US$67,482,88 (US$1.00 = R$2.63 December 2014) R$301,920.00/ US$114,798.47 (US$1.00 = R$2.63, December 2014) US$25.6 million

Source Compliled by the authors. Sentences and texts of decisions were consulted on websites of Regional Labor Courts (TRTs) in March 2019. The following tool has been used for historical exchange rates: https://www.x-rates.com/. The cases presented are illustrative but not exhausitve

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slice 2 percent off its annual earnings globally. Labor claims in Brazil also hurt its results in the third quarter of the financial year that has just ended [fiscal 2015].”35 In all the cases listed in Table 4.3, damages were awarded against Walmart. In some of the cases, a final result of appeals had not been announced as of March 2019, and two were proceeding under secrecy, given the sensitive and confidential nature of the alleged abuses and in order to protect the privacy of victims. As noted in Table 4.1, it was not until 2012 that cases affecting more than one region could be brought by prosecutors in the respective Regional Labor Court (TRT) or their choice among those relevant to the case, rather than having to be filed in the Federal District; together with the length of time between filing and judging lawsuits, this factor may help explain the preponderance of cases judged in the Federal District TRT. Beginning with the Federal District (Brasília) case in 2011, six of the seven damage awards against Walmart (through the Federal District case in 2013) concern psychological harassment (assedio moral ). This violation can be disaggregated here into forced dancing and shaking during motivational cheers, intimate bodily searches, and videotaping in women’s changing rooms. Only two in this “mini-sample” of high-profile cases had nothing to do with psychological harassment: violating rest breaks within or between shifts (in both) and working hours beyond the legal limit (in one of them), which are common abuses in supermarket retail and, as will be noted below, are among the frequent infractions detected by labor inspectors across Walmart and its two largest competitors. In one illustrative case of participation in cheers, the plaintiff found, in the judge’s ruling, that Walmart “forced him, daily, at the end of two meetings that took place at the firm, and other employees to sing out a cheer (hino motivacional ) accompanied by clapping and swaying of hips.” The judge “confirmed the elements that characterize civil responsibility [under the Constitution]: the illicit conduct, the damages, and the causal nexus.” He went on to reason that the firm would need to demonstrate the right of an employee to refuse to take part, “which was not established in the case documents.”36 In other cases, it is equally clear that judges’ determination that there was no demonstrable “right of refusal” was a central element in their rulings. In earlier chapters, the centrality of the Walmart cheer to the selfdescribed “Walmart culture” and “Walmart way”—and what we have characterized as a workplace regime of repressive familialism—has been

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underscored. The practice was disseminated around the globe to Walmart operations and the legal and union pushback it received in Germany is noted in Chapter 3. In a 2014 public statement to a Brazilian news outlet protesting a judge’s finding that forced participation in its cheer (often referred to as a “war chant” or grito de guerra in Brazil) constituted psychological harassment and pledging to appeal, the firm clarified the cheer’s role: “The company cheer aims to make the work environment relaxed and promote the unity of work teams and, thus, participation should never be obligatory.”37 However, viewing the many video clips of the “war chant” on Youtube, what is striking is the martial, processional, and aggressive character of the chanting, singing, and marching in unison, and that what is yelled and sometimes also spelled out with hand-held letters is the company name, often together with the name of the particular store. Clearly, individual loyalty and subservience to the company, and the disappearance of the individual into the collective whole of the “Walmart family,” is what the ritual is about. Somewhat amazing in these instances is that, first, such practices of forced participation in what many workers found to be a degrading ritual continued from the time of the initial IOS research in 1999–2000 (IOS 2000) discussed in the previous chapter—when one of the three authors took part in fieldwork interviews in which union leaders discussed the cheer—and, second, that the company and its managers never apologized for this behavior; this is unlike the public apology that the firm was forced by the labor ministry to issue in Chile for referring to its workers as colaboradores (the firm’s loose rendering of “associates” into Spanish) rather than simply trabajadores and henceforth to correct this in all communications with its workforce (see Chapter 5). In Brazil, there is no clear definition of psychological harassment (somewhat akin colloquially in English to bullying) in federal civil law, as there is for sexual harassment. A law professor and jurist characterizes courts’ interpretation of the offense as follows: Pscyhological harassment at work occurs when…someone degrades and creates disharmony in the work environment…humiliating, constraining, underestimating, subjugating or disrespecting the public servant or employee, in a repeated manner, intentionally affecting his or her image, self-esteem or psycho-emotional dignity (objectively demonstrable by specialists). The main characteristics of psychological harassment at work are: (1) abusive and offensive behavior; (2) offending pscycho-emotional

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dignity of the victim; (3) conduct undertaken repeatedly; and (4) purpose or intent [finalidade] of tarnishing [the victim’s] image, self-esteem or pscyho-emotional dignity.38

In one case in the Federal District, the judge relates psychological harassment to academic research in organizational and work psychology, with the idea of “emotional dissonance” connected to the broader sociological concept of “emotional labor” (Hochschild 1983). The ruling notes that “emotional labor” in commercial settings is. …aimed at offering better quality and more competitive services….[which] can turn the emotional state of the individual into a means of making money, a central idea to Hochschild’s emotional labor…and supported by other authors…who believe that emotional labor can be an oppressive obligation. The expressing of emotion, instead of being a personal decision, becomes a currency of exchange [commodity], with standards and rules dictating how and when emotions should be expressed.39

In a different cultural context, it may be noted, the three meter rule under which Walmart employees are required to smile at each customer who enters that space was so resented by its German workers and found uncomfortable by its German customers that this core global practice within Walmart HRM training and management in “customer service orientation” had to be discontinued in that country (Chapter 3). It is also important to point out that unions were aware of and promoted greater awareness of psychological harassment on the part of workers and assisted workers in filing individual claims, taking advantage of the recent changes granting them that authority. In 2013, CONTRACS (2013) published a primer (cartilha) to help workers and unions understand, denounce, and take legal action again psychological harassment, with an updated edition released in May 2016.40 Not all legal claims were individual, as collective lawsuits (ACPs) were also brought successfully against Walmart by labor prosecutors. (In such cases, damages are awarded not to workers but to designated government offices that provide worker training—such as the Fundo do Amparo ao Trabalhador—or particular philanthropic organizations.) A 2011 awarding of damages in the Federal District covers violations in three states plus the District and extends beyond psychological harassment to also cover overtime abuses, restrictions on access to bathrooms, and

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“illicit subcontracting.” The judge ordered the company to cease making employees work off the clock to avoid overtime payment (complaining workers were threatened with dismissal); to suspend cheers; and to guarantee employees the right to take restroom breaks. The judgment found there was illegal subcontracting when “there was the exercise of supervisory power of managers over store aisle vendors (promotores de vendas ),” including when they were required to perform tasks intrinsically reserved for hypermarket employees such as shelf stocking. (The legal concept of “atividade fim” or “core activity” was distinguished at that time in Brazilian labor justice from “atividades meio” or “intermediary activities,” which can legally be carried out by those hired by subcontractors. A new outsourcing law was passed in 2017, discussed in Chapter 6.)41 Common themes across another subset of highly publicized cases in which public prosecutors or individual workers won damages against Walmart were disrespect, humiliation, and intimidation—aggressive searches of employees’ bodies and belongings, videotaping of female employees in changing rooms, and reprimanding a worker with foul language in front of co-workers and store employees. The background of physical searches is concern about employee theft, not uncommon in retail establishments. Yet Walmart went to unusual lengths to intimidate workers in trying to combat it—workers were made to line up single-file to be searched in front of customers; searches were of clothing and undergarments as well as belongings and included patdowns (apalpacões ); and strip searches in private rooms were sometimes conducted.42 One particular suit spanning several states cost the firm R$800,000 (about US$394,807 at October 2012 exchange rates). The judge ordered Walmart to suspend physical searches nationwide at its stores, and to suspend visual searches (without due cause) in all 18 states where it operated (in addition to the Federal District) except one (Paraná, where a lawsuit on this matter had failed). Almost always, Walmart appealed to higher courts the damage awards against it from lower-level courts (varas for individual claims or TRTs for collective suits) in the country’s three-tier system culminating in the TST. CUT leader and CONTRACs official Lucilene Binsfeld, interviewed on the CUT’s online and social media TV dos Trabalhadores at the aforementioned August 2014 rally against the firm’s lack of respect for worker and labor rights that united the Brazil Walmart network across labor centers, gave her interpretation of the company’s strategy: “For them, it’s more viable to keep on paying legal damages, appealing cases to higher

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courts, than to comply with laws.”43 Indeed, it seems as if never admitting its practices broke laws and stringing out appeals were part of its legal strategy, which suggested that compliance costs were perceived as higher than legal and reputational costs associated with continuing illegal practices. However, as the period covered by this chapter comes to an end, with a stagnation in sales and closing of stores and opening of others even before the Brazilian economy went into a tailspin, legal costs were mounting. This development was contributing to a rising tide of red ink in Brazil that was concealed for most public observers given the company’s consolidated international division profit reporting practices (that is, Walmart Brazil was part of Walmart International, which in turn was a “segment” of Walmart as a whole). Labor inspectors show up in these case summaries in one instance (in which routine inspections, in the city of Bauru in the interior of São Paulo, had detected irregularities in time clock records). Yet they also make a more problematic appearance in the judge’s decision, and the case—having to do with altering the time clock to cheat workers out of overtime—also reveals Walmart’s frequent legal stubbornness. With the inspection report in hand, the legal office of the labor ministry (Ministério Público do Trabalho, or MPT) had tried to reach a corrective action agreement (Termo de Ajustamento de Conduta, or TAC in Portuguese); the company refused to sign as it appealed the inspectors’ finding. In the meantime, it did compensate workers for lost overtime. It was only then that the MPT prosecutors filed a suit in which the judge awarding collective damages found that the company’s effort to limit any decision to a legal cease and desist order (that is, avoiding the fine levied by the inspectors or any collective damages through the lawsuit) betrayed a deliberate purpose of recidivism in violating the law, free from any sanction and betting on the inefficiency of the state organs of labor enforcement, ….since the structural precariousness of [these] organs is notorious, and their deficiencies undermine the possibility of real monitoring and deepening of investigations concerning the effective compliance with labor legislation by firms. [emphasis added]

Thus, the importance and relevance of “judicial provisions compelling the firm to obey the law” is underlined. The judge went on to assess a daily fine if the hours-keeping and underpayment transgressions continued. Telling for present purposes is not only the recalcitrance of the

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firm’s legal stance but also the judge’s open criticism of the enforcement capacity of the labor inspection system in the face of such a brazen repeat corporate offender. Before turning briefly to an overview of legal infractions detected at Walmart by labor inspectors, it is important to consider the similarities and differences vis-à-vis its major competitors Carrefour and GPA, the former French-owned and the latter a subsidiary of the French Casino retail group. This comparison is important in light of the arguments and findings of Tilly (2006, 2007) on Walmart Mexico and of Carré and Tilly (2017) with reference to mostly secondary data on a multitude of Walmart host countries—namely, their contention that Walmart is essentially one among a range of “bad” employers in a problematic sector that squeezes workers. We find a major caveat to this argument in Brazil regarding everyday treatment of workers—the workplace regime, which does not factor much into their analysis—where Walmart’s abusive practices were demonstrably worse. Among the high-profile cases at these competitor firms over roughly the same time period, psychological harassment figured only rarely by contrast with the situation at Walmart. Instead, the largest claims awarded against, first, Carrefour concern health and safety (emergency exits, a serious work accident, lack of freedom in taking bathroom breaks); searches of employees’ personal effects; and violation of working hours limits. The one case of psychological harassment among the high-profile cases at Carrefour concern disciplinary policy for discrepancies in cash register closings, which progressed from verbal warnings to suspension to dismissal with just cause. (Unlike other supermarket firms, there was no additional pay built into cashiers’ wages for register discrepancies at Carrefour—known as quebra de queixa in Brazilian retail—designed to prevent such common problems from escalating into disputes). At GPA, bodily searches; false accusations of employee theft; illegal subcontracting (of cashier and grocery bagger duties); absence of required breaks or rest intervals within or between shifts (in three separate cases); excessive working time (two separate cases); and hiring of off-duty police officers as security agents were the main causes of damages awarded in high-profile cases. There was only one case of collective psychological harassment (in 2011 in Araquarara in the interior of São Paulo), concerning in addition illegal withholdings from severance payments, illegal extension of working hours, and lack of rest breaks within and between shifts. Besides the greater frequency of psychological harassment among legal claims and lawsuits successfully

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filed against Walmart, what also stands out is the prevalence of collective suits (brought by labor prosecutors as ACPs) against the American retailer; by contrast, the most prominent psychological harassment claims at the other two supermarket chains were individual in nature. Examining data about labor law infractions issued by the labor ministry’s inspectorate (auditores fiscais do trabalho) compiled by CONTRACS researchers provides an additional cross-firm comparative window into a narrower scope of issues that come into play with such periodic unannounced store visits, which typically occur in response to some complaint. Below we note the ebbs and flows in the robustness of the national inspection system to provide some context. The data, shown in Table 4.4, cover slightly different periods for each firm, and do not indicate the number of violations per item; rather they only show if there was a violation or not in the respective category. The upshot is that there are fairly broad similarities in the infractions issued across Walmart, Carrefour, and GPA in the main areas of health and safety and conditions of work and employment covered by inspections. Of the nine different health and safety regulations on which infractions were detected, Walmart along with one or both of its key competitors had at least one infraction on five of them—lack of specialized services in safety engineering and workplace medicine, absence of individual protective equipment, unsafe installations or electrical services, ergonomics violations, and unsanitary or uncomfortable workplace conditions. In the area of machine and equipment safety, only Walmart had an infraction. In three areas—the functioning of the internal commission for accident prevention (CIPA), transport/storage/materials handling, and programs for the prevention of environmental risks—Walmart had no infractions while one or both of its competitors did have at least one. Broadly speaking, unsafe and unhealthy workplaces not compliant with government protections were a shared problem among the largest supermarket chains. Much the same was also true of irregular work schedule management (timecards, hours record-keeping, and so forth), lack of rest periods within or between shifts or a weekly day of rest, and absence of safety protections for minors (allowed if above 15 to be employed in certain functions for limited hours, but with particular age-specific health and safety protections by law). All three chains had infractions in all three of these areas. In one area—working hours—Walmart fared “better” than its competitors, which both had infractions while the American firm did not.

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Table 4.4 Comparison of labor infractions issued by government inspectors: Walmart and main competitors Company/aspect labor law Violation (X = yes or – = no) Health and safety Specialized Services in Safety Engineering and Workplace Medicine (NR-4) Internal Commission for Accident Prevention (CIPA-NR-5)♦ Personal protective equipment (NR-6) Programs for prevention of environmental risks♦ (NR-9) Installations and Electrical Services (NR-10)** Transport, Movement of Goods, Storage, Materials Handling♦ (NR-11) Machine and equipment safety* (NR-12) Ergonomics (NR-17)** Sanitary Conditions and Comfort in Workplace (NR-24)* Conditions of work and employment Work schedules (timecards, hours record keeping, etc.) Rest Breaks Protection for Work of Minors Working Hours♦

Walmart

Carrefour

GPA

X

X

–

–

–

X

X – X –

X X X X

X X

X X X

– X X

– – –

X X X –

X X X X

X X X X

–

*Only Walmart with infractions for this item **Only Walmart and one of two large competitors with infractions for these items ♦Walmart has no infractions while at least one of its competitors does for these items Sources The raw data were collected by CONTRACS (2016a) from labor inspection recors made available to it and compiled by the authors. The periods covered differ across the firms and are shorter for Walmart–-Carrefour (2005–2014), GPA/CBD (1999–2016), Walmart (2008–2016). Since the year of infraction and the number of infractions per item (if multiple) were not reported, only the incidence/nn-incidence of infractions rather than their intensity can be assessed through these data. A Portuguese summary of the content of each set of “regulatory norms” for health and safety, issued by the labor ministry, can be found at: Guia Trabalhista, n.d., http://www.guiatrabalhista. com.br/legislacao/nrs.htm. Accessed April 17, 2019

Overall, these infractions are likely the “tip of the iceberg” of the labor law violations detected and sanctioned. This is the case because the reach and the effectiveness of the national inspection system declined from the late 2000s—after a brief period of recomposition in the middle of the decade—and annual data on infractions in the commercial sector (not available from the mid-2000s to 2011) were erratic from year to year in data beginning in 2012. In 2007–2008, as alluded to in Table 4.1, the number of inspectors nationwide peaked, declining through the last

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annual data point available from this time period in 2012, and falling by 9.4 percent overall. Meanwhile, the number of establishments inspected per year fell continuously—overall by 24.8 percent comparing from 2007 to 2012 (Alejo et al. 2015, 142). A key indicator of effectiveness of inspections used by the Labor Ministry and endorsed by the ILO—the “rate of regularization of inspected firms,” which measures the share of labor law infractions issued that are actually corrected through followup—fell from an annual average of 85.8 percent over 2002–2008 to 81.4 percent in 2009, to 77.8 percent in 2010, 74.1 percent in 2011, and 71.8 percent in 2012 (Alejo et al. 2015, 142). The declining personnel of the sector (with new hires not keeping place with attrition through retirement or other means) together with an expanding formal sector in a fast-growing economy seemed to bite in terms of overstretching the inspectorate. Unfortunately, annual data on the number of infractions in commerce as a whole are only available for 2012–2014, when an astoundingly low 446 infractions were issued in a year in which the number of inspectors fell by over five percent nationwide (still making commerce the largest single violator of labor laws as gauged by inspections). Infractions grew to 51,392 in 2013, and 71,811 in 2014.44 A major exception to these trends, however, was an enforcement action against major labor law offenders in the state of Paraná (discussed further in Chapter 6) that resulted in Walmart being fined R$4 million (US$17.9 million at exchange rates of the time) in April 2014 and entering into an extrajudicial corrective action accord; the basis of the accord was over 5000 violations stretching across its 17 stores in that southern state, as summarized by the inspectors’ union: “1,832 cases of extending the workday or workweek affecting 464 workers, 2,059 cases of not granting an hour meal break impacting 706 workers, and 614 cases in which the rest period between shifts was less than 11 hours affecting 362 workers.” Such largescale collective enforcement actions, however, were more the exception than the rule given their resource-intensiveness.45 In sum, on the one hand, the labor inspection system had growing limitations—it played a secondary role to the courts, the size of fines was set within narrow administrative boundaries and typically smaller than damages arising from collective lawsuits, and the frequency and effectiveness declined toward the end of this period. Yet, on the other, it at least contributed to the legal scrutiny faced by Walmart and supermarket competitors. It is cases judged by courts and especially those

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brought by labor prosecutors, however, that represented greater costs in damages as well as certain legal costs, with attendant reputational and even bottom-line impacts. With the wider latitude to consider civil law issues expanding outside labor law per se, individual worker complaints and collective lawsuits filed in labor courts effectively put various aspects of the repressive familial “Walmart culture” effectively on trial—its disciplinary practices, its unusual motivational practices, and its aggressive searches and videotaping of workers. The U.S. firm stands out as a uniquely problematic and serial offender in these respects. At some point it might have been possible for the firm to dismiss legal damages as the “cost of doing business” and aggressively to appeal awards and rulings to higher levels—much as it has been known to do in the home country when facing legal or administrative determinations against it. Yet the disadvantages of such a strategy for the bottom line were increasingly palpable by the end of the period covered in this chapter. Moreover, while Walmart had largely escaped the negative press and public attention for over a decade and a half in Brazil that it had experienced in the United States with the growth of anti-Walmart community-labor networks, class action lawsuits, and the like in the early 2000s, by the first half of the 2010s the firm’s image in Brazil started taking a bruising—beginning to resemble much more the critical portrait of its detractors in the United States and some corners of the globe. To the extent this occurred, the creative agency of unions, workers, and prosecutors, and the professional behavior of courts and inspectors—all within a shifting institutional environment they helped foster—was clearly the central driver.

Demographics, Precariousness, and Walmart-Style Work Flexibility Patterns of legal contention as well as conflictual cooperation in labor– management relations at Walmart must be understood in relation to the company’s model of work flexibility as well as the demographics of its workforce. Based on our analysis of labor ministry payroll data for large retail establishments (from the Annual Register of Social Data, or RAIS, database), the workforce was increasingly more educated, albeit within a context of rising educational attainment in Brazil as a whole. By 2014, around 70 percent of workers in large retail establishments had at least completed high school, compared to around 45 percent in 2003. The

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steady increase in the share of female employees in larger supermarket chains such as Walmart resulted in women surpassing men in 2011 for the first time and with rough parity evident at the end of the period. At Walmart, 54.7 percent of employees were women as of the end of 2013, based on the company’s annual sustainability report (Walmart, Relatório 2014). This feminization of the workforce of larger retail firms was not correlated with major relative gains for women, however, and was in many ways paralleled by trends in the growing precariousness and feminization of large retail firm jobs in the global North in sectors such as supermarkets (Carré and Tilly 2017). While the gender gap in pay in large Brazilian supermarkets declined from 17.2 percentage points in 2003, it still remained a considerable 10.8 points in 2014, based on our review of labor ministry data from the RAIS series (Ministerio da Economia n.d.).46 Even if men and women in the same occupation were guaranteed the same wages and levels of increase by collective bargaining contracts, segmentation by occupation first reported by IOS (2000)—for example, women disproportionately working in lower-paying front-of-store jobs—meant a sizeable disparity remained. Overall, as the economy and consumption at lower- to middle-income levels grew and better-paying jobs became available in Brazil, male employment “migrated” to better-paying jobs in other sectors in manufacturing or higher-end services. Pay discrimination by race was also evident: broadly speaking, a gap in pay at large supermarkets on the order of 20–23 percent between the two consistently highestearning groups (whites and Brazilians of Asian descent) and the two consistently lowest-earning groups—blacks and pardos (mixed race)— persisted, based on our analysis of RAIS employment data. Walmart did not report separate data for the racial composition of its workforce. Increased schooling did not correspond to proportional increases in wages (discussed above) or job stability, generating a toxic brew of frustrated upward mobility expectations even as transience in employment undermined the sense of job identity and associational power of unions. There was a constant “churning” of workers reflecting high levels of external, or numerical, flexibility. Walmart only published its own numbers on turnover for the years 2009 and 2010, when the figure stood at 36.6 and 37.0 percent, respectively.47 Our analysis of overall turnover rates in large supermarkets (with 30 or more employees) calculated from RAIS employment data reveals high rates of turnover that increase steadily from a low of 33 percent in 2003 to 47 percent in 2008 and 45 percent

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in 2009, and then increase steadily from 50 percent in 2010 to an annual high of 53 percent in 2013, falling to 50 percent in 2014. As DIEESE notes in analyzing data from 2007 to 2012 for commercial workers as a whole, the share due to voluntary departures rose steadily from 19.5 percent in 2007 to 27.8 percent in 2012 and the proportion due to non-renewal of (atypical, or non-full-time) contracts increased steadily if modestly from 11.5 to 13.9 percent. The 2014 DIEESE study insightfully explains increasing voluntary quit rates as follows: Despite the good performance of the sector in the last years, there have been few improvements in working conditions….working hours remain long. Working on Sundays or holidays, staying on the job for a longer period than the contract specifies to guarantee more sales or better customer service and thus better wages are common features for these workers. Moreover, the demand for educational credentials [qualificação] has increased and, as in other sectors, the intensity of work has increased. (DIEESE 2015, 85)

Overall, the same study finds that consistently across the six years, commerce has the second highest turnover rates among major sectors in the Brazilian economy, behind only food and hospitality services (DIEESE 2015, 15). A more recent DIEESE study, capturing 2014 and disaggregating for retail, finds that fully 46.8 percent of the more than 2.5 million workers who lost or left their jobs that year had been in their positions for less than one year, and 20.6 percent for less than six months (DIEESE 2016, 11). The economic motives for employers behind dismissing workers while also taking on new hires is clear: in 2013, new hires in commerce on average made 94.0 percent of what dismissed or departing workers made, while that figure dropped to 92.8 percent in 2014 (DIEESE 2015, 9). The use of such non-full-time or “atypical” contracts—whose availability to employers stemmed from labor flexibility reforms adopted in the 1990s and discussed in Chapter 3—was not uncommon. It is emblematic of significant (and likely increasing) levels of employment, or contractual, flexibility. While Walmart did not publish such information consistently, it revealed that at the end of 2013 it employed in Brazil 72,652 full-time employees (“indefinite-term” or “permanent”), 2718 on atypical contracts (fixed-term, temporary, or part-time), 67 interns,

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and 38 trainees (Walmart, Relatório de Sustentabilidade 2014). Of significance is the growing use of atypical workers amidst closing of stores (and opening of some others) and sluggish sales by end-2014, as the number of full-timers remained roughly stable (72,744) along with the number of interns (61) and trainees (33). The number of part-timers grew significantly (to 4288) and 2722 workers were employed as apprentices (contracts reserved for 15–24-year-olds for up to two years that must pay at least the minimum wage) (Walmart, Relatório, 2015). The illegal subcontracting of core activities noted in the lawsuit damages mentioned above is also relevant here, suggesting externalization as an additional means by which Walmart pursued flexibility. The shift to a more contingent workforce in such a short period is remarkable. We lack time-series or historical data to judge to what extent reliance on lower-cost, easier to “adjust” atypical workers, or outsourced work, grew in the previous years. In larger comparative perspective, the levels of flexibility in modalities of direct and indirect employment were moderate during this period in comparison to the high levels of dualization found at Walmart in some other countries in the global South (for instance, South Africa48 ) as well as some countries in the North (the United States and United Kingdom). The perceived economic advantage of relying on the modalities of atypical contracts available at the time in Brazil (generally seen as limited by observers) may have been outweighed by the advantages of the aforementioned high external or numerical flexibility enjoyed by the firm under Brazilian labor market institutions as well as (discussed below) high levels of working-time flexibility. With employment levels not regulated by collective bargaining contract in the sector and with severance costs increasing proportionately with length of job tenure through Brazil’s Fundo de Garantia por Tempo de Serviço (FGTS, or Guarantee Fund by Length of Service),49 incentives were weighted heavily toward adjusting workforce size by keeping workers on for often short tenures. One aspect of this external flexibility was the relative ease with which stores were closed and workers dismissed with no negotiations over additional severance, relocation of any workers, or other terms of workforce reductions, such as in 2013 when 25 stores were closed (Walmart, Relatório, 2015). In such instances, workers simply received 30 days advance notice or equivalent pay and had access to the money accumulated in their FGTS severance accounts (whether they took it immediately as severance or not); if they had worked at least six months (in a formal-sector job) in the previous 36 months and were dismissed

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without cause, they were also eligible for unemployment insurance (UI) benefits.50 UI was a slender cushion for a minority of workers, so losing a Walmart job represented a hardship for many. Breaking down data on UI benefits over the 2009–2014 period, DIEESE (2016) found that the supermarket and hypermarket segment was the four largest of all economic segments in terms of numbers of applicants, with a total of 1.2 million—an amazing 40.9 percent of whom had solicited the benefit on two or more occasions. Over that period the average replacement rate of previous income for commerce as a whole (no further breakdowns were given) was 81.9 percent, with very little annual variation (DIEESE 2015, 2016, 22). (Benefit levels were based on the average of the previous three months’ pay). However, the short duration of benefits as well as the previously noted high rates of turnover in the first year of employment, which limited eligibility, together meant that UI was not much of a lifeline. Without six months of wage labor over the previous two years (fairly common since retail workers were known to criss-cross the formal and informal sectors), workers were ineligible for the benefit in principle; this meant that the 20.8 percent of all workers who were fired without cause or left their jobs over 2009–2014 would likely get nothing. Further, another 25.8 percent whose job tenure was cut short between six months and one year (assuming this was their only formal job over the two years previous to dismissal), would have received only three monthly UI checks. Meanwhile, those on the job for one year up to two years (another 24.2 percent of all those losing their jobs) would have received only four monthly benefits, with the remainder (two years and above on the job) receiving five. To put this economic hardship into perspective, we recall the near-poor situation of Walmart and other supermarket sector in terms of the “vulnerable” category to which supermarket workers belong in income terms—by definition, likely to experience poverty at some future moment. Losing their job (in 80 percent of cases involuntarily, as noted above) would likely qualify as one of the different situations that could send such individuals and their households (back) into poverty. In addition to moderate employment (contractual) flexibility that was increasing over time, and continued high levels of external flexibility, our research uncovers evidence of medium–high working-time flexibilit y—reflecting some moderate improvements in union voice on flexible scheduling after 2007 yet with continued problems in legal compliance. Under the hours bank system allowed under legal reforms

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in the late 1990s, workers could be asked to work more than the standard eight-hour workday, or more than the legal maximum of 44 hours per week, without receiving an overtime premium, provided that they were compensated over some designated period of time (one year was the default in the original legislation) with shortened days or days off. The basic principle is that working hours “even out” over the course of the time period, with pay not altered but following a standard timetable. The hours bank scheduling system is only perhaps a small degree less disrespectful of workers’ control over their leisure and family time and other responsibilities than the company’s much-criticized U.S. practice of constantly shifting schedules set by demand-tracking software, which it only recently moved to reform in November 2018.51 In 2007 the TST ruled that the hours bank could no longer be written into individual labor contracts, and must be instead be instituted by employers wishing to follow this practice in collective bargaining contracts or firm-union agreement (see Table 4.1). This gave unions some negotiating leverage. For example, the conservative union in Bauru had a four-month compensation schedule in its 2013–2014 collective bargain encompassing Walmart and other large retailers in the city.52 Meanwhile the progressive Osasco union had a similar clause in its 2013–2014 collective agreement along with a limit of 100 hours of accumulated hours beyond the standard workweek for any individual worker at any given time (with a 60 percent overtime premium for any hours worked beyond these limits); the Osasco contract also provided for a suspension of the system should an employer violate any of its terms (including furnishing a monthly statement of each employee’s hours worked and “debit” in hours owed or “credit” in time off due) as determined by labor ministry officials.53 Despite some progress in negotiating the hours bank, in practice the system, and working hours more generally, were subject to considerable managerial discretion and coercion, as noted above in demands raised in strikes and protests as well as to some extent in the labor inspection infractions noted in Table 4.4 and the catalogue of legal violations related to psychological harassment cases. Not granting required rest breaks within or between shifts; nonpayment or underpayment of overtime premiums when work exceeded the limits of the respective hours bank system in place; failures in record-keeping such as broken timeclocks or other devices for keeping track of individual workers debit and credit hours were all commonplace. In general, commercial workers were

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the most overworked of all major sectors of the Brazilian labor force: Overall, average annual workweek length in 2013 and 2014 was consistently higher for each of the five of largest metro areas in the country across three regions (in all of which Walmart operated) than those for the three other major sectors of the urban economy (services, manufacturing, construction) (DIEESE 2015). In addition to working-time flexibility, available evidence from union critiques of company practice as well as lawsuits indicates moderate to high levels of horizontal, or functional, flexibility—an element of continuity with early Walmart practices in the country, as well as consistent with home-country and core corporate HRM practices. Charges of “desvio de funções ” (literally, deviation from job category)—such as those noted above in the 2013 strikes at Walmart stores in Limeiras and Pacaembu/São Paulos stores—like requiring cashiers or baggers to stock shelves or sweep floors in addition to running registers or bagging groceries were common. These violations of contractual occupational categories showed up as the subject of individual or collective legal actions. Generally speaking, the job categories were broad and few at Walmart and other supermarkets, and the wage levels into which they were grouped even fewer, as revealed by collective bargaining contracts referenced above: “general employees” (a catch-all category), cleaning/janitorial staff (faxineiro), copeiro (cupbearers or workers who serve coffee), cashiers, office boys, baggers, vendors (who sell on commission), and in some cases auxiliaries or trainees. Crosscutting all these areas of considerable and sometimes heightened flexibility at Walmart are intensification of work, unsafe and unhealthy working conditions, and repressive workplace culture and discipline. Regarding work intensity, the fact that the company was squeezing more out of its workforce even in boom times is underlined by the 2011–2012 period as an example, using data from the ABRAS supermarket association analyzed by DIEESE (2013, 5): with a meager 1.0 percent net increase in number of employees and a five percent increase in number of stores (with the net opening of 26 new stores) as well as modest increases in store selling space (3.6 percent) and number of checkouts (2.9 percent), revenues per employee were up a whopping 9.4 percent year-on-year and revenues per checkout rose by 7.4 percent. The number of employees per store fell 3.8 percent and of employees per square meter of sales space declined by 1.8 percent. While a small fraction of this is explained by the opening of some new smaller format stores, for the most part it is

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indicative of forcing existing workers to do more. This intensification of work involved, paired with the discussion above, asking workers to take on more tasks outside their job category and work long and variable hours, not to mention the constant state of insecurity given the frequency of dismissals even amidst overall new job creation—as well as a constant looming rational calculation for Walmart workers that better-paying or at least less stressful work may be available elsewhere in commerce or (while sacrificing formal-sector social benefits) in the informal economy. At 43 percent on average for this two-year period, turnover in the super and hypermarket segment as a whole was higher than in any other sector of the economy (DIEESE 2013). It is not happenstance then, that deficiencies in health and safety are reflected in inspection reports, lawsuits filed by labor prosecutors, and individual worker claims. Some of these also had to do with struggles over enforcement of new health and safety legal norms that were adopted by the Labor Ministry during the period covered by this chapter; a prime example is Norma Reguladora No. 17, the Annex 1 of 2007 of which established extensive provisions regarding ergonomic standards for cashiers and those working at checkout counters (such as the right to be seated on the job); Annex II established similarly extensive standards for telemarketing and telephone customer service (call centers), which were relevant to the then nascent e-commerce operations of the supermarket sector including Walmart, among others. If long, unpredictable and/or shifting hours and unsafe working conditions were a shared problem in the large supermarket sector, Walmart stood out for its disciplinary and motivational practices. Defying Carré and Tilly’s (2017) maxim about Walmart around the world as just another problematic employer, bad supermarket jobs were, indeed, worse at the U.S. firm in Brazil—they subjected vulnerable, low-wage workers to forced participation in rituals that many found inappropriate and degrading, intimidating and intrusive physical searches that invaded privacy, and humiliating forms of public punishment and discipline in the workplace in front of peers and customers. The cheer was part of a more general effort to inculcate in employees a sense of familial loyalty to the firm, of commitment to serving customers as their overwhelming focus, and to blur lines of authority with supervisors and other managers. These bosses also took part in this ritual and generally dressed informally so as not to stand out from workers. The repressive aspects of this “family” atmosphere are underlined by practices of publicly identifying and shaming those employees found by managers

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to be slacking or insubordinate, as peer pressure was mobilized by supervisors against non-conformist behavior. In addition, in meetings designed to foster “team-building,” workers were frequently asked to share intimate details from their private lives. These practices have been analyzed in great detail in ethnographic and qualitative interview-based research in the United States (Reich and Bearman 2020; Dunnett and Arnold 2006). Yet even in their absence in Brazil with stores tightly monitored by (outsourced) security guards and surveillance cameras, the evidence from legal complaints and judicial decisions and from denunciations by union leaders is that the firm persisted in its efforts to inculcate the “Walmart way” among its Brazilian workforce. This is a unique and egregious aspect of HRM by Walmart among foreign and domestic supermarkets in Brazil. Evidence from qualitative store-level research on work relations at rival Carrefour reveals a more traditional hierarchical regimentation, without the same kind of “social engineering” trying to reshape the loyalties and identities of workers (de França Júnior 2010). Walmart makes much in its annual report of its practice that is analogous to that found at Walmart operations in other countries—namely, promoting from within in terms of the lower levels of supervision and management. The upshot is that that the few who are enticed to “buy-in” and exhibit other leadership qualities are promoted to lower-level supervisory positions and in turn become transmission belts for self-styled “Walmart culture.”

Conclusion From the early 2000s through the middle of the 2010s, Brazil’s evolving and in some ways thickening web of labor institutions opened up new opportunities that union and governmental actors took advantage of to try to scrutinize Walmart and to alter its behavior or at least punish its transgressions. A space for negotiation and consultation was carved out by unionists from results- and profit-sharing regulations. The expanding company acquiring a national footprint was willing to go along to try to limit conflict as well as to rationalize and standardize a legally required practice it would otherwise have to conduct in a decentralized, fragmented fashion. Yet labor institutions were still imperfect and full of holes, and creative agency could only go so far. Lacking structural power in a high-turnover, low-skill segment and the ability to gain associational power in the workplace as workers in some heavier manufacturing sectors had done,

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unions were handicapped by the absence of legal reform mandating workplace representation under a Workers Party that initially held out such promises. While gains could be made in real wages through collective bargaining and additional improvements were possible through direct bargaining with the company over results sharing, they were undermined by high turnover and short employment tenure, with a constant churning of workers. Such modest gains owed much to conjunctural economic and wage-policy trends, and of crucial importance the ability to gain real traction on myriad types of workplace abuses by the company was severely constrained. Both collective action and legal strategies came into play in trying to seek even elemental contract and labor law compliance. A combination of factors whose relative importance is difficult to parse seemed to explain the almost paradoxical persistence of patterns of LR/HRM and workplace supervision that (as will be analyzed further in Chapters 6 and 7) were generating tangible costs as well as legal conflict— the weight of the “Walmart way” in organizing work and treating workers, the incentives pushing store managers to cut costs through intensification of work, and conflicts and lack of smooth integration between corporate HR and store-level HR and supervisors. Multiple, sometimes intersecting angles were pursued by unionists in terms of promoting legal versus direct action and exploring traditional and new bargaining avenues in trying to seek compliance with labor law and contractual terms. They continuously groped to find ways of dealing with a firm that was growing and making some signs of engaging with them differently but demonstrably not changing its everyday ways of treating workers. Picking up on union and worker claims and denunciations, meanwhile, labor prosecutors newly attuned to problems in the large supermarkets and resourceful as well as momentarily empowered labor inspectors took legal actions that put Walmart in the dock, literally and figuratively. These actions were not unique to Walmart among large employers or among large supermarket chains in terms of cutting corners on health and safety, breaks, and working time. Yet particular legal challenges were raised regarding disciplinary or norm-inculcation tactics distinctive to the global firm’s well-documented practices and legal challenges elsewhere—the Walmart cheer—and heavy-handed, intrusive practices in searches and discipline. Amidst these challenges to its labor practices, and as the firm expanded in Brazil, it was largely “business as usual” for the company—in considerable contrast with its efforts to adapt to Brazil’s markets and institutions

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in supplier relations, pricing, and cast a better image through CSR initiatives. There was no public recognition of crisis in employment relations, even amidst unusually public and specific condemnations of its behavior by labor judges normally known for their circumspection. No notable efforts were put into place to secure legal compliance. If the company was in many ways embattled on the labor front—by latent conflict and legal pushback more than sustained, overt conflict—it never acknowledged as much or acted in a way that suggested it was searching for an answer. PLR negotiations paired with a forum for unionists to air their litany of grievances were by no means a coherent or effective response, to the extent management or some portion thereof perceived them in that fashion. Good economic times for Brazil and its supermarket sector and dynamic growth of overall revenues and the company’s national footprint fundamentally concealed problems that would come to haunt the company in more clear and even stark ways starting in 2015, as discussed in Chapters 6 and 7. Before turning to that, we will shift attention toward comparisons with the company’s labor relations elsewhere in Latin America, the focus of Chapter 5.

Notes 1. The Gini coefficient of income inequality (where 1.0 equals perfect inequality and 0.0 pefect equality) fell from 0.57 in 2002 to 0.53 in 2008 to to 0.51 in 2014. ECLAC (2019, 14). According to graphs in the same source, extreme poverty fell by an annualized rate of about 2 percent over 2008–2012 while poverty as a whole fell at a rate of about 8 percent over the same period (p. 81). 2. Authors’ calculations based on company figures summarized in Statista, “Walmart’s net sales worldwide from 2008 to 2019, by division (in billion U.S. dollars).” https://www.statista.com/statistics/269403/net-sales-ofwalmart-worldwide-by-division/. Accessed September 24, 2020. 3. Brad Haynes and Nathan Layne, “Insight: Lost in Translation—Wal-Mart Stumbles Hard in Brazil,” Reuters , February 17, 2016, https://www.reu ters.com/article/us-walmart-brazil/insight-lost-in-translation-wal-martstumbles-hard-in-brazil-idUSKCN0VQ0EQ. Accessed May 1, 2019. 4. Associação Paulista de Supermercados (APAS), “Walmart Transfere Três Areas de sua Aede para Porto Alegre,” May 26, 2010, http://portalapas.org.br/walmart-transfere-tres-areas-de-sua-sedepara-porto-alegre/. Accessed April 7, 2019.

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5. Progressive Grocer, “Wal-Mart Drops Request to Trademark ‘EDLP’,” March 27, 2007. https://progressivegrocer.com/wal-mart-drops-requesttrademark-edlp. Accessed January 27, 2019. 6. MarketWatch, “Walmart Pitches ‘Everyday Low Prices’ Overseas,” June 1, 2011, https://www.marketwatch.com/story/wal-mart-pitches-everydaylow-prices-overseas-2011-06-01. Accessed January 27, 2019. 7. Walmart México y Centroamérica, Company Overview (BMV: Walmex), March 31, 2016, p. 7. https://doi.org/10.15173/glj.v10i1.3796. Accessed January 31, 2019. 8. A good definition is provided by the website Accounting Tools: “Highlow pricing is the practice of setting the price of most products higher than the market rate, while offering a small number of products at belowmarket prices. By doing so, a retail or web store location hopes to attract customers with its low-price offerings, at which point they will also buy some of the high-price items. The seller hopes that the net effect of this strategy is to increase overall profitability, despite incurring losses on the few low-priced items.” “High-Low Pricing,” June 9, 2018, https://www.accountingtools.com/articles/2017/5/16/highlow-pricing. Accessed January 31, 2019. 9. See Vandenbergh (2007). 10. The term is used by the sponsoring organization, Consumer Goods Forum, in its PowerPoint presentation “The Global Social Compliance Programme,” June 2010, http://www.oecd.org/daf/inv/mne/456 34152.pdf. Accessed September 24, 2020. Dicken (2015, 361) uses the GSCP as an example of “[c]odes devised by individual TNCs, or groups of TNCs” as part of a larger discussion of types of codes of conduct. 11. Interview with Scott B. Martin, May 19, 2010, São Paulo. 12. Conceding registration requires “affilation of at least 100 unions distibuted among the country’s five región; afilliation of at least 20 unions each in at least three regions; affilation of unions in at least five sectors of economic activity; affilation of unions that represent at least seven percent of the unionized employees nationwideFernando Augusto Melo Colussi,” O Papel das Centrais Sindicais no Modelo Sindical Brasileiro, 2015, https://fernandocolussi.jusbrasil.com.br/art igos/183903725/o-papel-das-centrais-sindicais-no-modelo-sindical-brasil eiro. Accessed October 5, 2020. 13. Social Democracia Sindical (SDS, or Labor Social Democracy), and Central Auónomo dos Trabalhadores (CAT, or Autonomous Workers Central) were two organizations that merged into the newly created UGT. See União Geral dos Trabalhadores, “Histórico,” n.d., http://www.ugt. org.br/Historico. Accessed April 9, 2019. 14. Ministério do Trabalho e Emprego, Gabinete do Ministro, “Apuração das Centrais Sindicais que Atenderam aos Requisitos da Lei nº 11.648, de 31

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17. 18. 19.

20. 21.

22. 23. 24.

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de março de 2008,” August 6, 2008. Site archived November 8, 2018. https://web.archive.org/web/20181108010921/http://trabalho.gov. br/images/Documentos/SRT/AfericaocentrFecomerciáriosoficializafilia çãoaUGTais/Despacho_20080331.pdf. Accessed February 11, 2018. Authors’ calculations of averages based on national household survey data compiled by Alejo et al. (2015, 146). Average for 1999–2003 excludes 2000 where data were unavailable. Sindicato de Comerciários de São Paulo, “Fecomerciários Oficializa Filiaao à UGT,” December 2, 2014, http://www.comerciarios.org.br/Fecomerci arios-oficializa-filiacao-a-UGT. Accessed February 12, 2019. CONTRACS, “Carrefour: Truculência com Trabalhadores Dentro e Fora da Empresa,” January 1, 2011. Accessed February 16, 2019. CONTRACS, “Historico,” http://www.contracs.org.br/conteudo/33/ historico. Accessed July 30, 2021. This section builds on documents and meeting notes accessed in CONTRACS archives in 2015–2016 fieldwork. For more detailed discussion, see Galhera et al. (2018, 52–54). Lucilene “Tudi” Binsfield, interview with Katiuscia G. Moreno, São Paulo, July 15, 2018. CONTRACS, “Wal-Mart Paga 2 Bilhões de Dólares de Bônus a Trabalhadores nos EUA,” January 11, 2011, http://www.contracs.org.br/ noticias/5946/wal-mart-paga-2-bilhoes-de-dolares-de-bonus-a-trabalhad ores-nos-eua. Accessed April 10, 2019. See DIEESE, Balanco das Greves, for the respective years. Authors’ calculations from graph in Trópia (n.d.), who draws on DIEESE strike data time series. União Geral dos Trabalhadores (UGT), “UGT apoia comerciários de Limeira e paralisa atividade no Walmart,” January 27, 2013, http:// www.ugt.org.br/index.php/UGT-apoia-comerciarios-de-Limeira-e-par alisa-atividade-no-Walmart. Accessed April 14, 2019; and Sindicato de Comerciários de Campinas, “Greve no Walmart Limeiras,” January 31, 2013, https://www.youtube.com/watch?v=w-tiiRrPnxg. Accessed April 14, 2019. Sindicato de Comerciários de Osasco e Região (SECOR), “SECOR Protesta em frente Walmart,” February 28, 2013, http://www.secor.org. br/secor-realiza-protesto-em-frente-walmart/. Accessed April 14, 2019. UNI Global Union Américas, “A UNI Américas se Mobiliza em Defesa dos Trabalhadores Frente às Empresas Multinacionai: Paralisação no Walmart Pacaembu em São Paulo, Brasil,” May 2013, http://docplayer. com.br/17397103-A-uni-americas-se-mobiliza-em-defesa-dos-trabalhad ores-frente-as-empresas-multinacionais-paralisacao-no-walmart-pacaembuem-sao-paulo-brasil.html/. Accessed April 14, 2019.

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27. Sindicatos dos Comerciários de Osasco e Região (SECOR), “Sindicato dos Comerciários Reúne-se com epresentante do Walmart,” May 14, 2013, http://www.secor.org.br/sindicato-dos-comerciarios-reaonese-com-representante-do-walmart/. Accessed April 14, 2019. 28. Sindicato dos Comerciários de Osasco e Região (SECOR), “Aliança Sindical Global Realiza Manifestação em Frente ao Walmart de Pacaembu,” September 1, 2014, http://www.secor.org.br/aliana% C2%A7a-sindical-global-realiza-manifestaa%C2%A7ao-em-frente-ao-wal mart-do-pacaembu/. Accessed April 14, 2019. 29. InvestorPlace, “Wal-Mart to Close 50 Stores in China, Brazil,” October 16, 2013, https://investorplace.com/2013/10/walmart-close-25-chinastores/. Accessed April 14, 2019. 30. Rede de Trabalhadores e Trabalhadoras do Walmart/Brasil-UNI, public letter to Walmart Brazil CEO Guilerme Loureiro, October 18, 2013, http://contracs.org.br/sistema/ck/files/nota%20walmart.pdf. Accessed April 14, 2019. 31. For instance, for the São Paulo union (SECSP/UGT), see http:// www.comerciarios.org.br/index.php/Denuncia. For the Osasco union (SECOR/CONTRACS-CUT), see http://www.secor.org.br/denunciarabuso/. 32. Interview with Katiuscia M. Galhera, São Paulo, July 12, 2014. 33. Store information by state is from Walmart, Relatório de Sustentabilidade 2016, Exercício 2015. 34. Adriana Mattos, “Ações Trabalhistas no Brasil Prejudicam Balanço do Walmart,” Valor Econômico, November 16, 2012, https://www.valor. com.br/empresas/2905834/acoes-trabalhistas-no-brasil-prejudicam-bal anco-do-walmart. Acccessed April 16, 2019. 35. Brad Haynes and Nathan Layne, “Insight: Lost in Translation—Wal-Mart Stumbles Hard in Brazil,” Reuters , February 17, 2016, https://www.reu ters.com/article/us-walmart-brazil/insight-lost-in-translation-wal-martstumbles-hard-in-brazil-idUSKCN0VQ0EQ. Accessed April 16, 2019. 36. TRT-Federal District and Tocantins, “Responsabilidade civil: Walmart é condenado por práticas motivacionais que obrigam empregado a rebola,” August 26, 2011, https://www.trt10.jus.br/ascon/?pagina=showNoticia. php&ponteiro=39909. Accessed January 31, 2019. 37. O Globo, “Justiça do DF condena rede Walmart por obrigar funcionário a rebolar: Confira a íntegra da nota do Walmart,” September 5, 2014, http://g1.globo.com/distrito-federal/noticia/2014/09/justica-do-dfcondena-rede-walmart-por-obrigar-funcionario-rebolar.html. Accessed April 21, 2019. 38. Luiz Flávio Gomes, “Assédio moral: ausência de lei afeta trabalhador, empresa, empreendedorismo e crescimento econômico,” Estado de São Paulo, March 9, 2019, https://politica.estadao.com.br/blogs/fausto-

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41.

42.

43.

44.

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47.

48. 49.

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macedo/assedio-moral-ausencia-de-lei-afeta-trabalhador-empresas-empree ndedorismo-e-crescimento-economico/. Accessed April 19, 2019. Along similar lines, see Marcia Kazenoh Bruginski, “Assédio Moral no Trabalho. Conceito, Espécies e Requisitos Caracterizadores,” Assédio Moral e Assédio Sexual, Revista Eletrônica, 2013, 29–41, http://www.mpf.mp. br/pgr/documentos/assediomaoralesuaprevenotrilho1_2.pdf. Accessed February 23, 2019. 20ª Vara do Trabalho de Brasília—DF, Proc. No. 0000320– 06.2011.5.10.0020, http://www.tst.jus.br/processos-do-tst. Accessed March 15, 2019. CONTRACS, “Cartilha sobre o Assédio Moral,” 2nd edition, May 2006, http://www.contracs.org.br/publicacao/42/cartilha-sobre-oassedio-moral-2-edicao. Accessed April 19, 2019. Tribunal Superior do Trabalho, Proceso 0,001,310–54.2011.5.10.0001, 2011. http://www.tst.jus.br/processos-do-tst. Accessed January 15, 2019. See, for instance, Tribunal Regional do Trabalho, 8a Região-Distrito Federal e Tocantins, “Supermercado é Condenado a Pagar R$800 mil por Revista Intima em Empregados,” October 23, 2019, https://www. trt10.jus.br/ascon/?pagina=showNoticia.php&ponteiro=42546. Accessed October 5, 2020. Rede TVT, Central Única dos Trabalhadores, “Funcionários do Walmart pProtestam contra Desrespeitos Trabalhistas,” August 28, 2014, https:// www.youtube.com/watch?v=l0zUSm1Zvcg. Accessed April 21, 2019. Ministério do Trabalho e Emprego, Sistema de Inspecção do Trabalho, Radar da Inspecao do Trabalho, https://www.sit/gov.br/radar. Accessed April 23, 2019. Sindicato Nacional dos Auditores Fiscais do Trabalho, “Paraná Auditores-Fiscais Constatam Mais de Cinco Mil Irregularidades em Rede de Supermercado,” June 13, 2014, https://www.sinait.org.br/site/not icia-view/?id=9525/paranaauditores-fiscais-constatam-mais-de-cinco-milirregularidades-em-rede-de-supermercado. Accessed October 5, 2020. The data set is based on payroll records, and stands for annual register of social information (Relação Annual de Informação Social ). The general website is: http://www.rais.gov.br/sitio/index.jsf. Walmart, Relatório de Sustentabilidade 2010, Exercício 2009, p. 83 and Walmart, Relatório de Sustentabilidade 2011, Exercício 2010, not paginated. See Ryklief (2017) and Kenny (2018) on South Africa. Under the FGTS system, “[e]mployers must give workers a one-month advance notice, a redundancy fine of 40% of the amount deposited in their seniority account to the worker and additional 10% to the government.” (Carvalho et al. 2018, 158). The worker can take the money as severance,

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51.

52.

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or maintain the balance toward withdrawal upon retirement or for certain designated circumstances like a home purchase. Carvalho et al. (2018) describe the UI eligibility and benefits in place through 2015 as follows: “UI potential duration [for layoffs without cause] depends on accumulated tenure across all registered jobs in the 36 months prior to the layoff. Workers are eligible for 3, 4 or 5 monthly paid benefits if theyhad respectively 6 to 11, 12 to 23, or more than 24 months of accumulated tenure including a one-month advance notice period. Benefit levels are based on the average wage of [the] last three month sand range from 1 to 1.7 minimum wages. Replacement rates are full at the bottom and decrease with wage. Workers cannot withdraw UI payments if reemployed” (158). A new app called My Walmart Schedule “allows employees to see schedules, swap shifts with coworkers and select unfilled shifts to work. It allows employees to adjust schedules quickly if plans change… And to give workers more consistency, the system makes use of a scheduling method called “core hours.” Employees on a core-hour schedule work the same weekly shifts for at least 13 weeks …” HR Drive, Walmart announces predictive scheduling for all US stores, November 14, 2018, https://www.hrdive.com/news/walmart-announces-predictive-sch eduling-for-all-us-stores/542188/. Accessed April 25, 2019. For instance, in the 2013–2014 contract for the city of Bauru in the interior of São Paulo, the contract limits itself to specifying that firms must opt into the system set up under law, how records are kept, that workers can not lose pay for the period they were hired based on having worked more or less on average than the standard workweek, and that additional hours must be compensated with time off within a period of four months. SINCOMERCIO Bauru and SINCOMERCIARIOS Bauru, “Convencão Coletiva do Trabalho, 2013–2014,” http://www.secbau.com.br/files/ CCT%20BAURU%202013-2014.pdf. Accessed February 26, 2019. Sindicato dos Empregados no Comércio de Osasco e Região and Sindicato do Comércio Varejistas de Osasco e Região, “Convenção coletiva do trabalho, 2013/2014,” October 18, 2013, http://www.secor.org.br/ download/CCTVarejista_112013.pdf. Accessed April 27, 2019.

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Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher, 181–198. Austin: University of Texas Press. Haslam, Paul Alexander. 2004. “The Corporate Social Responsibility System in Latin America and the Caribbean.” Canadian Foundation for the Americas (FOCAL). Ottawa. https://www.focal.ca/pdf/csr_Haslam-FOCAL_corpor ate%20social%20responsibility%20system%20Latin%20America%20Caribbean_ March%202004_FPP-04-1.pdf. Accessed January 27, 2019. Hochschild, Arlie R. 1983. The Managed Heart: Commercialization of Human Feeling. Berkeley: University of California Press. Instituto Observatório Social (IOS). 2000. “Relatório Geral da Observação WalMart Brasil Ltd.” Florianópolis, Brazil. Kenny, Bridget. 2018. “Walmart and Labor Conditions in South Africa: Local Retailing, Contract Labor, and Union Challenges.” In Walmart in the Global South: Workplace Culture, Labor Politics, and Supply Chains, edited by Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher, 64–86. Austin, TX: University of Texas Press. Krein, José Dari, and Hugo Dias. 2018. “The CUT’s Experience during the Workers’ Party Governments in Brazil (2003–2016).” Global Labour Journal 9: 199–214. Martin, Scott B. 2006. “Paths and Obstacles on the Road from State Corporatism: Reforming Labor Regulation in Contemporary Brazil and Mexico (A Thinkpiece).” Paper Presented at the Congress of the Latin American Studies Association (LASA). San Juan, Puerto Rico. Ministério da Economia. n.d. RAIS (Relação Anual de Informações Sociais). http://www.rais.gov.br/sitio/index.jsf. Accessed March 18, 2019. Reich, Adam, and Peter Bearman. 2020. Working for Respect: Community and Conflict at Walmart. New York: Columbia University Press. Rodrigues, Iram Jácome, José Ricardo Ramalho, and Jefferson José da Conceição. 2008. “Relações de trabalho e sindicato no primeiro governo Lula (2003–2006).” Artigos e Ensaios. Ryklief, Sahra. 2017. “Retail and Hospitality Workers in South Africa: Organized by Trade Union of Formal Workers to Demand Equal Pay and Benefits.” In Informal Workers and Collective Action: A Global Perspective, edited by Adrienne E. Eaton, Susan J. Schurman, and Martha Chen, 47–70. Ithaca, NY: Cornell University Press. SenadoNoticias. 2013. “Regulamentação da profissão de comerciário é publicada,” March 18. https://www12.senado.leg.br/noticias/materias/2013/ 03/18/regulamentacao-da-profissao-de-comerciario-e-publicada.ccessed. Accessed April 3, 2019. Soares, Fábio Veras, Rafael Perez Ribas, and Rafael Guerreiro Osório. 2010. “Evaluating the Impact of Brazil’s Bolsa Familia: Cash Transfer Programs in Comparative Perspective.”Latin American Research Review 52 (2): 173–190.

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Streeck, Wolfgang. 1992. “Training and the New Industrial Relations: A Strategic Role for Unions?” In Future of Labour Movements, edited by Marino Regini. London: Sage. Tilly, Chris. 2006. “Wal-Mart in Mexico: The Limits of Growth.” In Walmart: The Face of 21st Century Capitalism, edited by Nelson Lichtenstein, 186–209. New York: New Press. ________. 2007. “Walmart and Its Workers: Not the Same All Over the World.” Connecticut Law Review 39 (4): 1–19. Tribunal Superior do Trabalho (TST). 2012. “Resolução n. 186, de 14 de setembro de 2012.” Juslabori, September 25. https://juslaboris.tst.jus.br/han dle/20.500.12178/26557. Accessed April 3, 2019. Trópia, Patrícia Vieira. n.d. “Resistências e Mobilizações dos Trabalhadores no Comércio no Brasil.” Universidade Federal de Uberlândia. Unpublished paper. Vandenbergh, Michael P. 2007. “The New Wal-Mart Effect: The Role of Private Contracting in Global Governance.” UCLA Law Review 54. https://www.uclalawreview.org/the-new-wal-mart-effect-the-role-of-pri vate-contracting-in-global-governance/. Accessed February 8, 2019. Veiga, João Paulo Cândia, and Scott B. Martin. 2009. “Corporate Employee Representation, Union Strategies, and Third-Party Union-Linked Monitoring: Germany’s BASF in Brazil as a Critical Case Study.” Labor Studies 34 (3): 363–384. Visser, Jelle, Susan Hayter, and Rosina Gammarano. 2017. “Trends in Collective Bargaining Coverage: Stability, Erosion or Decline?” Geneva: International Labour Office, Issue Brief #1. Walmart Brasil. 2008–2014. Relátorio de Sustentabilidade. https://www.walmar tbrasil.com.br/sobre/walmart-no-brasil/. Accessed March 18, 2019.

CHAPTER 5

Divergent National Patterns of Labor Contestation Surrounding Walmart: Comparisons with Argentina, Chile, and Mexico

Abstract Testing and illustrating the analytical framework developed for Walmart Brazil, a most similar systems comparative examination of Walmart’s labor contestation trajectory is presented for the three other largest national market where the company operated in Latin America. Repressive familialism and anti-unionism are underlined as core, invariant aspects of Walmart labor relations/human resource management strategy across countries and regions. Broad trends are contrasted with minimal labor contestation (Mexico), modest or limited contestation (Argentina), and significant contestation similar to the levels of Brazil post-2003 (Chile). Gradual institutional change theory and nested agency explain how union and regulatory actors were empowered or enfeebled, and maneuvered in reacting to or confronting the company, all within shifting or static national and national-sectoral institutions of employment relations and labor justice. Keywords Labor contestation · Gradual institutional change · Institutionally nested agency · Most similar systems research design · Union density · Labor center

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_5

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How well does the analytical framework from Chapter 2 and case study analysis of Brazil from Chapters 3 and 4 travel elsewhere in the Latin American region where Walmart operates? Is Walmart Brazil’s experience unique, or does it fit into broader patterns? The focus shifts to the three other largest national markets in which Walmart has operated in the region. Two of them are more or less contemporary to Brazil in terms of the time of market entry (Mexico in 1991, Argentina in 1995), while the third reflects a more recent moment in Walmart’s global expansion (Chile in 2008). In Mexico, the company quickly became the largest player in the supermarket segment and has been its largest single private employer since the early years of the century. This pattern is somewhat mirrored by its much later rapid assumption of market leadership in Chile. By contrast, the company entered as a second-tier competitor in Argentina and Brazil, reached and remained within the top three in Brazil by the turn of the century, but only belatedly even reached the third position in Argentina some two decades after market entry; in the latter South American country, that development has been followed quickly by restructuring and downsizing in recent years and a retreat to fourth position in market share at the time of this writing. The chapter compares and contrasts broad patterns and trajectories of Walmart’s labor contestation based on secondary sources—journalistic coverage by general and specialized news media, studies by international and local scholars, and documents from the company and union networks. In the case of Mexico, one of the authors participated in research leading to the publication of an NGO report on labor rights at Walmart in that country (ProDESC 2008). The choice of these three other Latin American countries makes sense because, within a comparative research design, it gives analytical leverage on key potential explanatory variables as well as a range of patterns of contestation viewed as dependent variables or “outcomes.” From a “most similar systems” perspective (Przeworksi and Teune 1970), the countries share broad similarities in levels of per capita income; political regime evolution (historically recent transitions from authoritarian to competitive, multiparty, democratic systems taking place in the mid-1980s to 2000); and evolution of the national political economy (moves from statist, import-substituting models to market-oriented ones in the latter quarter of the twentieth century). Analysis can thus “hold constant” these factors as key potential drivers of change in order to focus instead on those features on which they differ and on which our explanatory framework centers—namely, the character and patterns of evolution of their national

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and sectoral employment relations and labor institutions and the patterns of institutionally nested agency wrapped up with them. At the same time, this range of countries and scope of time from the 1990s through the close of the century’s second decade provides an opportunity to evaluate the degree to which there is change versus continuity across time and space in the U.S. supermarket giant’s labor relations and human resource management (LR/HRM) practices. The chapter advances two arguments that add up to a “differences within similarity” thesis. The first is that there is surprisingly little divergence across countries, and vis-à-vis home-country and core corporate parent practices, in two fundamental pillars of the company’s LR/HRM practices, first developed in the southern, rural, right-to-work United States under founder and CEO Sam Walton—namely, anti-unionism and a workplace authority regime of “repressive familialism” expressed by the company in so-called “Walmart culture” or “the Walmart way.” Instead, the chapter finds, there is in fact substantial cross-national similarity (and underlying continuity in corporate labor practices over time). This finding suggests that—any company discourse to the contrary aside—diffusion in the particular functional area of LR/HRM, in fact, has prevailed over national adaptation (a debate about diffusion versus adaptation reviewed in Chapter 2). Adaptation has been limited in extent, and at most “tactical.” Here the chapter takes explicit issue with key aspects of the influential claims of Tilly and Carré (Tilly 2007; Carré and Tilly 2017, 172–193) about the “surprisingly changeable” character of Walmart’s approach to labor relations outside the United States and ostensibly pragmatic adaptions to national markets and institutions. We find these claims, first, to be exaggerated; second, distant from conflicts, relations, and culture in the workplace and on the shop floor while privileging wage and benefit bargaining in ways that are much less meaningful in some national contexts with more encompassing bargaining patterns beyond the firm and store; and, third, overly US-centric in positing that antiunionism can only come in the particular form of outright resistance to unionization and union-busting enabled by the unusual U.S. employment relations framework of Taft-Hartley (viewed in comparative context). As a consequence, this influential view can misconstrue any formal or ostensible Walmart dealings with unions outside the United States as indicative of a pragmatic flexibility and institutionally conforming behavior that are, on closer examination, problematic when unions and unionization can be undermined short of union-busting and avoidance.

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Even as Walmart has clung tenaciously in Latin America to these core elements of its LR/HRM model, it is underlined—in our second argument—that there is considerable variation in the degree and nature of labor-management conflicts and legal and regulatory scrutiny (“contestation,” in short) of Walmart’s aggressive LR/HRM practices across the four countries including Brazil. This variation is expressed along an analytical continuum. At one pole, in Chile as in Brazil, Walmart’s practices have been substantially contested by combative and/or autonomous unions and met challenges from regulatory institutions and courts, often promoted directly or indirectly by union and worker legal denunciations and claims. Important material and symbolic victories have been achieved even as the firm has persisted in its underlying model. At the other pole, in Mexico under the period of primary focus there (through 2017), Walmart’s practices met with only very sporadic organized resistance from dissident worker groups; isolated, individual worker complaints; and little serious regulatory or legal scrutiny. If Walmart’s power was contested through institutionally nested agency in Brazil and Chile yet unconstrained in these ways in Mexico, the company’s experience in Argentina—it is argued—represents an intermediate case of modest worker contestation with only limited legal and regulatory scrutiny of labor practices. The much more modest degree of “pushback” against Walmart in Argentina, compared to Brazil and Chile, is on its face surprising—if a more narrow formal-institutional perspective on employment relations is taken. Such an alternative view centers exclusively on unions’ institutional power resources derived from state regulation and recognition, and on variables such as membership density and union centralization, and views institutions as static. The chapter instead explains these variations across countries, following the analytical framework employed in the previous chapters to analyze labor contestation around Walmart Brazil, as reflecting patterns of institutionally nested agency shaped—enabled, constrained, and molded—by the shifting as well as more permanent contours of national and national-sectoral labor institutions. An important point to recall from Chapter 2 is that, viewed through a gradual institutional change (GIC) theoretical lens, part of the contestation of an employer such as Walmart is around the continual, everyday reshaping of the interpretation and application of the rules themselves; challenges and conflicts sometimes involve actors as change agents taking advantage of new spaces created when former restrictions are rolled back or who

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are seeking trying to create spaces within these institutions. Also, countermoves or preemptive moves by more status quo-oriented “business” or otherwise conservative unions figure into the equation as Walmart typically faces competing sets of union challengers. Such cases vary from worker representatives at different stores, to rivals along lines of leadership versus rank and file or along political-ideological lines within larger national labor movements.

Slight Variations on a Theme: Anti-unionism and Repressive Familialism in Work Culture Inserting our findings from Brazil into the context of studies that examine not just formal bargaining but also workplace-level relations among company, unionists, and workers in these three other Latin American countries—and everyday treatment of workers—reveals two fundamental similarities. These similarities, in turn, speak to fundamental continuity between core global corporate strategy and national-level behavior in particular markets where the firm operates. First, anti-union discourse and behavior is rife, with variations based only on institutionalized opportunity structures by country that yield differences of degree but not kind on the part of the firm. Such behavior is obscured by the formal acquiescence in having unions as a bargaining agent for wage and at least some social benefits in national or national-sectoral systems lacking de jure or de facto a non-union option and/or company unionism and single workplace-centered collective bargaining. Second, anti-union discourse and behavior is closely connected to fervent promotion of Walmart culture and what we term a repressive familialism (see Chapter 2). As in Brazil, Walmart management in Argentina, Chile, and Mexico strives to inculcate in workers a sense of belonging to a happy family working in unison. Key aspects (discussed in earlier chapters) are: mandated group cheers; humiliating discipline; symbolic construction of a fictitious family among “associates” lacking in hierarchy; a vaunted open-door policy of strictly individualized grievance discussions; and an imposed ethic of smiling, client-centric customer service above all else including the comfort, safety, and security of the worker. The unique “born in Bentonville” approach to HRM that underlies repressive familialism distinguishes Walmart from national and global retail competitors and is the source of considerable worker resentment. Repressive familialism generates considerable everyday covert tensions as week as overt labor–management

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conflict in addition to—where state institutions for legal redress are accessible or porous for workers and worker advocates—legal action and/or regulatory scrutiny. Why do Walmart’s dealings with unions not indicate a pragmatic if tough-minded and aggressive adaptation to national realities in Latin America, as Carré and Tilly (2017, 172–193) and Tilly (2007) argue? We demur that it is a false dichotomy, born of what are particularities of U.S. labor relations when situated in comparative international perspective, to present the company’s choices in entering and operating in any of these countries (as well as nearly all countries where the country has entered since the 1990s) as either (1) “working with unions,” on one hand, or (2) running a union-free shop or busting unions, on the other. The second option is off the table in most countries, by law, tradition, as well as by dint of the company typically entering markets through acquisition and thus “inheriting” unions and collective bargaining agreements and mechanisms. A culture and legal norms protecting “right to work” and “freedom from unions” like in the United States and right-to-work states such as Walmart’s Arkansas base of operations do not reflect how most of the industrialized to semi-industrialized world, including Latin American countries with some history of labor mobilization and incorporation like those in question here, operate; a lone exception is autocratic and labor-repressive states. Walmart works actively against unions even if legally a non-union-shop is not available, seeking to undermine them institutionally as well as their legitimacy at nearly every turn. Anti-union behavior in the countries under discussion takes the form of flouting laws by taking such measures as blocking unions’ leaders’ rightful access to the workplace for meetings or everyday activities; actively inhibiting union communication with workers; failing to negotiate in good faith in many instances or often to participate in multiemployer bargaining structures; and not complying with norms requiring worker voice in health and safety oversight committees, among others. Open favoritism for conciliatory, autocratic unions—who perpetuate their hold over workers in return for organizational subsidies or “less bad” deals and who compete with or prevent inroads by militant labor currents—is another form taken by Walmart’ anti-unionism; yet notably even in such instances Walmart stops well short of a “micro-corporatism” involving cultivation of more systematic and sustained bargaining relations around economic issues consonant with firm goals. The latter

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approach seems to entail more sustained interlocution with labor representatives than Walmart is capable of or is comfortable with tolerating. In the extreme instance of Mexico, the functional equivalent of a U.S.style union-free shop is in the first instance provided by the ubiquity of sham unions and contracts (“protection contracts”); unbeknownst to workers and without even the pretense of any actual negotiations, these murky arrangements stipulate wages and flexible-work practices based on standardized company-determined formats and contents, in a charade of bargaining that attempts to mask unilateral employer imposition. However, as discussed below, there is lively debate, promoted by the more recent research of Tilly (2014) himself in critical dialogue with his own earlier work on Mexico (Tilly, 2005, 2006, 2007; Tilly and Alvarez Galván 2006), about the extent to which protection contracts, strictly defined, characterize Walmart’s operations in Mexico in a way that should be seen as uniform across time and region within that country (a debate addressed below). The view that Walmart is “different from global competitors” regarding LR/HRM in fact has some pedigree—beyond the more demonizing, often normatively driven literature critical of the firm in the U.S. context and then in its global expansion, discussed in Chapter 2—in terms of empirical research on global supermarket foreign direct investment (FDI). Durand and Wrigley (2009) present statistical evidence in a global comparative cross-firm study that, compared to French-owned Carrefour (its largest global competitor and its forerunner in the global wave of supermarket expansion beginning in the 1980s), Walmart fares better by competitive metrics in national institutional contexts that are laborunfriendly (and thus that are more like that it encountered in the United States) and worse in those that are labor-friendly; meanwhile Carrefour performs better in those that involve a structured role for unions and collective bargaining. Also to be noted is that Tilly, in an initial study (2006, 360–361) of Walmart’s labor relations amidst global expansion published around the same time, in fact does posit “elaborate systems and rules for employees” and “low wages and union avoidance” as two of the five core components and distinctive aspects of the Walmart U.S. business model whose “export” he examines critically. The signal contribution of Tilly (2005, 2006, 2007, 2014) and Carré and Tilly (2017) has been to undermine the claim or assumption in global Walmart studies or popular discourse that Walmart is a uniquely low-wage

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competitor with particularly atrocious working and employment conditions. However, that being noted, we argue that the company’s broader HRM system—involving what he calls “detailed specification of management and job procedures” as well as “local variants of the Walmart cheer” and what we have conceptualized as an authority regime of “repressive familialism”—as well as a more realistic formulation of what is narrowly formulated by Tilly as “union avoidance” (what we call anti-unionism) do in fact stand up to empirical scrutiny as enduring aspects of its LR/HRM model; these elements are in fact disseminated overseas and “surprisingly durable” (to invert the author’s formulation) across time and space based on evidence throughout Latin America and viewed in cross-regional comparative context. Put differently, the chapter argues, to be anti-union and to seek to mold the behavior and subjectivity of workers in elaborate, intrusive ways needs to be disaggregated from wage-setting and wagenegotiation practices. In wage practices, adaptation is not only heavily constrained by national institutional contexts regarding wage-setting and -bargaining, as the authors note (Carré and Tilly 2017, A1, 1–35); it is also, we underline, shaped by the company’s variable modes of market entry (e.g., late or early FDI, joint venture and acquisition versus greenfield) and the type of market segments it targets (that is, in the global South it typically aims at a relatively higher per capita consumer segment than at home). Chile In Brazil, Chapter 4 reveals legal complaints about the access of union officials to the workplace as well as lack of publicity of or other aspects of noncompliance with the holding of free and fair elections for worker delegates to legally mandated bilateral health and safety committees (CIPAs). (The issue is further developed in Chapter 6 as we move into the 2015–2018 period.) Turning first to Chile, Bank Muñoz (2017, 119) documents that the Labor Directorate within the Labor Ministry listed Walmart among the companies fined for “anti-union practices” in five of the firm’s first eight full years of operation in Chile (2009, 2011, 2012, 2015, and 2016). Such fines (usually in the range of US$50,000– 100,000) mean that companies cannot do business with the Chilean state for two years’ after the respective legal judgment. The author summarizes the main abuses punished as “firing workers who were protected by

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the union, noncompliance with union contracts, and interfering with the process of unionization” (ibid., 119). In her case research on Walmart in Chile, Bank Muñoz (2017, 116– 116) notes how an autonomous union was forbidden from meeting on company premises, in direct violation of labor law. While she notes that anti-union abuses “occur in other [supermarket] companies,” a careful examination of the records of the Labor Directorate from 2009 through the first half of 2018 for the country’s three largest supermarket chains reveals that Walmart-operated stores were fined on five occasions, while leading competitor Cencosud was fined only once and its other leading competitor, SMU, was not fined at all. Over 2009–2014, Walmart consistently made the Labor Ministry’s top ten list of anti-union firms throughout the economy, published twice a year (Bank Muñoz 2017, 85). Further details on the nature of the legal violations by Walmart is revealed by our updated examination of these records1 : mass dismissals of union members; offering higher benefits to unionized supervisors in exchange for them being excluded from collective bargaining; nonpayment of wage advances to striking workers; nonpayment of a replacement bonus legally guaranteed to workers replacing others during strikes; and (generically in terms of citation of labor law provisions) “use of physical force or intimidation against workers to force them to join or rescind affiliation with a union or abstain from belonging to a union, or impeding or obliging a worker to promote the formation of a union organization” (authors’ translation of Labor Ministry documents). For context, it should be underlined that union membership is voluntary in Chile (i.e., there is no closed or union shop, and there can be more than one union in a given workplace); moreover, until more recently, the hiring of replacement workers (strikebreakers) was legal during strikes under certain circumstances. Argentina Anti-union practices have also been notable at Walmart Argentina. By way of background, in most sectors, including commerce, the country’s labor laws create a monopolistic system of representation (with voluntary individual worker membership) via national-sectoral union federations (in this instance the Federación Argentina de Empleados de Comercio y Servicios, or FAECyS); these federations have their respective local union affiliates known generically as sindicatos de empleados de comercio or SECs, such as

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the Sindicato de Empleados de Comercio de Lanús y Avellaneda (SECLA) in the case of the location of Walmart’s store on the outskirts of Buenos Aires (Cardoso and Gindin 2009; Bensusán 2006; Abal Medina 2014). In all workplaces with ten or more workers, the law provides for directly elected union delegates, who in turn constitute an internal commission and hold work assemblies, with the number of delegates proportional to the number of unionized workers in each workplace and with fairly broad yet vaguely defined functions related to representing workers and engaging with management.2 Yet as of 2000, only at the aforementioned Avellanada store, the company’s first in Argentina, among Walmart’s 13 stores operating at the time in the country had union delegates been constituted and delegate commissions been created (Abal Medina 2018, 20–21; Walmart Annual Report: 2010, 8).3 As of 2007, the number had grown to ten of 15 stores by one press report (Carbajal 2007), though with the company’s net addition of five more stores expanding its store count in Argentina to 20 by 2010, that number stayed stable as of the end of the century’s first decade—with only half of stores having elected union delegates (CEFS 2010). It seems clear there was an implicit pact between the country’s commercial union federation to deny rank and file workers their representational legal rights in the workplace (delegates being somewhat equivalent to shop stewards in the parlance of other national labor relations systems). The commercial federation and its affiliates were known for their “service” orientation (Abal Medina 2018) and as a “business union” (sindicalismo empresarial; Abal Medina 2014). This orientation involved managing and doling out health care (e.g., prescription drugs, disability certificates) and other social services to members in a clientelistic fashion. Where there was irresistible worker pressure to hold such elections, the various unions within FAECyS sought to ensure they had allies that would quell any rank and file activism (Abal Medina 2014, 2018). In the case of the Avellaneda store, SECLA leaders acquiesced in measures like firing of activists and their relatives or prevention of activists from running for the delegates’ commission, and in general lacked mechanisms that incorporated a role for delegates in union decision-making (Abal Medina 2014, 2018). While situationally adjusted, Walmart anti-unionism was systematic, strategic, and deeply philosophical, ingrained in the company’s DNA. In the course of her research on Walmart Argentina in the mid to late 2000s, sociologist Abal Medina discovered a “controversial confidential

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manual distributed among managers and executives;” it was quite similar in content to the “anti-union toolbox” at the Walmart parent, distributed among managers by intranet, whose existence became public with a 2003 filing with the U.S. National Labor Relations Board (Human Rights Watch 2007); the latter actually dates to 1997, and is similar in content as well to the anti-union training video at the U.S. parent whose existence was disclosed in 2014–2015 (Greenhouse 2015). The author quotes as follows from the Walmart Argentina manual: The commitment to remain union free also has a price. Unless each member of management is willing to spend the necessary time, effort, energy, and money, it will not be accomplished. The time involved is a day-in/day out (365 days per year) application of the union free standards and the obligations and responsibilities imposed upon the management team. (Abal Medina 2018, 122–123)

It seems clear from the manual that the goal of the company is to keep the workplace and shopfloor union-free, meaning without the daily presence of union delegates. It is also apparent that the company drew a clear distinction between that goal and the bureaucratic reality of national collective bargaining in which only wages and some aspects of sector-wide employer contributions to social benefits were renegotiated through an employer chamber annually; also part of those institutional realities was the fact that other standardized contractual aspects pertaining to work rules, job classifications, and the like and referencing labor law were automatically renewed under the principle (discussed below) of ultraactividad. The author summarizes anti-union practices at the store: The repressive practices that deter unionism include preventing the employment of “individuals who are more susceptible to unions” and the observance of a typology of employees suspected of harboring pro-union views that allows for the immediate eradication of “conflictive elements.” These practices are reinforced by the “Mystery Shopper” program, a concealed, invisible form of control in which someone pretending to be a client evaluates a worker’s performance. (Abal Medina 2018, 122–123)

Among the disturbingly similar details of the employee surveillance system noted in Argentina by Abal Medina and in Chile by Bank Muñoz is Walmart’s employment as corporate security chiefs as well as security staff of ex-military officers closely identified with human rights abuses

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under the ruthless regimes of the Argentine generals (1976–1983) and of Pinochet (1973–1990), respectively. In Mexico City Walmart stores, meanwhile, Hérnandez Castro (2011, 14) describes a “system of surveilliance (vigilancia)…made up of video cameras, security guards, assistant managers, sales floor chiefs (jefes de piso de venta) and co-workers themselves” (authors’ translation). Common anti-union tactics in Argentina noted by Abal Medina at the Buenos Aires store she studied—and also noted in press reports (Carbajal 2007; Trigona 2008; CEFS 2010; Ignacio Online 2011)—are firing of activists leading strikes or running for delegate, retaliatory firings against their family members, discrimination against delegates in pay or access to benefits, and efforts to bribe delegates leading strikes. In 2007, Walmart Argentina officials were called before a national congressional committee to testify on sackings of union activists as well as the employment of ex-military officers from the dictatorship era in leading stores’ security positions (Trigona 2008; Abal Medina 2014). Mexico In Mexico, the first country which Walmart entered outside the United States, anti-unionism and repressive familialism in workplace culture were particularly acute. Walmart inherited from the Grupo Cifra stores it acquired when it entered in 1991, and then reproduced in the new stores it built, sham formulaic contracts—whose existence was generally unknown to workers. These secret contracts were with compliant “’paper unions’” (in the words of a manager cited in Tilly 2014, 179) affiliated with one of the country’s state-linked “official” confederations and recognized by local labor boards or Juntas Locales de Conciliación y Arbitraje (Carré and Tilly 2017); these boards in turn have been dominated since the 1980s by employers, the neoliberal state, and conciliatory and undemocratic official unions and have wielded considerable discretionary authority in recognizing unions and in determining the legality of strikes (Cook 2007, 153–156). Contracts were generally specific by location and union local (even if they might be affiliated to the same national confederation), and were characterized unanimously and resoundingly as “protection contracts” (contratos de protección)—by Mexican labor scholars (Bouzas Ortiz and Reyes Ramos 2007; Bouzas Ortiz et al. 2009; Hérnandez Castro 2008, 2011), by U.S. labor scholars (Compa 2003), by journalists (Ramírez 2008), and initially by Tilly and collaborators (Tilly 2005, 2006, 2007; Tilly and Alvarez Galván 2006) as the author himself

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notes in a later explicit revision of his argument based on further fieldwork (Tilly 2014). Protection contracts are a particularly pernicious and widespread form of employer control through corrupt unions that do not engage in bargaining and representation and occupy institutional space that prevents the formation of a real union in workplaces. As a general phenomenon but by no means uniform reality, protection contracts date from the 1930s, and were always prominent among small- and medium-sized enterprises and in the commercial sector. However, they became increasingly common around the country and across many sectors from the 1980s. Bensusán’s (1997) explanation of the practice is particularly insightful: The signing of “protection contracts” is possible because of the existence of a network of complicity among union leaders, labor authorities, and firms. The first step is taken when the union registration is granted to a spurious union which, instead of representing workers, profits through the exercise of collective rights. Oftentimes these unions are affiliated with confederations (centrales ) by which they receive their registration in privileged conditions. The union—also known as a “‘letterhead” [membrete] or “phantom” [fantasma]—offers protection to the employer, who recognizes it as the titular holder of the collective contract, which is deposited with the labor authority. On occasion this practice takes place before the firm begins to operate and workers are hired. The workers are not aware of the existence of either the union or the collective contract. (Authors’ translation)

The insidious impact of protection contracts stands out in a larger national context in which collective bargaining contracts with genuine unions included stipulations that frequently went beyond the labor code in Mexico—that is, regulations of work rules (reglamento interior del trabajo), hiring (requiring workers to be union members), a system of job classifications and promotions (escalofón) particularly based on seniority (antiguedad), working hours (days per week and hours per day and vacation days), right of unions to declare a worker non grata and have him or her dismissed (claúsula de exclusión), and other aspects of workplace life. On such issues protection contracts either remained silent or explicitly repeated the minimal provisions of the labor code (Bensusán 1997; Bouzas Ortíz and Mendoza Mondragón 1999; Moheno Verduzco 1999). These contracts thus gave employers such as Walmart maximum flexibility in all the areas of flexibility (functional, working time, remuneration,

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external) discussed in earlier chapters. At the same time, they also weakened institutional means by which unions traditionally safeguard their autonomy and power vis-à-vis firms. Another crucial aspect of protection contracts is that independent unions as well as bottom-up workplace organizing were preempted not just through the existence of these contracts themselves (given the monopolistic space they occupied where Mexican labor law allows only a single union per workplace or company). As Hernández Castro (2008, 2011) documents in Mexico City stores based on his mixed-methods research and participant observation, protection contracts at Walmart also undercut worker organizing through practices or threats of firing. Tilly (2014, 192) himself reports based on an interview that Walmart fired all the workers at one Walmart store in the state of Tlaxcala in order to re-open with new hires under a contract with a different, more “compliant” union local, displaying an aggressive use of the freedom afforded to employers by pliant labor boards to bust genuine unions. Notable is the fact that 87 percent of Mexico City Walmart workers surveyed by Hernández Castro (2008, 110)4 responded that there was no union in their stores—though the author located the respective contracts filed with the respective local labor board under which they worked; meanwhile, 77 percent thought it was important to have a union, clearly unaware that there was, indeed, a “union of record.” Of note, and as discussed below, at the time of his research there was an effort to organize an authentic union at these and other Walmart stores—77 percent of respondents at the three stores reported they were aware of organizing efforts (“intentos de sindicalización”) (Hernández Castro 2008, 111). It seems that the company’s systematic efforts to screen out workers likely to make “trouble,” and to discipline or dismiss those who complain and seek to engage in collective action, were ultimately effective in stunting such efforts, for they never reached the level of contested union elections or overt mobilizations.

The Fictitious “Walmart Family” Intimately related to the unwillingness to acknowledge a legitimate representational and interlocutor role for collective worker voice through unions or other elected worker representatives—such as shopfloor delegates in Argentina and worker reps on health and safety commissions (SIPAs) in Brazil—is the company’s consistent, cross-national insistence

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on maintaining all the key pillars of the “Walmart way” in treating, socializing, and disciplining workers regardless of national law or work culture. Before describing the repressive familial workplace authority regime across the three comparator countries to Brazil, it is important to underline how intrinsically connected Walmart culture and anti-unionism are. It is also crucial to establish how much they both are manifested predominantly in everyday shopfloor relations rather than just the collective bargaining and social benefits mostly emphasized by Tilly and colleagues. In the company’s 2007 Walmart anti-union toolkit for U.S. managers (distributed and read by managers in other countries as Abal Medina reports for Argentina), the company lays out in a bolded section called “WAL-MART’S PHILOSOPHY on UNIONS” the following: Wal-Mart is strongly opposed to third-party representation. We are not anti-union; we are proassociate. We believe in maintaining an environment of open communication among all associates, both hourly and management. At Wal-Mart, we respect the individual rights of our associates and encourage everyone to express his/her ideas, suggestions, comments or concerns. Because we believe in maintaining an environment of open communication through the use of the Open Door policy, we do not believe there is a need for third-party representation. It is our position every associate can speak for him/herself without having to pay his/her hard-earned money to a union in order to be listened to and have issues resolved.5

As noted in Chapter 2, we term the workplace regime (set of authority relations) and workplace culture that the firm endeavors to foster “repressive familialism”—management aims to foster close, subordinate ties between workers and management, promote from within (including to supervisory positions) only workers who have demonstrated consistent loyalty and obsequiousness, and publicly punish those who “transgress” the company’s norms and lines of authority. Walmart’s workplace culture rests on intimidation, surveillance, and coercion but also paternalism and carrot and stick incentives. Common elements of Walmart culture across the three countries as well as Brazil include the following: (1) the requirement that workers sign or have read to them the company’s global code of ethics upon hiring; (2) use of the terms “asociado” or “colaborador” and prohibition on use of term “trabajador” as well as use of other symbolic elements of personal address and dress that seek to blur hierarchy; (3)

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an “open doors” policy of individual conflict resolution; (4) promotions from within to lower management of loyal employees; (5) emphasis on an ever-smiling customer service orientation above all else where the “customer is always right;” and (6) use of public shaming and punishment against non-complying workers. Efforts to indoctrinate workers into a repressive familial workplace regime are common at Walmart across Brazil and the other three Latin American countries, though the degrees to which and forms with which they engendered everyday as well as legal and organizational resistance across the three countries as well as Brazil varied (as developed in the next section). In all three countries6 the company insisted that a particular Spanish-language version of Walmart’s language of “associates” be used everyday on the shopfloor as well as in corporate communications as a substitute for “workers” (trabajadores ); the alternative lexicon is used to blur hierarchies and power relations by discursively putting all employees, including managers, on the same horizontal plane. The term associates generated much criticism from labor activists in Argentina (Abal Medina 2014, 2018) but appears to have persisted, and occasioned a successful legal challenge and unevenly obeyed Labor Ministry directive for the company to cease in Chile (honored more in written than verbal communications). In addition, Walmart workers are required to engage in the collective “Walmart cheer” at the start of each shift and in company gatherings in all four countries. It involves dancing and swaying, while signing in unison variants of a song praising the company in pep rally fashion, led by one or more “associates.” (Protests against the practice at the Avellaneda store in Buenos Aires resulted in it becoming more restricted to internal meetings and with “voluntary” participation at that location, according to Abal Medina [2018, 143].) The company’s aforementioned open-door policy to subvert or circumvent unions or shop floor delegates and individualize response to grievances and conflicts is present in all four countries. Abal Medina (2018) in research on a Buenos Aires store and Hernández Castro (2008) in work on three Mexico City stores use strikingly similar language about how this practice leads sometimes to the conflation in workers’ minds of human resource procedures with unions: for the former, “workers systematically confused the union with the company’s open-doors policy” (p. 123) while for the latter “in the discourse of Wal-Mart the opendoors policy is the equivalent to a union” (p. 111). Undoubtedly, to some degree Walmart took advantage of the top-down, bureaucratic tradition

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of unions in these two countries in the sense that what was available from the company did not feel that different to workers than the treatment they had come to expect from unions in their country. It is notable here that the Spanish-language version of the company’s Ethics Code spells out associates’ “concerns” should be taken to the workers’ immediate supervisor (with no fear of reprisals), then to the next level of supervision or to the Global Ethics hotline if a satisfactory response is not found. Hernández Castro gives a particularly detailed account, for Mexico City stores, of the process of supervision and socialization whereby “Walmart culture” is fostered among new hires, based on a series of steps: a pre-application screening to filter out undesirable candidates; one level of human resource department interviewing and then two levels of interviewing by managers where behavioral and disciplinary standards are underlined; group meetings of new hires with existing workers at which ethical principles are read out loud and discussed; the signing of the individual contract; and three layers of training (an exam that must be passed by the candidate after viewing a multimedia presentation on the company and its policies, a walkaround with a sales promoter, and a training video) (Hernández Castro 2011, 13). Two particularly pernicious elements of Walmart’s repressive familial workplace regime concern gender discrimination in Chile and Mexico and, additionally in Mexico, child labor (such issues are not addressed in available studies on Walmart Argentina). Based on a non-random survey of 254 female workers at Walmart stores in eight states outside Mexico City, Mexican human rights non-governmental organization (NGO) ProDESC (Proyecto de Derechos Económicos, Sociales y Culturales ) (2008, 43) found that eight percent had been forced to undergo pregnancy testing, 12 percent were aware of such cases among female co-workers, 50 percent were asked whether they were pregnant in job interviews, and two percent knew of Walmart workers who had been dismissed after becoming pregnant. Hernández Castro (2008, 88) confirms that women are asked in the pre-application questionnaire whether they are pregnant. The CEO of Walmart Chile bragged in 2012, four years after the company began operating there, that the company had eliminated forced pregnancy testing, thus implicitly conceding its early use by the company (Bank Muñoz 2017, 149). A company emphasis on grooming standards regarding women’s hairstyles and nail polish and males being clean-shaven is reported by Bank Muñoz (2018, 96–98) as a contentious issue in Chilean stores. Incidents of sexual harassment are noted in passing

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in Chile (Bank Muñoz 2017, 83) and in Mexico (ProDESC 2008, 42). Notably, none of the studies gathers evidence on pay discrimination, and ProDesc finds 77.3 percent of female respondents did not perceive pay differences. Most likely, this situation has much to do with occupational segmentation by gender and with workers having those in the same occupation (e.g., women as cashiers) as their peer group for such subjective comparisons; the evidence of Walmart pay discrimination by gender is noted in Brazil in Chapter 3. Based on fieldwork conducted in 2005 and 2006 with interviews of workers outside 18 Walmart Mexico City stores (for which author Martin provided feedback on questionnaire design), Mexican human rights NGO ProDESC released a report in 2007 that documented abuses of child labor standards as well as Mexican labor laws. Like its predecessor Cifra and some other supermarket chains, Walmart operated in violation of laws prohibiting the employment of minors under the age of 16 through an arrangement with the national supermarket association, Asociación Nacional de Tiendas de Autoservicio y Departamentales (ANTAD), and the Mexico City labor secretary’s office. Under this arrangement, Walmart Mexico treated its thousands of 14–16-year-old baggers (as well as parking attendants) as “volunteers” who worked only for tips and received none of the social benefits (health coverage, retirement contributions, disability, and so forth) attached to formal employment in Mexico. The company employed more than 70 percent of the more than 9000 children working at its stores in Mexico City as grocery baggers (ProDESC 2008, 31–32). Once the pre-publications findings of the report received widespread national and international attention, including a critical article in the U.S. magazine Newsweek (2007), the firm defended the practice arguing that children were required to attend school, and must have parental permission and a medical certificate; yet the report showed that many worked past the legal daily limit of eight hours, were subject to dismissal if they were tardy or absent, were subject to other abuses like normal employees, and were in various respects experienced treatment that was not compliant with International Labour Organization guidelines regarding child labor. Though as of 2010 Walmart Mexico’s annual report was still praising its ongoing voluntary bagger program, at some point around 2012 it phased it out, and found as a substitute “voluntary” workforce those at the other end of the life course, the elderly. There do not seem to be comparable practices in the other three countries.

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All in all, this convergent portrait of anti-union practices and repressive familial workplace culture across Argentina, Chile, and Mexico, and in light of our findings on Brazil, contrasts in important ways with the argument of Carré and Tilly (2017) that Walmart around the world (including in these particular Latin American countries) is “surprisingly changeable” (the title of their comparative Walmart chapter) when compared to home country “low road practices.” The authors claim that Walmart “conforms with national institutional regimes around the world…[though] it does resist unions to the extent practical within those regimes” (p. 182). Their claims echo Tilly’s (2007, 1816) assertion that, “[i]n general, when it comes to unionization, Wal-Mart appears to fight unions in rich countries but accommodate them in poor ones.” Our research in Brazil presented in the previous chapters and this review of evidence in Argentina, Chile, and Mexico suggests there is nothing “accommodating” about the aggressive, often blatantly illegal actions preventing freedom of association and intimidating and punishing workers and elected worker leaders who oppose its policies and practices. The authors’ primary focus on wages and benefits, and the formal existence of unions at its stores when the non-union option is simply not on the table in these countries or in this sector for any large firm, fails to capture the company’s unique workplace regime. Its practices seek actively to mold workers’ subjectivities, with harassment of union officials or activists genuinely trying to represent worker interests, and other measures taken to undermine activism and union activity as well as channel any airing of disputes through company-dominated arrangements and to suppress any expression of discontent. To the extent that part of Carré and Tilly’s (2017) burden is to show that the low road (low wages, high turnover) is ubiquitous and pre-existing in many countries’ retail sectors and that a U.S.-style Walmart-led race to the bottom (often known as “Wal-Martization”) is not borne out by the evidence, our study operates on a different plane. Our aim is not to compare systematically across firms within the sector particularly around wages. Among other difficulties with following such a perspective, the multiemployer and partially to full centralized nature of wage bargaining and bargaining over many benefits precludes the existence of such divergence in Argentina and Brazil. However, regarding repressive familialism and anti-unionism per se, evidence is presented in Chapter 4 that Walmart was much more likely to face legal action for psychological harassment of workers than either of its two major national competitors. As noted above, Chilean fines for anti-union practices (defined broadly as against

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not just unions as organizations but individuals in the exercise of rights to join and be represented by unions) were much more common at Walmart than at leading competitors. Similar evidence will be presented in Chapter 6 regarding the higher propensity of Walmart to be sued in Brazil than its supermarket competitors. In its tightly woven combination of anti-union behavior and philosophy with a repressive familial workplace culture and authority regime, Walmart is, in short, an outlier among large supermarket employers in terms of this particular set of abusive working and employment conditions, even if low-road precarious conditions are ubiquitous in the sector. For purposes of our study of contestation of Walmart’s labor practices, joining a workplace-grounded vision with an analysis of labor–management relations including legal and regulatory scrutiny is key. This analytical integration uncovers the precise issues where workers perceive that the company is aggressively intruding on their personhood or even (in the case of denial of bathroom breaks for long periods of the work day) bodily functions or where it denies them institutionalized, bilateral channels for resolving everyday collective grievances. These issues, along with and wrapped up with material concerns about overwork, underpayment for overtime, and level of or underpayment of wages, become a key locus of resentment, activism, and in some cases legal challenges, as discussed in the next section.

Contestation in Chile: Broad Similarities with Brazil Despite commonalities in the firm’s anti-unionism and repressive familialism (that is, corporate LR/HRM strategy) across the four countries, Walmart has encountered considerable union and legal/regulatory contestation only in Chile and Brazil, with low to moderate contestation in Argentina, and very low levels in Mexico. These are broad cross-national generalizations that seek to capture dominant national tendencies, to be sure, since some level of dynamism in trends is evident over time in each country. The best way to comprehend and explain these contrasting national tendencies as well as evolving trends within countries over time is through a gradual institutional change (GIC) lens as introduced in Chapter 2—labor and state agents are organizations nested in institutional fields and sites that shape their strategies, resources, and identities and whose rules and power distribution they seek to reshape

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in their interactions with each other and with firms. Given the competing impulses of democratization and social inclusion versus market reform and technological change causing these institutions to be in flux, struggles over firm practices are at least partially inscribed within broader struggles over rules of the game shaping relations among labor, capital, and the state. In Brazil in the 2003–2014 period, Chapter 4 showed how unionists capitalized on new spaces and struggled to turn broad, vague profitsharing requirements into genuine bilateral institutions and to create new organizational alliances to try to confront Walmart as a powerful multinational; meanwhile labor prosecutors and inspectors took advantage of incremental legal changes that empowered them in investigating and holding accountable large firms, and courts came to be arbiters of a wider range and greater volume of cases filed against corporations such as Walmart by individual workers, unions, and prosecutors. At the same time, some of the reach and the limits to these challenges were found in the resiliency of the routinized, economistic, as well as multiemployer-municipal focus of collective bargaining as well as the absence of mandated workplace representation—more enduring features of the country’s gradually but not uniformly evolving labor relations institutions. With minimum wages steadily increasing in real terms and labor markets tight, Brazilian commercial workers’ unions’ leverage over wages grew even though collective bargaining still proved a very limited tool for dealing with conditions of work and firm abuses in the workplace at specific retailers such as Walmart—hence, unions’ attempts, with only limited success, to try to make firm-level profit-sharing negotiations into broader, more encompassing forums in which they sought to gain traction on working time, scheduling, and other issues. Into this power void of workplace-level abuses effectively beyond unions’ reach in a low-wage, low-skill, high-turnover sector stepped legal claims-making and scrutiny, directed at and/or coming from the various decentralized bodies and agencies within the state. In Chile, by the time that Walmart acquired majority control of D & S in 2008 and began integrating the Chilean supermarket chain into the company’s new subsidiary there in 2009, limited and incremental reforms mostly touching on individual labor rights had taken place since the return to civilian rule in 1990. Pinochet’s draconian labor code, still largely intact, had decentralized collective bargaining to the firm and in this case store level, prevented closed union shops, and allowed

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for legal strikebreakers. However, very modest, incremental reforms together with the continued distance of the labor movement from the Concertación coalitional governments under both Christian Democratic presidents (1990–2000) and then Socialist chief executives (2000–2012), had chipped away at the edges of this still labor-fragmenting system in ways that were consequential—and well captured by a GIC lens. This was true even as those limited changes consistently frustrated those unionists and labor advocates calling for fundamental, comprehensive reforms to strengthen labor rights. As noted above, judges and the labor ministry issued fines against Walmart as a leading abuser of labor rights among all companies (and sectoral “leader” in this respect) and ruled it could not call workers associates (“colaboradores ” was the company’s version of the term in Chile); these developments cannot be understood without noting that the Labor Directorate had its jurisdiction expanded in the late 1990s, and later in the early 2000s became party to cases going to tribunals, with fines raised for anti-union dismissals and artificial creation of separate corporate divisions by companies as a ruse to avoid unionization (Cook 2007, 139–142). In addition, in the early- to mid-2000s the number of labor inspectors and judges was increased, and under the first Bachelet government (2007–2012) there was a further doubling of the number of labor court magistrates and newly created specialized labor tribunals speeded the processing of labor claims against firms (Cook and Bazler 2013, 12). In a recent comparative examination of Latin American labor inspection systems, Piore and Schrank (2018) find that Chile “combine[s] liberal labor markets with aggressive workplace inspectors” and argue that “Chile is the Latin American leader in terms of workplace regulation today” (pp. 92–94). The authors cite these same recent reforms as well as a “‘legalistic’…approach to labor and employment relations, which entrusts worker protection less to unions by means of collective bargaining than to the state by means of legal and administrative tools, including workplace inspection” (p. 92). The authors (Piore and Schrank 2018) further identify in Chile a high degree of professionalism in a meritocratically recruited career inspectorate and a high ratio of inspectors to workers and establishments convergent with ILO inspection recommendations. Their study also finds there is a mix of coercive power with authority to provide managerial and technical expertise to assist willing firms to come into compliance. It is telling that the authors group Chile together with Brazil as leading examples of workplace regulation systems

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that together stand out both in the Latin American region as well as among all developing countries, with both registering falls in informality through the mid-2010s (albeit a trend reversed in recent years in Brazil); both were also among the few countries in the world with expanding collective bargaining coverage within that time frame (Piore and Schrank 2018, 93). Underscoring that point, Visser et al. (2015, 8) in an ILO study documents that Chile (along with Brazil) is one of only ten countries among 48 around the globe with consistent data—and the only two in Latin America or the developing world—that exhibit an increase in bargaining coverage (around two percent) from 2008 to 2012/2013. The important broad commonality with Brazil is that overall improvements in state legal and regulatory scrutiny of firms in Chile (through somewhat different mixes of types of agencies among inspectors, courts, and labor ministry officials) meant heightened fines and judgments against Walmart for its unlawful behavior toward workers and unions. In both countries, as Bank Muñoz finds for Chile (2017) and dovetailing with our findings from Chapter 4, unions representing Walmart workers developed legal strategies to try to activate the power of the state. However, whatever the relative capacity of these regulatory institutions in a larger international comparative perspective, this still did not render them an effective deterrent for recalcitrant and abusive behavior core to the company’s self-conception and global LR/HRM strategy: Similar to the evidence we find of Walmart continuing practices found to be contrary to law in Brazil, Bank Muñoz (2017, 109–188) documents evidence in Chile on continued violations of labor laws (on hours, wages, breaks, and anti-union measures against leaders and holding of meetings) as well as human rights (e.g., forced interrogations) and fundamental rights of the person (for instance, punishment of workers for how they dressed or wore their hair). Unlike in Brazil, however, the legal costs incurred (at least thus far) in Chile do not seem to have affected the bottom line (Bank Muñoz 2017, 119), perhaps in no small part due to the company’s quick assumption of market leadership after its market entry. If legal levers were strengthened and used more aggressively against the relative newcomer Walmart in the state-regulatory sphere in Chile, other institutional features colored organized contestation by unions. A continued lag in collective labor rights, the top-down character of national labor center Central Unitaria de los Trabajadores (CUT), and the dominance of business unions at Walmart and its predecessor and in large retail firms more generally channel discontent into breakaway movements and

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the formation of autonomous, militant unions, and federations of unions within Chile’s structure of decentralized representation and bargaining. That is, worker opposition initially formed outside of the dominant labor center, CUT, and in opposition to business unions cutting “sweetheart” deals with the firm. A prime example of the latter is the Sindicato Interempresa Líder (SIL) representing workers at many of the company’s Líder-branded stores (a legacy brand from D & S). At the Líder stores the company signed a convenio coletivo (loosely, a covenant or arrangement) in 2008 after the purchase (but before the takeover), a type of legal instrument short of a collective bargaining agreement that does not guarantee the right to strike nor the job stability of union leaders (Bank Muñoz 2017, 73). The framework agreement (acuerdo marco) that SIL reached with D & S that year—in part to ensure labor peace during the transition to Walmart control—committed workers to a cap on wage increases, difficult productivity targets for workers to reach any bonus pay, a provision that the firm could not reach better terms with any other union, and another bonus for “constructive” union activity paid only to those workers who joined SIL (Bank Muñoz 2017, 173). Protests from rank and file at various stores ensued, and courts ruled the agreement to be a collusive, anti-union (in essence, anti-labor rights) arrangement. Walmart, however, re-created a similar acuerdo marco once it took control of D & S stores, and in response dissident elements broke away at various stores and formed autonomous unions that became grouped into two new federations, Federación Autónoma and Federación Nacional de Trabajadores Líder (FENATRALID). Over 2011–2015, autonomous unions with rank and file participatory structures engaged in militant actions such as strikes, strike authorization votes, street meetings and protests outside stores, as well as sending delegations to meet with management taking advantage of the company’s open-door policy (Bank Muñoz 2017). Among the gains achieved were a first contract at the Ekono brand stores; improvements in wages, benefits, bonuses, and seniority benefits at several Walmart brands; breaking the pattern bargain the firm tried to set in negotiating with SIL; and creating a Walmart Workers Council to support autonomous unions throughout the country and across brands. The mixture of gains won through conflict and pressure that we have characterized in Brazil as conflictual cooperation (Chapter 4) would seem to capture the dynamic of autonomous unions’ interactions with Walmart in Chile equally well. There is also a clear cross-national parallel in the

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difficulties encountered by unionists in trying to forge a lasting common front—such as failing to follow through on the difficult fight to secure common contract renewal dates that undermined unions’ bargaining leverage—and in the “divide and rule tactics” the company employed to try to undermine autonomous unions and channel worker support into business unions or simply incentivize workers to remain unaffiliated with any union. An example is the hard line taken against a December 2014 strike by some 8000 workers across 70 stores and three Walmart brands staged by a different autonomous federation (Federación de Sindicatos Walmart )—the company forced workers back to work and to settle for an offer that was below what it had bargained with other unions by threatening to lock workers out and shut down stores if the strike reached 15 days (a move then legal under labor law).7 One area where there was a clear difference with Brazil concerned warehouse workers—a militant, separate union, also outside the Chilean CUT but which eventually joined the Walmart Workers Council, used its structural power as well as associational strength to shut down or threaten to shut down the company’s all-important distribution and logistics system and to secure both material as well as work rules concessions (Bank Muñoz 2017, 86–107). In Brazil, warehouse workers were part of the same broad commercial workers unions as retail employees, and yet we found no evidence that strategies were developed by unions of any stripe to harness the potential power of these workers to pressure the company by threatening the distribution of goods to stores. In subsequent events captured in news reports and on labor websites, it appears as if business unions in Chile regained some momentum and became privileged firm interlocutors. Furthermore, efforts at broad inter-union unity on issues of technological change and training proved short-lived as divisions resurfaced, most likely fomented at least in part by the company. In August 2015, SIL—taking advantage of legal decisions it pushed for enabling it to negotiate across multiple brands with a common owner—was able to bring over 15,000 workers across a half dozen Walmart brands into a single contract, raising standards at some of the brands with smaller stores.8 By 2019 it had become the largest single union in Chile in any sector, with over 17,000 members. What was hailed by the global service-sector federation UNI Global Union as an important step with a 2015 agreement between SIL and other CUT-affiliated unions and autonomous federations—jointly to choose representatives to sit on the company’s bipartite training committee and to form a joint action

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plan—and the 2016 formation of a Walmart Coordinating Network (Coordinadora Sindical Walmart ) seems to have foundered after a few years.9 Instead, it was exclusively bilateral meetings between the business union SIL and the firm that finally resulted in an agreement in April 2019 to (re)train workers (only at the stores it represents), create new job categories consistent with automation, and protect wages in light of the deployment of self-checkout, self-scan, and other new technologies.10 For SIL, cooperation with the U.S. giant has proved to be an elusive process and never a two-way street, much as both combative and more centrist to conservative Brazilian unions have learned. A six-day strike that SIL waged in July 2019 encompassing 17,000 workers (out of Walmart Chile’s total of approximately 50,000) led to a 3.5 percent raise for workers recently reclassified and cross-trained as “multifunctional” (that is, subject to rotation between occupations and departments) and 4.8 percent overall real wage increase,11 significantly below original demands. The willingness to go on strike suggested SIL’s move in a more combative direction (Ratto 2019), as well as capacity to flex its muscles (joining associational and structural power) based on sheer size and geographic scope of its membership. Yet in September 2019 more than 400 workers, over 80 percent of them SIL union members or leaders, were dismissed across multiple stores and cities with SIL representation. The union decried the move as a clear reprisal for their participation in the July strike (and thus in violation of labor law), though the company declared the dismissals were simply a normal part of what it claims is its four percent monthly worker turnover in retail.12 Finally, Walmart-owned stores under the firm’s various Chilean brands became a major target of lootings, arson, and destruction by the angry youth protests that swept through Chile from October into December 2019. As of early December 2019, there were some 1300 lootings of stores under its various brands, 18 of these stores were completely destroyed, and 99 were closed indefinitely. Over 4000 affected workers were relocated to other stores and roughly another 1000 were still to be relocated, while an indeterminate number seemed likely to lose their jobs definitely and receive an undetermined amount of compensation or severance.13 It remains to be seen if these episodes ultimately will represent a permanent dent in Walmart’s aggressive footprint expansion in Latin America’s highest-income though still highly unequal country. Chile is a market that seems to represent a good fit with its business model

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on the consumer front and where significant moves have been made in the “omni-channel” direction of integrating e-commerce and in-store shopping, ordering, and pickup as well as in various related process technologies. As of January 2019 and following the 2018 divestiture of Walmart Brazil with the sale to Advent (discussed in Chapters 6 and 7), Walmart Chile ranked seventh in number of stores (371) among Walmart International’s ten national and regional business unit—behind Mexico (2442), Central America (811), the United Kingdom (633), Africa (436), China (443), and Canada (411), and ahead of Japan (371), Argentina (92), and India (22) (Walmart 2019, 11). In square store footage, Chilean operations grew 11.1 percent over 2015 to January 2019 (Walmart 2019, 10), leaving it tied in Walmart’s pace of bricks and mortar expansion with India over that period and behind only regional business units in Central America (17.0 percent growth) and Africa (14.6 percent growth) (Walmart 2019, 11, authors’ calculations). Overall, Chile and Central America were Walmart’s growth markets in the region in the latter 2010s, with the divestiture in Brazil, net-zero growth in its biggest non-U.S. market in Mexico (where Walmart remains the country’s largest private employer), and slight retraction in Argentina (0.003 percent), the country to which we now return.

Argentina: Limits of Resistance and Scrutiny In Argentina, union/worker and state-regulatory/legal contestation of Walmart labor relations practices were modest and limited, and weaker than in Chile or Argentina. This is a somewhat counterintuitive general tendency for a country often considered to have the Latin American region’s strongest labor movement (by the metric of union density, for instance) and which had the left-populist, generally pro-labor Néstor Kirchner/Cristina Fernández de Kirchner Peronist governments in power during much of the period in question (2003–2015). Such enduring institutional features as the monopolistic, centralizing character of union representation and longstanding principle by which contractual provisions are renewed automatically if not explicitly changed by mutual agreement on their expiration date (known as ultractividad), along with an important gradual institutional change in the form of the push to re-centralize collective bargaining during these Peronist governments, were at best a double-edged sword for Walmart workers in Argentina. They meant that power was concentrated in a

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national-sectoral union and its member unions, which often suppressed shopfloor activism, limited the local implementation and reach of the legally mandated shopfloor delegate system, and maneuvered to mediate worker differences with Walmart and other retailers for their own institutional ends. Put differently, shopfloor-disempowering labor institutions along with comparatively weak labor regulatory and enforcement agencies were surprisingly resilient despite shifts in partisanship and pendular shifts in underlying economic model: from neoliberalism (under Carlos Menem from Walmart’s entry in 1995 to 1999), on through a succession of short-duration governments amidst the economic crisis and political protest that shook Argentina (2000–2002) and the aforementioned left-populist Kirchner-Fernández governments, and then through the center-right Mauricio Macri administration (2016–2019), as a new left government came to power in December 2019. As Carré and Tilly (2017, 183) note in their comparative chapter on Walmart’s labor relations around the world outside the United States, “Argentina’s retail union has historically tended to accommodate management [though] it has recently shown new militancy in putting pressure on Wal-Mart…” Before seeking to document and qualify the latter half of their insightful overview characterization, it is important to underline that the parent national retail union FAECyS and its municipal/regional locals (sindicatos de empleados del comercio or SECs)—much like dominant organizations in the Argentine labor movement as a whole (Murillo 2001; Ventrici 2018)—were oriented toward what Abal Medina labels in her research on supermarkets and call center workers as “business unionism” (sindicalismo empresarial ) (Abal Medina 2014, 2018)—that is, toward defense of wages and job security as well as direct or indirect provisions of social benefits (“from health benefits to club memberships and other recreational activities” per Abal Medina 2018, 12). The federation and member unions were fundamentally transactional (our term) rather than ideological in dealing with firms such as Walmart. Contesting power relations on the shopfloor in stores was not a fundamental concern, as it was for the independent unions studied by Bank Muñoz (2017, 2018) in Chile or CUT unions in Brazil, as discussed in Chapters 3 and 4. Indeed, such power relations were viewed more instrumentally in terms of how they affected the leadership group’s continued hold on the organizations (Abal Medina 2014, 161–214); nonetheless, the author does find some subtle differences in how union-delegateshopfloor activist relations played out at Walmart’s first (and until 2009

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only) store in Buenos Aires versus in her comparative case study of the nationally owned Coto supermarket chain, also in Bueno Aires, across the first decade or so of the century. Put differently, rather than cultivate associational power through close, participatory relations with rank and file, and in a context of weak structural power given the easily replaceable nature of the vast bulk of supermarket labor, they instead relied upon organizational resources that they controlled clientelistically and also participated in international Walmart worker networks. Abal Medina’s careful ethnographic and interview- and documentbased research reveals a schism between newly emergent shopfloor activism in the latter part of the first decade of the century that comes to result in the election of activist delegates for the first time, in antagonistic tension with sectoral and regional retail union leadership at Walmart. She argues that activists-cum-delegates were engaged in a “double confrontation’—against the conservative tendencies of business unionism (the union that represents them), and against the precarious practices being implemented by Walmart” (2018, 120). The latter, she notes, included the company’s effort to dominate variable bonus pay schemes; pay inequity across groups of workers; lengthening of the workweek without corresponding pay increases; the humiliating Walmart cheer and use of the term “asociado” to refer to workers and use of other Anglicisms in the workplace; “inconsistencies” in the open-door policy; anti-unionmember discrimination; “complicity” with management of some of the early delegates before the 2006 strike and 2007 election of activist delegates; abuses of a security and surveillance system run by former military officers with links to the preceding authoritarian regime; and disregard for legal standards in treatment of subcontracted store clerks (Abal Medina 2018, 132). The two-level conflict or “double confrontation” between workplace activists and delegates and union leadership on one hand and Walmart management on the other is illustrated by the discussion earlier in the chapter of the struggles to force unions to hold delegate elections at stores and then to elect true shopfloor activists rather than union allies. The strike and then successful first elections at the Avellaneda store contributed to the spread of delegate elections to other established and new stores, including one within the same regional jurisdiction of SECLA at the Constituyentes store (Abal Medina 2014, 212). Efforts to network among the activist delegates and those allies they could sometimes find within the leadership of SECs were revealed publicly by a

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brief work stoppage of over 1000 Walmart Argentina workers across several stores in solidarity with the Black Friday protests in the United States at Walmart stores in November 2012. Yet there is no evidence of other joint mobilizations against the employer outside of protests held at rotating gatherings of UNI Global Union’s (Union Network International) Walmart union network held in various countries and on at least one occasion in Argentina (Edelson 2019). The centralization of annual wage bargaining between the federation FAECyS and the respective national chamber of retailers precluded active participation by rank and file and delegates. Conflicts in 2017–2018 receiving press coverage at various stores centered on the firing of workers related to downsizing; efforts to pressure workers to sign contracts modifying their individual labor contracts so as not to lose their jobs; and the closing or sale of stores and pressure on workers quickly to accept a below-law severance sum within 24 hours or face a lengthy wait adjudicating their legal severance claims.14 SEC regional/municipal unions were important protagonists and in at least one instance had explicit support from the Federation. The general context was one of downsizing, with a reduction in the number of Walmart-owned and -operated stores (under various brands) from 108 in 2016 to 92 as of December 2019, and the workforce reduced to 9904 as of March 2019.15 Walmart Argentina had reached as high as third in annual super- and hyper-market sales in the country in 2015, but fell back to fourth by 2018.16 Compared to the expanded power of labor prosecutors, accessibility of labor courts, and professionalism of the labor inspectorate in Brazil and the increased activism of their historically pro-employer but evolving Chilean counterparts and the increased vigilance of labor standards by Chilean labor authorities, Argentine legal and regulatory institutions were decidedly weaker in their capacity to scrutinize and punish Walmart for legal violations. The inspectorate is undermined by low wages and lack of professionalization; understaffing; inadequacy of resources such as vehicles and telephones; a pattern of specialization across issue areas of labor law; occasional mismatch between professional capabilities of inspectors and the particular specialized areas of the law to which they end up being assigned; and an often debilitating fragmentation and dispersion of authority under a federal system (Piore and Schrank 2018, 81–90; Senén González and Palomino 2006; Amengual 2016). As of September 2008, for instance, only two of the city of Buenos Aires’ (Federal Capital’s) 320

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labor inspectors were hired on a full-time contract; in that city Walmart had three of its 13 stores in the country as of 2006–2007. Moreover, while there was a targeted federal enforcement push under the Kirchner government through the Federal Ministry of Labor which involved hiring 400 new labor inspectors, it focused on combating informality and regularizing unregistered workers and to a lesser extent egregious abuses such as child labor (Secretaría del Trabajo 2013). Amengual (2016, 60, fn 59) notes these inspectors “could not enforce many aspects of labor law that were commonly violated, such as nonpayment of wages, illegal overtime, unsafe working conditions, and violations of the terms of collective bargaining agreements. For many skeptics in the labor movement and in provincial governments, the program was seen as ‘tax collection,’ and people involved in inspection emphatically stated that the officials were not truly labor inspectors.” With the program’s focus on registering informal workers, inspection resources were targeted on small neighborhood markets rather than large supermarkets, where informality was much less common according to the Secretaría del Trabajo (2013, 73) itself.17 Instead, the more pressing problems in large supermarkets such as Walmart and Coto (Abal Medina 2018, 133, and 2013, 213) and other competitors (Guaiamet 2013 studies an undisclosed supermarket in Rosario that clearly is not Walmart)—in addition to the type of excluded issues noted above—was dualization of working and employment conditions between full-time unionized workers and those employed by subcontractors or as temporary or part-time or “non-payscale’ employees” often working through temp agencies. However, in one notable victory, the store delegates at the Avellaneda location were successful in pushing Walmart to agree that temps (eventuales ) must be hired on full-time contracts after six months (Abal Medina 2014, 212–213). Public data on inspections carried out at the decentralized level (that is, Federal Capital and provinces) are lacking in terms of allowing research to identify violations, fines, and inspections by firm or even sector. Based on internal data he obtained, Amengual (2016, 57, 129) does report that in 2007 in the capital inspections in commerce were seven percent of all inspections though workers constituted ten percent of the workforce, and despite the fact that commerce tends to have a high incidence of labor law violations. In the Federal Capital of Buenos Aires, which has over a third of Walmart’s own-brand Supercenters in the country, there was a notable decline in enforcement once center-right, pro-business

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Mauricio Macri came to office as mayor in December 2007 (Amengual 2016)—a post which he held until 2015 when elected president, the office he held till November 2019. In the city of Córdoba where Walmart had two supermarkets, by contrast, commerce was the most inspected sector based on a survey of inspectors (Amengual 2016, 76). With separate authority to enforce health and safety laws and regulations, the federal Superintendencia de Riesgos del Trabajo publishes only aggregated data, so it is impossible to assess the extent of scrutiny regarding injuries, accidents, and other issues. However, Abal Medina does note in passing that the activist delegates at the Avellaneda store did contact the superintendency—as well as the company and the union—regarding such issues at the store, apparently with some success in obtaining an inspection and some remediation.18 Overall, given different levels of attention to different issues, and by different levels of government and across provinces, the picture is one of an uneven patchwork, but generally low levels of state vigilance over a powerful company like Walmart. Information is lacking on fines assessed against Walmart, unlike the extensive assessments for violations in Brazil (Chapters 4 and 6) and Chile (discussed above). In addition to a weaker and more fragmented inspection system, there was no powerful agency with broad authority comparable to the activist career labor prosecutors bringing collective claims against the firm as in Brazil or the Dirección del Trabajo investigating and citing it for anti-union and -anti-labor-rights violations in Chile. Legal costs related to labor claims do not appear to have been the drag on profits that they were and became in Brazil, based on a dearth of mention of such issues in reporting on periodic changes in management and corporate moves in Argentina in the business press. There is no systematic coverage of individual labor claims against the firm, and in situations in which there were any rulings against the company it is the respective mandatory private insurer (Administradora de Riesgos del Trabajo) to whom it, like other firms in Argentina, must contribute that bears the immediate costs and court expenses; this circumstance reflects a “partial privatization of the labor inspection system” and “dejudicialization” of the individual labor justice system from the mid-1990s onward as well as a cap on fines and damages (Senén González and Palomino 2006, 133, 155). In addition, another reform from the neoliberal Menem period that also proved resilient in the left-populist Kircher-Fernández era and also tended to weaken individual legal claims-making against employers—in

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this case in the Federal Capital—was the creation of a mandatory prejudicial conciliation process between aggrieved (ex)workers and firms, called the Servicio de Conciliación Laboral Obligatoria (SECO). Individual cases of legal judgments against Walmart that received attention in the press involved sexual harassment19 and psychological harassment and dismissal of an employee suffering from a serious illness.20 In summary, the overall dynamic of institutional resiliency at the federal level consists of fragmented, decentralized system of labor inspection and a less accessible system of individual judicial claims-making, both stemming in large measure from neoliberal reforms of the 1990s. This system survived the crisis of the early 2000s as well as the shift in economic model—in addition to the isolated, piecemeal, and at best partially and unevenly successful efforts to shore up provincial and local-level inspection. This fragmented, patchwork “system” precluded significant legal-regulatory challenges to Walmart’s workplace and employment practices. Another part of the Argentine story of Walmart is the persistence of top-down business unions in the commercial and some other sectors who were able to quell and to some extent channel the challenge from a restive rank and file, even as this challenge altered in important ways the larger labor movement from the crisis of the early 2000s onward, and the state began to adopt a relationship with segments of this other working-class fraction outside unions and traditional labor institutions and mediated through social policy (Cook and Bazler 2013; Abal Medina 2014, 251– 258). With market reformers back in power from 2015 to 2019, some of these differences were blurred, as all these segments of the working class and labor movement found themselves on the defensive in economic and political terms. Worker-unfriendly legal institutions in Argentina, as well as a bureaucratic commercial labor union with weakening structural power and problematic associational power, combined to leave Walmart workers unable to mount a collective challenge to a restructuring that eliminated at least 11 percent of the company’s jobs over 2016–201921 or response to ongoing workplace difficulties. The contrast to the separate but more potent challenges mounted by competing national union organizations or alliances in Chile, as well as the costs incurred in the face of more unified and professionalized labor institutions in that country, is instructive.

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Mexico and Its Labor Institutions: Tailor-Made for Walmart’s Largest Foreign Outpost In choosing Mexico as the location of its first store outside the United States—a Sam’s Club in 1991—Walmart founder Sam Walton selected a neighboring country that was becoming increasingly integrated with the U.S. economy. This integration stemmed from its 1986 entry into the General Agreement on Tariffs and Trade (GATT) global trading system, based on the initiation of negotiations with the United States from 1990 and Canada from 1991 on what would become the North American Free Trade Agreement (NAFTA), and from historic market reforms initiated in 1982 and deepened after 1988. Walton also seemed to intuit that Mexico provided an evolving market- and business-friendly institutional and regulatory setting that was a natural fit for Walmart’s unique model of pricing, supplier relations, and logistics (discussed in Chapter 2). Yet— most important for present purposes—this fit was also like a glove for the anti-unionism and repressive familial workplace regime this book has shown were cornerstones of the LR/HRM model Walmart had pioneered in southern right-to-work states and was seeking to expand elsewhere in the United States and overseas. Not by coincidence, 1991 was the same year in which Walmart became the U.S.’s largest retailer, surpassing Sears and Roebuck. By the time Walton died the next year, as the United States’ richest man, the company’s joint venture with Mexican retailer Cifra had opened a second store in Mexico. In 1997, Walmart would acquire full ownership of these operations. By century’s end, it became the country’s largest supermarket retailer. By 2002, Walmart had become Mexico’s largest employer, surpassing the mark of 100,000 workers in 2003 with 633 stores and accounting for roughly two percent of Mexico’s GDP.22 Further expansion, detailed below, has ensued since. Contestation of Walmart’s labor practices has been extremely minimal, whether coming from workers and unions or from or through legal and regulatory institutions. It stands out as an extreme pole in this regard compared to our intermediate case of “limited” contestation (Argentina) and our cases of “significant” contestation (Brazil and Chile). The trend described below characterized Walmart of Mexico (sometimes known as Walmex) from its market entry and joint venture phase on through 2017–2018, which marks an inflection point with ongoing flux and still uncertain outcomes but where somewhat greater contestation arguably

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has arisen. Previous to that, there was only episodic, isolated, sporadic worker contestation of any organized nature. A situation of or approximating the phantom unionism or “union simulation” of protection contracts prevailed, and the larger relationship of Walmart to regulatory including labor authorities and institutions—in which such contracts were embedded—was one that could best be conceptualized as “collusion” or “capture.” Put differently, a direct analogy can be drawn between the institutional underpinnings of Walmart’s LR model and the international scandal exposed in 2012 by the New York Times and other outlets whereby Walmart systematically had bribed Mexican officials to obtain land use and other permits to foster its expansion and gain a leg up on competitors (Bartstow and von Berstrab 2012). This scandal, which also touched the company’s Brazilian operations (as discussed in Chapters 6 and 7) and initial market foray into India, first stemmed from an internal whistleblower and then an internal investigation revealing wrongdoing that was quashed at the highest corporate level. The unfolding scandal would result in the eventual fall of the parent company CEO and the board of directors from that time (not of Walmart Mexico but of the whole of the parent company). Finally, in June 2019 and after much legal wrangling, a combined $282 million fine was paid by the company to the U.S. Securities and Exchange Commission for breaking the Foreign Corrupt Practices Act in not following a global anti-corruption compliance program for over a decade and to the U.S. Department of Justice to settle criminal charges against executives for violating the Act (SEC 2019). (The Wall Street Journal [Tokar 2019] calculated the firm’s accumulated costs in investigations and compliance upgrades over more than a decade at around a staggering $900 million.) The tight, corruption-driven nexus between Mexican public officials and the U.S. giant exposed in slow motion by the revelations of that case is directly analogous to the nature of the company’s relationship to labor regulators (the labor boards or Juntas de Conciliación y Abritraje, or simply juntas) in each city or other local jurisdiction) as well as to the official, state-linked union confederations and labor lawyers who set up and maintained each spurious contract and gave it a thin veneer of legality. As the New York Times describes based on extensive investigative reporting:

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Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.

While the charges did not stem from payoffs and side payments to lawyers and union leaders to secure protection contracts for its workforce per se, these revelations about the company’s unlawful behavior put into critical perspective any notion that the company simply inherited a nefarious practice established among rivals and the firm it initially acquired (for instance, Tilly 2005, 206–207). In expanding this LR “model” to literally thousands of new stores that it built and operated over decades, Walmart clearly took protection contracts to a whole new unprecedented level of scope and coverage in its most profitable foreign market—it was, as market leader and in a context in which FDI is theoretically supposed to raise standards in developing countries by some accounts (as noted by Carré and Tilly 2017, 190), arguably not just “part of the problem;” for the cause of ending protection contracts pursued by countless NGOs, activist scholars, and labor activists in Mexico and their international allies over decades, Walmart lay at the very crux of the problem. In a broader sense, what disempowered Walmart workers and enabled Walmart’s LR/HRM model’s unfettered unfolding in the Mexican context was the overall static character of the essential features of a statedominated and autocratic system of employment relations throughout the time of Walmart’s operations in Mexico—spanning nearly the last decade of one-party-dominant authoritarian rule on through an additional 18 years of center-right governments after the turn to formal, multiparty democracy in 2000. Arguably, it is impossible to explain the firm’s unparallel competitive success in the country—compared to any of the countries where it has expanded and over such a lengthy period— without at least acknowledging a major role for the enabling features of employment relations institutions that helped it and competitors; these institutions enabled Walmart not only to lower costs but also to enjoy maximum flexibility in the workplace, and implant Walmart culture and the Walmart way in a mostly seamless fashion workers were powerless to resist.

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The atomization of worker agency is inseparably wrapped up in Mexico with protection contracts as an increasingly central empirical reality in retail and many other sectors as the country’s once corporatistprotective labor relations institutions (dating back to the 1930s postrevolutionary Mexican state) evolved in a more top-down autocratic direction with market reforms and an agenda of promoting labor flexibility and suppressing labor costs from the 1980s onward. As noted earlier, there has been some debate about how uniform are these secretive arrangements by which workplaces are preemptively walled off from unionization through deals that are filed with and sanctioned by local labor boards unbeknownst to workers as new sites of work or firms are being set up. While initially accepting the consensus view of Mexican labor scholars that Walmex has only protection contracts (Tilly 2005, 2006, 2007; Tilly and Alvarez Galván 2006), the U.S. scholar and a more recent co-author subsequently shifted gears somewhat to argue, in part based on additional contract analysis and fieldwork (Tilly 2006; Carré and Tilly 2017), that not all Walmart’s (or other retail including supermarket competitor contracts) are, in fact, protection contracts; some unions, they found, have been able to win significant but “limited” concessions from Walmart and other retailers on wages and benefits. Tilly (2006) and Carré and Tilly (2017) present compelling evidence that compares across the same occupations for the same year that shows Walmex to be slightly better than average on wages and in the mainstream on benefits (and one can find similar evidence in a search of wages posted online by workers and job-seekers comparing Walmex to major competitors).23 Yet there are a couple of limitations to their analysis and underlying assumptions that suggest a distinction without a difference in what Tilly (2014) calls the “beyond protection contracts” hypothesis. First, the assumption that the “literal definition” of a protection contract would be pay and benefits limited to the legal minimum is problematic—the counterfactual is instead what standard contracts negotiated by known unions with some relationships with members would negotiate, which have tended to go well beyond the legal minimum; in any event the authors elsewhere note that wages are also considered by retailers in light of concerns about employee retention in a high-turnover sector (Carré and Tilly 2017, AI-19). In this connection, scholars such as Jorge Robles (cited in Ramírez 2008) have noted that there can be periodic changes to the terms of protection contracts “’in order to adjust them to the conditions and circumstances that the firm requires [emphasis added].” Here

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the authors need to do more to demonstrate that there are genuine negotiations, as small differences across stores or firms or over time might just be unilateral and geographically specific updates to secretive protection deals involving no true give and take and adjustments to different local labor markets. In any event, the key point for present purposes about protection contracts is how they preempt and stifle collective action, since they give a veneer of legality to common anti-worker rights moves such as dismissing activists or those suspected of being activists—found, for instance, by Hérnandez Castro (2008, 2011) at the three Mexico City stores he studied. Such “troublemakers” can simply be deemed non-members by the union in order to ratify the firm’s decision to fire them (through the so-called “exclusion clause” requiring all workers to be union members by which a forcible monopoly of representation is maintained). It is also worth underlining the noteworthy finding by Durand (2007)—not addressed by Carré and Tilly (2017) or in Tilly’s other work on Mexico— that Walmart’s expansion and consolidation of market leadership was strongly correlated with an overall drop in sectoral supermarket24 real wages that was greater than that for retail as a whole or commerce as a whole or for manufacturing, over the 1994–2003 period (Durand 2007). Thus, somewhat lost in the “trees” of Carré and Tilly’s (2017) side-byside firm versus firm or store versus stores comparisons, or focus on year to year small changes, is the overall “forest” of declining wage norms in real terms for supermarkets as a whole. This apparent “Walmart effect” (our term) on Mexican supermarket wages is plausibly associated with Walmart’s consolidation of market leadership and the declining market share of competitors as well as backed by Durand’s data on rising sales per worker in Walmart compared to falls on the part of its (mostly locally owned) competitors. Finally, powerful evidence of the predominance of protection contracts nationwide25 comes from research carried out in 2016 by Sadka (2019) on a random sample of seven percent of all collective bargaining agreements (CBAs) under the federal labor board done in connection with the ministry of labor; the author found using a cluster analysis that 76.8 percent of CBAs had a distinctive set of statistical features that indicated a high probability of being protection contracts: short length; low frequency of contractual and wage revision; low number of employees in the bargaining unit providing names and signatures supporting the union; lower vacation days as measured against legal requirements based

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on seniority; low frequency of strike petitions; and low rate of submission of union demands to the court in renegotiation or strike processes. Walmart’s success in using the coercive power and untrammeled flexibility afforded by protection contracts and pro-employer, pro-labor-peace local labor boards to keep at bay genuine unionization is underlined by the ephemeral experience of the Walmart Workers Organization (Organización de Trabajadores de Wal-Mart ) in the 2007–2009 period (Hernández Castro 2011; González 2009). Reprisals and dismissals, as well as threats, undermined a fledgling organization which had some apparent external support from unions, NGOs, and anti-Walmart small business organizations as well as a degree of rank and file support in stores in the Mexico City metropolitan area. Until 2017, the only strike the company faced was when it first opened three stores in the resort city of Los Cabos, Baja California Sur in 2008. The buoyant local tourist economy raised the demand for low-wage service work and wage expectations, and the new hires quickly protested at both the company’s aggressive treatment and low wages; despite the threat of dismissals and the sending in of thugs to intimidate strikers, the strikers found support in the local affiliate of the official union Revolutionary Confederation of Workers and Peasants, Confederación Revolucionaria de Obreros y Campesinos (CROC), against the holder of the protection contract. In a 36-hour strike they gained some concessions on wages and a timetable for future raises and a CROC affiliate become the recognized union representative. The CROC was itself known as a bastion of protection contracts. The only significant legal reforms of labor laws (approved at the very end of the center-right PAN government in 2012 with support from the PRI and tacit support from the incoming PRI president) during this period and following the formal transition to multiparty democracy only strengthened employer flexibility, not seriously addressing the demands of independent unions for union democracy and the reform or extinction of labor boards. The Mexican system of labor inspection and labor justice also appears to have been no match for the power and abusive practices of the country’s largest employer, with a hand-in-glove relationship with the Mexican state underlined by the massive, high-level corruption scandal initially uncovered in 2012. Among these practices—common among supermarkets—were the following: violating overtime pay requirements for daily hours beyond the legal maximum (Carré and Tilly 2017, A1, 6–7; Hernández Castro 2008, 2011); resisting workers’ right to

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severance pay (liquidación) proportional to years of service (through such devices as having them sign a blank resignation form upon being hired); and—though variously legally sanctioned, enabled by protection contracts, or the result of non-enforcement—extensive use of temporary and other non-employee workers (39.5 percent of its workforce in 2012).26 Studies by Bensusán (2006) and Piore and Schrank (2018, 81– 90) note that labor inspection in Mexico is weak. They attribute this to a combination of underfunding, poor coordination in a federal multi-tier system and with many competing agencies with overlapping jurisdictions, discretionality in fine amounts, and inspector-per-worker ratios well below ILO-recommended levels. The absence of readily available publicly released data on inspections, particularly broken down by sector and/or firm, prevents a more detailed company-focussed examination. However, a freedom of information request from a news outlet did reveal that the supermarket/convenience store sector led the country in fines for work accidents in the first ten months of 2014: there were 72 incidents of fines, with Walmart included among the five companies fined (with no detailed breakdowns by company).27 Fragmentary data are available regarding individual labor claims against Walmart, suggesting a decent amount of litigious activity against Mexico’s largest private employer but with mostly meager outcomes for workers. In 2012, around the time of the revelations of Walmart’s bribery scandal, the head of the local labor board in Mexico City revealed that the daily average of labor claims filed by (ex-)workers against Walmart in that city is four. The main complaints being “unjustified dismissal, harassment at work [hostigamiento laboral ], mistreatment [malos tratos ], extensive unremunerated working hours, and cancellation of days of rest.” From 2000 to 2010, the official revealed, 743 cases were settled through mediation (conciliaciones ), though another 603 were still unresolved as of the second quarter of 2012.28 One exceptional case in terms of actually setting a precedent, however, resulted from a fired worker’s complaint that the company paid part of wages in-store vouchers redeemable only at company property—the case went to the Supreme Court as the company appealed from the labor board of Chihuahua’s decision, and the high court declared the practice unconstitutional, drawing an analogy to payment of agricultural workers in company scrip in the late nineteenth and early twentieth century prior to the Mexican Revolution, which had long since been outlawed.29

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The many problems of the overall system of individual labor justice identified by Bensusán (2006, 365), based on her interviews with firm and labor lawyers and officials from the federal labor board and two large local labor boards (Chihuahua and Mexico City), are “excessive discretionality, arbitrariness, and lack of professionalism and resources.” In a 2007 World Bank study, Kaplan and Sadka (2008) underline the apparent corruption or at least inefficiency in the system of court-appointed lawyers of the Mexico City labor board—in 56 percent of cases in which such lawyers won damages from judges, the workers whom they nominally represented never collected the damages (apparently variously because the amounts were too small to bother or they were unaware of the awards). The authors conclude that “firms take advantage both of workers who are poorly informed and of workers who find it more costly to collect an award after winning at trial” (Kaplan and Sadka 2008, abstract). In sum, both collective paths to contesting Walmart’s employment and workplace practices (or seeking meaningful material compensation) were effectively blocked given the autocratic nature and pro-employer tilt of its labor relations institutions from the 1980s onward. Meanwhile, individual paths were severely restricted by the bureaucratic, inefficient, and poorly responsive nature of its labor justice and inspection institutions. It is no accident that the first significant manifestations of organized collective worker contestation against Walmart Mexico more than two and half decades into its venture into Mexico occurred with the first signs of a possible liberalization of national LR institutions. In February 2017, a constitutional reform was passed that, if fully implemented, would have done away with labor boards, transferred the functions of adjudicating disputes to ordinary courts, created a separate conciliation service, and provided for transparent elections for unions and registration procedures (MSN 2017). Though the reform remained in limbo for the remainder of the presidential term and during the 2018 presidential election, without the passage of implementing legislation, in May of 2017 workers at around 20 different stores in at least six different central and western states owned and run by Walmart staged strikes or protests that shut down sales; this took place once they realized they had received a mere pittance by way of the obligatory annual profit sharing (reparto de utilidades ) based on the company’s reported 2016 profit, in amounts (varying by individual based on seniority) much less than the previous year.30 This was the single largest collective action by workers against Walmart since it came to Mexico in 1991, and the first to affect multiple

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stores, though it seems to have been only loosely organized. Unlike in Brazil (see Chapters 3 and 4), there is no requirement of negotiation with worker representatives about annual profit sharing. As a result of heightened scrutiny by public authorities of the company’s accounting (which included creating separate corporate units in Mexico for sales operations and for hiring of workers), the company began reporting much larger and more trustworthy profits in fiscal year 2018. A potentially larger dispute took place across some 120 Walmart stores in February 2019, with the new left-wing government in office since December 2018 of Andrés Manuel López Obrador (AMLO) promising in short order a progressive labor law reform (which would be passed by Congress on May 1, 2019). The passage and implementation of such a law was a key issue in the ratification and implementation of the updated NAFTA, known in English as USMCA or T-MEC in Spanish. (It was finally ratified by the U.S. Congress in December 2019, and entered into force on July 1, 2020.) With the days of the national labor institutions that were the linchpin of the protection contract model seemingly numbered and strike activity picking up notably around the country particularly with a strike wave in the Matamoros maquilas, the CROC’s affiliates quietly had gained contracts at the stores in question, many of them upon their opening and located in the second-tier cities in which Walmart has focused its expansion in the past decade or more. In 2019 the CROC took a preemptive move for organizational influence and survival in the seemingly new labor era that was dawning in the country, filing a strike petition for all these stores, forcing the company to the table. This move occurred shortly after a strike at the various Walmart-owned stores in the city of Colima,31 as a CROC union with 132 stores under contracts it had signed with Walmart filed a strike petition demanding a 20 percent wage increase (in the wake of a January increase in the national minimum wage). Three weeks later, in mid-March, an agreement was signed for a 5.5 percent raise, along with some expanded benefits, and the company announced that 92 percent of its workforce had received a productivity bonus based on 2018 performance.32 Walmex claimed that it was extending these terms to its roughly 2400 stores nationwide, and at the same time made a potentially historic announcement—it called for nothing less than a “new regime of collective bargaining, in order to better the value proposition of our associates, who will have the option of electing the union organization to which they wish to belong” (Walmart México 2019; Forbes 2019).

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The company’s implicit admission with this statement spoke volumes about the overwhelming prevalence of protection contracts and sham unions in its vast Mexican operations. The direct connection to the shift in legal and regulatory context prompting the announced policy reversal is also explicit in the next line of the statement (albeit with a not so subtle right-to-work phrasing): “With the proposed reforms to the Federal Labor Law, associates will be able to elect freely if they want to be represented by a union and to cover the corresponding dues in a direct manner” (Walmart México 2019, emphasis added). In another sign of shifting regulatory winds favoring just treatment of workers, when made aware in November 2019 of the use by Walmart and other supermarkets of retired workers aged 60–65 as volunteer baggers not receiving wages or any benefits from the company and working only for tips (in effect, they had become the replacement for the former minor volunteer baggers that were the subject of earlier child labor condemnation), AMLO ordered the labor ministry to investigate the practice and called on Walmart to end such unremunerated labor. The firm replied that the program was based on an accord with the Instituto Nacional de las Personas Adultas Mayores (INAPAM), a government agency for the elderly, and that these retirees were provided with health insurance through one of the two public health programs by arrangement with the INAPAM.33 The holding of transparent, democratic elections at Walmart stores and other employers throughout Mexico could prove historic. Yet, as research on Mexico for this book closed, much seemed to depend, first, on the protracted implementation process of the new labor justice system that would register unions and mediate conflicts and, second, on the extent to which the U.S. giant actually lives up to its modernized rhetoric. The global corporation’s track record of opposition to genuine freedom of association and collective bargaining and union rights—in Mexico, as well as Brazil, Argentina, and Chile, as well as by extension in many nations on three other continents where it operates—should lead to a clear-eyed assessment of prospects for such breakthroughs. In addition, the lack of a clear independent labor force or labor organizations with knowledge and experience in the retail sector prepared to fill the leadership void raises the possibility of the emergence of fragmented if more democratic unions— with some associational power but lacking structural power. Also, in some regions and locations, official unions with a recent protection union past such as CROC may prove resilient, trying to transform themselves into modern business/company unions. At the same time, the contours of

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new and revised institutions shaping labor inspection and individual labor justice were still blurry under the new law. In conclusion, the fundamental ambiguity of ongoing institutional reforms and contestation in practice over their terms and implementation will continue to shape the search for respect and justice of Mexico’s Walmart workers in a putatively new era being ushered in in that country and nearly three decades into Walmart’s dominant presence in Mexican supermarket retail. Walmart Mexico workers must traverse a considerable distance before they reach even the significant if still moderate levels of contestation exhibited in Brazil (through 2014 and as discussed in the previous two chapters) and noted in this chapter in Chile. At the very least, though, the era of Walmart’s untrammeled labor domination in Mexico—the company’s repressive familialism blending smoothly with coercive labor relations institutions and autocratic, corrupt official labor organizations—seemed to be drawing to a close.

Concluding Remarks The chapter has made the case that, despite a fundamental similarity in workplace culture and regime of repressive familialism and antiunion behavior and discourse, contestation on the part of workers and unions and regulatory and legal agencies diverged cross-nationally across Walmart’s contemporaneous operations in Chile, Argentina, Mexico, and—as detailed in Chapters 3 and 4—Brazil. Contestation was isolated and feeble in Mexico, significant in Chile (as in Brazil in the 2003–2014 period discussed in Chapter 4), and limited in Argentina. In causal terms, the strength of contestation was shown to be linked to the institutional features and patterns of change and continuity of the respective countries’ labor relations and labor justice institutions, with that change and continuity understood through the prism of agents of change (or continuity) empowered or disempowered and seeking to react to, interpret, or push changes. Progressive unions, and business and conservative unions, have been in the foreground as actors interacting with the company, workers, and state agencies, but state agencies and courts charged with adjudicating claims and disputes and imbued with their own institutional dynamics and statics at times and in places only imperfectly reflecting the parties and executives in power have also figured into the analytical narrative. In analyzing unions, the categories of associational and structural power have been particularly important, and how unions build them

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reflects not only institutional constraints and incentives but also strategic choices and thus institutionally nested agency. As is often true in processes of institutional change analyzed through a gradual institutional change (GIC) theoretical lens, small changes are sometimes cumulatively transformational. For the most part, what has been presented here, with space limitations, are analytical snapshots depicting broad national trends of contestation around Walmart’s labor and employment practices over periods spanning a decade or two in each of the three comparator countries. Yet notably as the arc of the company’s labor contestation trajectory in each country was brought closer to the present, seeds of change were observed to be germinating in each whereby key actors were operating within shifting competitive and economic as well as institutional parameters. Argentine business unionists were faced with corporate downsizing they are seemingly illequipped to resist even with political winds ostensibly now blowing back in their direction, with uncertain impacts. For their part, Chilean independent as well as newly combative business unionists were confronting a restructuring company in a country now undergoing a socio-political convulsion. Meanwhile, Mexican Walmart workers were wondering if a new dawn of democratic unionism may be on the horizon even as clever corporatist/official unions try to reinvent themselves yet again in chameleon-like fashion and protection contracts ostensibly fade into the rear-view mirror. Taking to heart this insight that durable relational patterns and degrees and modes of contestation from previous years may enter anew into flux, our story now returns to Brazil from 2015 to 2018 in its next chapter.

Notes 1. Dirección, Gobierno de Chile (2015–2019). 2. See El Cronista, “La representación sindical en la empresa,” July 23, 2018, https://www.cronista.com/fiscal/La-representacion-sindicalen-la-empresa-20180723-0035.html. Accessed March 7, 2019; and Abal Medina (2014). 3. http://www.annualreports.com/HostedData/AnnualReportArchive/w/ NYSE_WMT_2000.pdf. Accessed March 7, 2019. 4. Four stores, from three different geographic regions of Mexico City and all located in large shopping malls, were chosen from among the company’s 13 stores in the city at that time. Hernández Castro (2008, 86).

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5. Wal-Mart, “A Manager’s Toolbox to Remaining Union-Free,” 1997, http://reclaimdemocracy.org/wordpress/wp-content/uploads/2012/ 08/antiunionman.pdf. The toolkit’s existence has not been denied by the firm. 6. This section primarily relies on Abal Medina (2014, 2018) for Argentina; Bank Muñoz (2017, 2018) for Chile; and Hernández Castro (2008, 2011) for Mexico. All three conducted ethnographic research involving interviews with workers and workplace activists and/or union leaders and in some cases managers. 7. See Sindicato.CL, “Trabajadores de Lider bajaron la huelga: ‘La empresa nos dió un ultimatum,’” December 18, 2014, http://sindical.cl/tra bajadores-de-lider-bajaron-la-huelga-la-empresa-nos-dio-un-ultimatum/. Accessed May 17, 2019; and La Izquierda Diario, “Trabajadores de Walmart Chile en huelga,” December 16, 2014, https://www.laizquier dadiario.com/Trabajadores-de-Walmart-Chile-en-huelga. Accessed May 17, 2019. 8. UNI Global Union, “Walmart union Sindicato Interempresa Lider (SIL) in Chile reaches an historic agreement,” August 5, 2015, https://www. uniglobalunion.org/news/walmart-union-sindicato-interempresa-lider-silchile-reaches-historic-agreement. Accessed May 17, 2019. 9. UNI Global Union, “Walmart Unions Reach Agreement in Chile and Deepen Unity in Action,” November 15, 2015, https://www.uni globalunion.org/news/walmart-unions-reach-agreement-chile-and-dee pen-unity-action. Accessed May 17, 2019; and UNI Global Union, “Encuentro capacitación sindicatos Walmart Chile,” March 29, 2016, https://www.uniglobalunion.org/es/news/encuentro-capacitacion-sin dicatos-walmart-chile. Accessed May 17, 2019. 10. Sindical.CL, “Sindicato SIL y Walmart firman acuerdo sobre futuro de la automatización de sus servicios,” April 24, 2019, http://sindical.cl/ sil-y-walmart-firman-acuerdo-para-enfrentar-futuro-de-la-nueva-automatiz acion-de-sus-servicios/. Accessed May 17, 2019. 11. Dairo UChile, “Falta mucho por avanzar: huelga en Walmart llega a su fin pese a disconformidad de trabajadores,” July 16, 2019, https://radio.uch ile.cl/2019/07/16/falta-mucho-por-avanzar-huelga-en-walmart-llega-asu-fin-pese-a-disconformidad-de-trabajadores/. Accessed December 21, 2019. 12. Diario UChile, “Sindicato de Walmart Chile denuncia despidos masivos como represalia por participar en huelga,” October 3, 2019, https:// radio.uchile.cl/2019/10/03/sindicato-de-walmart-chile-denuncia-des pidos-masivos-como-represalia-por-participar-en-huelga/. Accessed December 21, 2019. 13. La Nación, “Crisis Social: Walmart Chile reubicó a más de 4 mil trabajadores de locales saqueados y no descarta despidos,” December 5, 2019,

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http://lanacion.cl/2019/12/05/crisis-social-walmart-chile-reubico-amas-de-4-mil-trabajadores-de-locales-saqueados-y-no-descarta-despidos/. Accessed December 21, 2019. See “Gremio de Comercio paraliza por tercer día el Walmart del DOT,” September 4, 2017, https://www.iprofesional.com/actualidad/255316despidos-walmart-protesta-Gremio-de-Comercio-paraliza-por-tercer-diaconsecutivo-el-Walmart-del-DOT. Accessed December 23, 2019; and FAECyS, “Comunicado de Prensa: Despidos arbitrarios en la cadena de supermercados WalMart,” July 14, 2017, http://www.faecys.org. ar/comunicado-de-faecys-55-despidos-arbitarios-en-walmart/. Accessed December 23, 2019; and Página 12, “Despidos masivos y cierres en locales de Walmart,” August 29, 2019, https://www.pagina12.com. ar/138601-despidos-masivos-y-cierres-en-locales-de-walmart. Accessed December 23, 2019. Walmart Argentina, https://corporate.walmart.com/our-story/our-bus iness/international/walmart-argentina. Accessed December 23, 2019. Empresas líderes en cada sector, Revista Mercado, 2019, p. 84, https:// issuu.com/revista-mercado/docs/ranking_las_mil_2019. Accessed December 25, 2019. “…by inspection experience, we know that there is practically nil detection in [large supermarkets] and high [detection] in [neighborhood markets].” Secretería del Trabajo (2013, 73). The problems included “lack of protective gear, inadequate work clothing, poorly maintained work instruments, situations of heat or cold stress, among others.” Abal Medina (2013, 203). “Indemnizan a ex cajera de un hipermercado por sufrir acoso sexual,” El Sol, July 26, 2013, https://www.elsol.com.ar/indemnizan-a-ex-cajerade-un-hipermercado-por-sufrir-acoso-sexual.html. Accessed December 27, 2019. Gestión Sindical, “Walmart Argentina deberá indemnizar a un trabajador que fue despedido mientras estaba enfermo,” April 15, 2019, https://ges tionsindical.com/walmart-argentina-debera-indemnizar-a-un-trabajadorque-fue-despedido-mientras-estaba-enfermo/. Accessed December 27, 2019. The former figure is from March 2016 and comes from Walmart Argentina, https://www.walmartargentina.com.ar/contenidos/nosotros/ argentina. Accessed December 27, 2019. The latter is from December 2019: Walmart Argentina, n.d., https://www.walmartargentina.com.ar/ contenidos/nosotros/argentina. Accessed December 27, 2019. Tim Weiner, “Wal-Mart Invades, and Mexico Gladly Surrenders,” New York Times, December 6, 2003, https://www.nytimes.com/2003/12/ 06/world/wal-mart-invades-and-mexico-gladly-surrenders.html. Accessed December 28, 2019.

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23. Glassdoor, “Sueldos en Walmart,” https://www.glassdoor.com.mx/Sue ldo/Walmart-Sueldos-E715.htm. Accessed January 15, 2019. 24. The category used is “tiendas de autoservicio” (self-service stores) which would also include convenience stores. 25. While commercial firms such as Walmart are under the jurisdiction of local labor boards, these data are suggestive insofar as the normal presumption is that protection contracts are even more common in local labor boards compared to federal ones. 26. The study cited is from the Universidad Tecnológica de México (UNITEC), Campus Sur, and was based on records of the Instituto Mexicano del Seguro Social (IMSS). Susana González G., “Wal-Mart sólo registra ante el IMSS a 6 de cada 10 de sus empleados: Unitec,” La Jornada, April 27, 2012, https://www.jornada.com.mx/2012/04/27/ economia/033n1eco. Accessed January 2, 2019. 27. La Silla Rota, “Walmart Encabeza Multas Laborales,” January 19, 2015, https://lasillarota.com/walmart-encabeza-multas-laborales/ 70430. Accessed October 6, 2020. 28. Laura Gómez, “Wal-Mart, primer lugar en demandas laborales: JLCA,” La Jornada, May 3, 2012, https://www.jornada.com.mx/2012/05/03/ capital/039n1cap. Accessed January 3, 2020. 29. Reuters, “Court outlaws Wal-Mart de Mexico worker vouchers,” September 5, 2008, https://www.reuters.com/article/mexico-walmex/ court-outlaws-wal-mart-de-mexico-worker-vouchers-idUSN0546591320 080905. Accessed January 5, 2019. See also Hérnandez Castro (2011, 9). 30. Héctor Briseño, “Reabren tiendas de Grupo Walmart en Acapulco,” La Jornada, May 24, 2017, https://www.jornada.com.mx/2017/05/24/ estados/033n3est. Accessed January 5, 2020; Rubicela Morelos Cruz, “Trabajadores llaman a boicot contra Grupo Walmart en Cuernavaca,” La Jornada, May 28, 2017, https://www.jornada.com.mx/2017/05/ 28/estados/027n2est. Accessed January 5, 2020; and Jorge A. Pérez Alfonso and Sergio Ocampo Arista, “Pagos de utilidades hasta de 73 centavos a los empleados de Walmart en Guerrero y Oaxaca,” La Jornada, May 22, 2017, https://www.jornada.com.mx/2017/05/22/est ados/032n1est. Accessed January 5, 2020. 31. Juan Carlos Flores, “Paro en tiendas de Grupo Walmart y Soriana en Colima,” La Jornada, February 14, 2019, https://www.jornada.com. mx/2019/02/14/estados/027n1est#. Accessed January 5, 2020. 32. Alejandro Alegría and Néstor Jiménez, “Walmart conjura huelga; aumento salarial de 5.5%,” La Jornada, March 15, 2019, https://www.jornada. com.mx/2019/03/15/economia/021n1eco. Accessed January 5, 2019.

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33. Fernanda Celis, “Walmart se lava las manos sobre adultos mayores empacadores,” Forbes México, November 11, 2019, https://www.for bes.com.mx/walmart-se-lava-las-manos-sobre-adultos-mayores-empaca dores/. Accessed January 6, 2020.

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CHAPTER 6

Labor Contestation Amidst Restructuring, Flexible Labor Reforms, and Walmart’s Exit from Brazil, 2015–2018

Abstract Faced with economic crisis, a rightward political shift, and flexible pro-employer labor reforms, commercial worker unions representing Walmart workers fought to limit real wage losses; to institutionalize in collective bargaining agreements limits on the reach of new national legal norms; to achieve results sharing agreements with the company; and to grope for organizational survival with the sudden abolition of the “union tax.” Individual and collective legal claims continued, with Walmart the most sued among large supermarket companies due to its repressive familial workplace regime and paying a hefty price in damages. “Institutional layering” captures how the enactment of national legal norms was mediated through struggles around the interpretation and “defanging” of anti-labor reforms in local practice, as a complex mixture of new and old emerged. Keywords Flexible labor law reforms · Labor contestation · Collective bargaining · Gradual institutional change · Institutionally nested agency · Institutional layering

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_6

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If the story of labor contestation at Walmart Brazil was brought to a close in 2014 with the events analyzed in Chapter 4, the present book would end on a mostly hopeful note regarding the degree of labor contestation. Key elements of that hopeful story would be embryonic if on/off national consultation-cum-bargaining within the broader profits- and results sharing (PLR) framework; growing pressures on the firm through labor inspections and actions by labor prosecutors; and Walmart workers, much like commercial and supermarket workers as a whole, sharing to some degree in the fruits of Brazil’s rapid growth in terms of wages and variable compensation. These elements would be notable even as the firm continued to be characterized by the hallmarks of precarious work in global retail in general and Brazil in particular— high turnover, long working hours, stunted occupational trajectories, and stressful work situations and working conditions. All this was true even as the abusive working conditions associated with the company’s repressive familial workplace regime and anti-unionist attitudes and behavior continued. If, instead, the book’s story left off with the 2015–2016 period, a key theme would instead be rising uncertainty, both about the firm’s competitive future in Brazil and the material fate and working and employment conditions of its workforce. This snapshot would be set within the larger economic context of recession and political setting of impeachment of a sitting Workers’ Party president, Dilma Rousseff, in August 2016. The firm was downsizing and its workforce shrinking, and national firm-level consultation through the respective unions belonging to the rival labor centrals seemed at best on hold, and to have definitively splintered into separate negotiations with progressive and center-right unionists—where talks happened at all. Perhaps at best the firm could survive Brazil’s crisis, and stanch its own bleeding, with a smaller footprint. Yet events were fast moving on both the labor and competitive restructuring fronts. In March 2016, two of the authors were contacted by a journalist covering Walmart from a US-based international news service, who had become aware of our research. The reporter asked us to assess rumors of the firm’s departure from Brazil as well as reasons for “elevated levels of labor claims,” for investigation for a story being conducted in collaboration with an in-country Brazil correspondent.1 Reporting from the Brazilian and international business press (detailed below and in the concluding chapter) came against the backdrop of specific charges against profits by the global parent and its international segment on several

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occasions across different fiscal years related to Brazil and particularly employment claims—focused on outward signs of declining performance, like cutbacks in stores and employment. The Brazil subsidiary’s position had become fragile amidst a strategic review of all stores and yet another move to close loss-making store units that was initiated in late 2015 and the early days of 2016 by a relatively new CEO in Bentonville who had led a “strategic review” of store units across the world. Walmart Brazil was put on notice by headquarters—either turn around its sagging fortunes or else face divestment within a larger restructuring of the company’s home-country and overseas operations. As it turns out, a deeper and more troubling tale of Walmart Brazil’s cumulative competitive and organizational failures over more than a decade in Brazil was slowly unfolding, yet would only come into sharper public focus starting in late 2017, especially as the firm began publicly to look for a buyer by the end of the year. These cumulative revelations led the authors to expand our ongoing research on labor contestation to shine a brighter empirical light on the connection between the company’s managerial model and its competitive difficulties. In particular, these troubles called forth a closer contemporary as well as a retrospective examination of the firm’s troubles with lawsuits and court cases relating to legal workplace abuses by Walmart—a story recounted in Chapter 4 that resumes in this chapter. In June 2018, Walmart Brazil’s troubled history had its denouement — in what amounted to the largest divestment of national operational control and assets in the history of the global giant; Walmart sold an 80 percent controlling stake to private equity (PE) firm Advent without the buyer paying anything directly to the U.S. multinational in exchange. As Advent streamlined and restructured operations and brought in a new management team, it reorganized into the Grupo BIG in August 2019, phasing out all Walmart brands except Sam’s Club. Never has Walmart stayed more than nine years in a host country and market—let alone 23 years, and in a market the size of Brazil’s—with a fully or majorityowned operation only to effectively withdraw from that market (though two other attempts were made to do the same, also in 2018, in Japan and the United Kingdom). Walmart’s Brazil débâcle costs the global firm dearly in immediate and cumulative terms that the chapter quantifies as best public data permits, and analyzes these developments with the help of reports by business journalists and our examination of legal cases against the company.

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The fate of the company’s workers—and those in supermarket retail and the economy as a whole—has also been challenged (and threatens to be much more deeply impacted in coming years) by further ominous regulatory developments that point toward at least a partial reversal of promising trends for workers and labor standards from the period captured in Chapter 4. However, flexible reforms did not stem the tide of the firm’s decline or sway the decision to leave the country. These employer-friendly reforms included a law substantially revising the labor code in a flexible direction (Law 13.467/17) and passage of a law deregulating outsourcing in mid-2017, both under the interim center-right “caretaker” government of former Vice President Michel Temer. This government took more decisive and rightward-leaning policy actions in this and some other areas than political observers had anticipated from a government with a questionable legitimacy and mandate for major conservative change. While the labor law reforms became effective in November 2017—as the gradual institutional change (GIC) perspective developed in this book helps highlight—provisions of the complex new law subsequently were contested in the labor courts and in struggles over implementing regulations as well as over the terms of everyday implementation by unions and in collective and direct employer bargaining processes. Institutionally nested agency taking advantage of the court system and space for negotiations over results sharing, on the part of unions, labor prosecutors, individual worker litigants, and labor prosecutors, thus continued during Walmart’s last phase in Brazil (and on into Advent’s ownership). Labor contestation, it is argued, was weakened by the economic conjuncture and then by formal-legal reforms, but not by any means eradicated or eliminated. Much struggle became about enacting and interpreting the terms of reforms—or defanging them—in a process that was still open-ended and inconclusive through the company’s departure and (as discussed briefly in the concluding chapter) initial Advent ownership. Even with reforms making it harder to file new claims, for instance, individual and collective suits against Walmart continued to wind their way through the labor justice system, with Walmart’s legal losses mounting. The structure of the chapter is as follows: The first section presents a brief overview of the country’s turbulent economic and political trajectory from 2015 through the end of 2019, noting the impact on the commercial and supermarket sectors and employment. Then attention shifts, in

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section two, to the altered contours of wage and results sharing negotiations, showing some defensive accomplishments by workers even amidst firm restructuring and economic slowdown. The third section considers the evolution of work flexibility at Walmart and Walmart-legacy Advent operations in light of the gradual institutional change prism for understanding contested implementation of the 2017 labor reform. In the fourth section the heavy continued weight of collective and individual legal claims against Walmart is discussed. Concluding remarks situate the evolving arc of labor contestation of Walmart Brazil over its last four years within the context of gradual institutional change and institutionally nested agency.

Walmart Last Years in Brazil: Turbulent Times Economic and political turbulence brought the mostly good economic times of the 2004–2013 period in Brazil to an abrupt halt. Stagnation in 2014 (gross domestic product or GDP growth of only 0.5 percent) gave way to formal and steep recession in 2015–2016 (−3.5 and −3.3 percent rates, respectively) and then an anemic recovery with growth rates of only 1.3 percent in 2017 and 2018 and 1.1 percent in 2019.2 A corruption scandal that erupted in the fourth quarter of 2015 enveloped the country in an impeachment proceeding, a formal investigation by a federal judge of former President Lula, the collapse of the governing coalition between the Workers Party (PT) and more conservative allies, and demonstrations by opposition forces and counterdemonstrations by government supporters. A May 2016 impeachment vote suspended Dilma from office for 180 days, bringing to office center-right Vice President Michel Temer (from a different political party), and permanent removal from office was confirmed in a September 2016 congressional vote. As a result, Temer remained as president through the end of the presidential term in December 2018. Economic and political turmoil seemed to feed off each other, and mistrust ensued as the impeachment (and jailing of Lula for 580 days through November 2019 on corruption charges) was seen by PT supporters and CUT unionists as a sort of “coup” by conservative judges and elites, and the country remained sorely divided. Divisions only grew after Lula was not allowed to stand for election again based on pending charges and a little-known right-wing populist

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legislator with a military background, Jair Bolsonaro, won a run-off presidential second-round election against the PT’s candidate in October 2018. Bolsonaro took office for a four-year term in January 2019. With support from the business community and a technocratic cabinet and hoping to impress investors, the Temer government (2016–2018) succeeded against fierce union opposition in passing a major labor law reform imposing several forms of labor flexibility in July 2017 (Law 13.467, effective November 2017) as well as, in March 2017, an outsourcing law (Law 13.429, effective July 2017). The latter law made outsourcing through agency temps easier and cheaper, tripling the length of outplaced temporary work contracts through temp agencies (from 90 days to 180 renewable for another 90 days); clarifying the sole legal responsibility of the agency rather than the firm in which temps are placed; and removing protections enjoyed by full-time workers in areas like working hours, overtime, severance pay, and social security contributions (DIEESE 2017a). While specifics are discussed in greater detail below, broadly speaking the complex, pro-employer, flexible labor law reform introduced or expanded employers’ ability to hire workers on a variety of atypical contracts with fewer or no protections (contractual flexibility); to shed workers at lower cost (external/numerical flexibility); and to institute an hours bank flextime working schedule unilaterally (working-time flexibility). The reform also made it more difficult and risky for individual workers to file employment claims as well as dealt a hammer blow to the main form of union financing. Even before Brazil fell into full-fledged recession or political turmoil deepened, Walmart’s performance was lagging, as it seemed both overextended and poorly integrated after its latest expansion in the early 2010s. By February 2016, Reuters reported based on confidential sources within the company that Walmart Brazil—which was included in consolidated financial statements by Walmart as part of the Walmart International “segment” and never separately reported profits or losses or issued detailed financial statements—had registered operating losses for seven consecutive years, meaning calendar years 2009–2015.3 Over 2008–2016, there were four different changes in top leadership of the Brazil subsidiary. Two key moves or announcements along the path of Walmart Brazil’s restructuring and overall downsizing—ultimately culminating in its June 2018 disinvestment through sale—were large-scale store closures announced, tellingly, by the global parent in September 2013 (closing 30 stores, as noted in Chapter 4) and then in December 2015–January 2016 (closing

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Table 6.1 Walmart Brazil to Grupo Big: contraction, restructuring, and new ownership Year

No. Stores

Workforce*

States

2014 2015 2016 2017 2018 2019 2020

556 499 471 465 n.d. n.d. 401

72,744 65,000 55,000 54,945 50,000 (est.) 51,200 n.d.

18 + 18 + 18 + 18 + 18 + n.d. n.d.

capital capital capital capital capital

Municipalities

Square store footage

215 203 203 n.d. n.d. n.d. 186

33,028,000 30,675,000 30,642,000 29,824,000 n.d. n.d. n.d.

* Workforce data from company for 2014–2017 and from public sources for 2018–2019 Sources Walmart Brazil, Relatório de Sustentabilidade, 2014, 2015, 2016; Walmart Inc. Annual Report, various years; and Ranking ABRAS (Associação Brasileira de Supermercados), various years. Bold figures refer to 80 percent ownership by Advent, from August 2018, transformed into Grupo BIG from August 2019. Compiled by the authors

60 stores), decisions both discussed in greater detail below. Over the period from 2014 to 2017, based on data compiled in Table 6.1, the total number of stores dropped by 16.5 percent, the total workforce was cut by 25.5 percent, and total store square footage fell by 9.6 percent. At the same time, as highlighted in Table 6.2 and discussed in further detail in the concluding chapter, the company’s market share and annual sales revenue both fell, and key performance metrics in Brazil either failed to improve significantly despite restructuring and cuts or actually fell. However, far from a simple or orderly wind down, the company’s statements, periodic shifts in management, as well as concrete actions—like opening new stores as well as announcing large new investments as late as early 2018—belied any sense of a smooth, predetermined course toward market exit. What was clear, even at the time, was a picture of a company in trouble, making moves to close loss-making units, and struggling to find its footing in a market whose size and whose tentative moves toward macroeconomic stability made it seem like its operations there were, one might say, “too big to abandon” (our term) but at the same time exceedingly problematic to turn around. All of this occurred against the backdrop of a larger global restructuring of Walmart International operations, whose overall contribution to Walmart’s revenues and profitability had peaked around 2012–2013 and was declining thereafter, as detailed in the concluding chapter.

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Table 6.2 Walmart: declining key performance indicators Year

2014

Sales revenue (nominal Reais)

R$29.6 billion 2015 R$29.3 billion 2016 R$29.4 billion 2017 R$28.2 billion 2018a R$23.0 billion 2019a R24.5 billion

Annual real rate Market share of revenue of top 20 growth supermarket (inflationretailers in adjusted Brazil Reais)

Sales revenue per square store feet (inflatedadjusted Reais)

Sales revenue per employee (inflationadjusted Reais)

[base year]

15.7%

−8.9%

14.5%

R$896,209 [base year] R$868,923

R$406,906 [base year] R$410.064

−8.8%

16.3%

R$875,619

R$487,831

−8.5%

15.0%

R$912,963

R$495,553

−21.4%

13.1%

n.d.

R$443,141

+2.5%

n.d.

n.d.

n.d.

a Majority ownership by Advent from June 2018 and operational control from July 2018,

transformation into Grupo Big in August 2019 Sources Walmart Brazil, Relatório de Sustentabilidade, 2014, 2015, 2016; Walmart Inc. Annual Report, various years; Ranking ABRAS (Associação Brasileira de Supermercados), various years. Inflation figures used to adjust columns three, five and six from World Bank, https://data.wor ldbank.org/indicator/FP.CPI.TOTL.ZG?locations=BR. Accessed September 22, 2020. Years in bold correspond to 80 percent ownership by Advent, from August 2018, transformed into Grupo BIG, from August 2019

Conflictual Cooperation in Hard Times Brazilian workers and unions were put more squarely on the defensive from mid-decade onward, including in the supermarket space, yet the crisis was deeper and sharper at Walmart and for its workforce. The broad fallout of slow growth punctuated by sharp recession was leaner times for overall supermarket and hypermarket employment, albeit not outright contraction or the kind of staffing cuts registered by Walmart. After only 9415 net jobs were created in the supermarket/hypermarket segment of retail commerce in 2015, rates of growth were 1.2 percent in 2016; 0.1 percent in 2017; and 3.5 percent in 2018 (ABRAS 2018; Agência IBGE 2020; DIEESE 2016, 2017a). After increasing annually at rates between 1.4 and 2.0 percent over 2010–2014, average real wages of commercial workers in Brazil (about

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two-thirds to three quarters of whom are in retail) stagnated, growing by only 0.3 percent in both 2015 and 2016. On the one hand, this development showed some capacity of commercial workers’ unions to shield workers from a spike in inflation in 2015 that moderated only somewhat in 2016. This holding of the line against major wage cuts occurred despite an ebb in strike activity in 2015–2016, with only 73 person hours lost in six strikes in 2015 and 13 hours in three strikes in 2016; this compared to an annual average of 279 hours lost in an average of 10 strikes annually over the fairly conflictive 2012–2014 period,4 discussed in Chapter 4. Yet on the other hand, a nationwide study of wage agreements covering supermarkets and hypermarkets in particular found that capacity to shield wages’ real purchasing power declined temporarily amidst the recession. After consistently showing real wage gains vis-à-vis inflation in over 95 percent of each year’s contracts over 2010–2014, the share of contracts covering supermarkets and hypermarkets in 2015 and then 2016 either just keeping pace with inflation (31.7 and 41.6 percent, respectively) or falling behind it (16.7 and 29.1 percent, respectively) grew quickly (DIEESE 2017b, 17). The end of the recession brought some relief on the wage front for supermarkets and other commercial workers. By 2017 and 2018, the formal end of the recession and resumption of modest growth occasioned a resumption of the share of supermarket and hypermarket contracts with real wage gains (61.3/72 percent) or equal to inflation (38.7/24 percent). No contracts in the study showed real losses in 2017 and only four percent entailed losses in 2018, with a real average wage gain of 0.55 percent in 2017 and 0.59 percent in 2018 (DIEESE 2018b, 10; 2019b, 8). This improvement in wage bargaining outcomes, amidst a slow recovery, was correlated with an uptick in strike activity among commercial workers, with seven strikes and 320 hours lost in 2017 and six in 2018 with 325 hours lost, more than doubling the level of strike intensity from 2016 (DIEESE 2019a, 49–50). A limitation for analysis is that these strike data are not disaggregated by the segment of commerce. Our best available window into wage trends at Walmart and other supermarkets are through such aggregate data. Commercial workers’ unions, representing in multiemployer bargaining all those workers in their municipal or pan-municipal territorial base in the food retail sector vis-à-vis the respective employers’ union (sindicato de empregadores ) for that segment, thus maintained some residual bargaining power even in a difficult political and economic environment. At the same time, they

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remained powerless to combat high rates of turnover in the still lowwage, precarious sector exceeding 30 percent per annum. These rates, in turn, were intertwined with a growing gap between the wages of existing workers and those being hired, as well as a gap between the highest and lowest wages (DIEESE 2016, 2017a). Even though such turnover rates declined somewhat in 2015–2016 and then leveled off around 35 percent in 2017, Fig. 6.1 reveals that this modest reduction only meant a return to the “historic” levels of problematically high turnover of the pre-boom years of the early century. In terms of annual results sharing (PLR), which is firm-specific and supplementary to wage negotiations, the picture is mixed and somewhat fuzzy. Overall, the available evidence suggests only an episodic company-level “social dialogue” like in previous years continued and that, where it took place, it was fragmented by national labor center affiliation. In addition, within larger shifting institutional constraints of uncertain impact and magnitude for the actors experiencing them related to the 2017 labor law reform, unionists exercised negotiating agency to try to protect their organizational resources. They took these actions even as 60% 50% 40% 30% 20% 10%

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

0%

Fig. 6.1 Annual employee turnover in supermarkets (Notes: Combines classifications for “wholesale commerce of general merchandise” [CNAE 51.9] and “non-specialized retail commerce” [CNAE 52.0]. Captures universe of firms with over 30 employees. Data gathered from government data base RAIS [Relação Annual de Informações Sociais, or Annual Register of Social Information]. Elaboration by the authors)

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they sought to maximize this source of contingent compensation in a context of much more difficult annual wage bargaining than the earlier period discussed in Chapter 4. There is no record of results sharing negotiations or agreements over 2015 or the first three quarters of 2016 with any unions, including in our own search of CONTRACS (Confederaçao Nacional de Trabalhadores no Comércio e Serviço) archives. Lemos (2018/2019) reports that there had not been negotiations with affiliated unions over PLR “in recent years” based on her interviews with leaders of unions representing Walmart workers in Osasco and Campinas (São Paulo State), the former of which is CONTRACS/CUT (Central Única dos Tralhadores ) affiliated and the latter affiliated with UGT (União Geral dos Trabalhadores ); in the State Federation Fecomerciários and in turn the CNTC (Confederação Nacional dos Trabalhadores no Comércio), part the center-right commercial workers bloc); and in João Pessoa (Northeastern state of Paraiba, also CONTRACS/CUT-affiliated) and at CONTRACS itself (Lemos 2018/2019). However, there were attempts at negotiations. CONTRACS and the Osasco union, SECOR, published a news item in January 2017 regarding the preparation of a set of issues and demands that it was to present to Walmart for scheduled PLR talks. The union sought to engage management in a discussion of “layoffs” and of “union ratifications of individual contractual rescissions” (homologações )—the latter a legal obligation that is key to workers’ accessing any severance benefits via the official Guarantee Fund for Time of Service (FGTS) or unemployment benefits and making sure that their social security contributions have been duly registered and paid up by the firm. There is no indication an accord was reached, though the agenda items speak to how much downsizing issues may have overlaid the agenda from the point of view of unionists and been a nonstarter for the company. Within this same time frame, in October 2016 the CNTC confederation, the umbrella organization of the center-right bloc of commercial workers, negotiating on behalf of many commercial locals in São Paulo’s capital and interior as well as in several other states, did reach an agreement that it claimed covered 65,000 Walmart workers (which included those at stores that had been closed). The accord set performance targets to be reached by the end of May 2017 in order for bonuses to be paid out. The agreement seemed to unify what had been separate negotiations with all of these affiliated unions. In June 2017 it was reported that 30 percent of the overall results sum set aside for distribution (an amount

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not disclosed) would be paid “to commercial workers” and 70 percent to workers in those stores meeting the targets; this apparently refers to the distinction between individual benefits given to all versus additional lump-sum, by-store benefits that were contingent on overall store performance.5 A human resources (HR) manager for Walmart is quoted by a union news item as referring to the accord as “historic” because it created a “sole platform for all our workers nationwide,” noting that a “group of workers was elected internally to discuss the agreement and to monitor its impacts monthly.”6 CONTRACS does not appear to have taken part in these negotiations, nor is it clear if the terms of this agreement were extended to cover workers represented by its member unions, whatever their lack of a formal role. It seems they were not, in fact, covered, and it is worth recalling the different visions of PLR on the part of different union currents discussed in Chapter 4—progressive unionists opposed making a large share of results bonuses contingent on management decisions at stores, which in their view would foster competition among workers at different stores and also tie worker access to results bonuses to management decisions at particular stores over which they had no power or control. Toward the beginning of the decade at a time of growth in retail commerce, the confederation expressed that “it is careful to negotiate profit and results sharing in such a way as not to accept abusive goals, which harm workers, or to establish goals or differentiated and unequal payments among the workers from the same chain.”7 The splintering of previous attempts to negotiate jointly across CONTRACS and the center-right commercial union bloc, as well as of the greater unity apparent in the early 2010s and in the October 2013 joint protest letter about store closures, occurred despite the fact that both CONTRACS and various unions and federations from the CNTCled bloc both continued to participate in annual meetings of the Walmart Global Alliance of unions during this period. The support of the UNI Global Union’s Americas division in Brazil, in fact, was cited by the CNTC as an important source of support for the national agreement.8 In February 2018, even as the multinational was actively seeking a partner or buyer for the Brazilian subsidiary, the CUT-affiliated CONTRACs confederation, representing a considerably smaller share of Walmart’s workforce, reached its first agreement in some years with Walmart. Besides unspecified terms of results sharing, the accord

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included a “solidarity negotiating dues” provision (contribuição negocional solidária) as well as a stipulation maintaining existing social clauses until such time as the covered unions signed their collective bargaining agreements later that year. The two provisions take on importance in light of the labor law reform of July 2017 that took effect in November of that year and challenges it posed to unions—notably (1) the immediate end to obligatory annual union tax withholding by which unions and federations and confederations (and also the Labor Ministry) historically received funding based on one day of each worker pay (dating all the way back to the 1930 labor code)—and (2) the end of the principle of “ultratividade” (automatic carryover or roughly “retroactiveness”) of noneconomic or “social” provisions of contracts until such time as a replacement accord or convention was negotiated and ratified. In other words, CONTRACS unions managed to resolve at least in the short term some of their immediate institutional and negotiating dilemmas post-2017 labor reform through the agreement, in addition to achieving results sharing bonuses for workers. This exercise of union agency occurred against the backdrop of larger legal challenges to the union tax provisions that were playing out in labor courts, both responding to and taking advantage of ambiguity in the new rules of the game for union financing. There is no record of a PLR accord in 2018 (with the sale to Advent completed and effective mid-year) for the center-right bloc led by the CNTC. Nor is there indication whether the basic targets agreed to in 2016–2017 in any way were carried forward. It seems as if the issues were shelved amidst the company’s crisis and the process of it being sold. Results sharing negotiations within the context of the Adventowned Walmart Brazil, which became Grupo BIG in August of 2019, are discussed briefly in the concluding chapter. Though institutional vestiges of national company-level bargaining processes begun in the 2000s and discussed in Chapter 4 thus remained, they were not a venue for discussing the terms of mass workforce reductions and store closures per se, as demonstrated by the CONTRACS’ failed efforts in 2017. As noted above and discussed at further length in the next section, these decisions—closing of 25 stores announced in October 2013 and of first 30 and then a total of 60 announced in December 2015–January 2016—were announced suddenly, unilaterally, and based on multicountry restructuring decisions from Bentonville headquarters. Notably, the former round of closings drew a rare unified joint rebuke across the center-left and center-right blocs in the joint protest

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letter to the company discussed in Chapter 4, complaining of lack of consultation and of hearing about the decision only through the media. The substance as well as process of that move seemed to further poison already conflictive labor–management relations for several years hence. However, the contrast with the 2015–2016 closures (which occurred amidst the recession) is instructive: the leader of the largest union local of commercial workers in São Paulo (SEC-SP) and influential voice within the state-level federation Fecomerciários, Ricardo Patah, said he had received assurances from the company, with the initial announcement of 30 closings, that workers would be given the option to either transfer to other stores or to take whatever they were legally due in severance and unemployment insurance and receive at company expense a training course relevant to future employment outside the company. Patah indicated a few weeks later, at the time of the additional 30 closures in mid-January, that the firm had kept its promise and that three quarters of the 4000 affected workers had chosen to accept transfers.9 Even with a few new store openings and some transfers of workers from closing stores, the downward trajectory in overall Walmart Brazil employment was apparent. By the end of 2016, the firm had roughly 10,000 fewer workers, or 18 percent less, than in 2014 (Table 6.1) and roughly 25,000 fewer than it did at the end of 2012. This decline over 2014–2016 was composed of some combination of, first, jobs lost through “normal” high turnover (attrition, dismissals) that were not filled at remaining stores; second, those who did not accept transfers from closed stores; and, third, the roughly 800 workers in the company’s downsized e-commerce operation laid off in December 2016 (which ceased first-party operations where it bought goods from producers and then resold them to focus exclusively on third-party sales through its platform where it acted as only intermediary between customer and producer).

Work Flexibility and Gradual Institutional Change Returning to the multidimensional concept of work flexibility employed in previous chapters, it is possible to disaggregate and depict concretely the complex relationship between de jure legal reforms and an adverse economic environment for workers, on one hand, and the de facto practice of collective bargaining and union activity in the case of Walmart. While legal norms shifted significantly from 2017, they were contested

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in their implementation and interpretation at the national and/or local level after their formal promulgation in November 2017. We argue that the substance of collective bargaining as well as union governance reflects a slow creeping in of some new legal norms, the persistence of others from previous laws in tension with new de jure norms, and overall an institutional layering —a modality of institutional change from GIC theory discussed in earlier chapters. Institutional layering can be directly contrasted with the kind of institutional displacement —with the “new” completely sweeping out and replacing the “old”—that is sometimes reflexively associated with theoretical views of the enactment of major labor reforms and constitutes an alternative scenario of (abrupt, discontinuous) institutional change in the typology underlying GIC theory. This section depicts an ongoing struggle within and among labor and business over how to interpret and act within the new rules, particularly when aspects of the operation of new norms were cloudy and subject to actual or potential challenge or reinterpretation on the part of career laborcourt judges, labor prosecutors, and labor inspectors. All of the latter state actors on the whole do not seem to have embraced the thrust and spirit of many dimensions of reform that on their face dramatically altered the balance of power in employers’ favor. To a lesser extent, the legislature enters into play, as perceived gaps, ambiguities, or limitations in the reforms—as well as malign political motives—gave rise to various executive decrees (medidas provisórias ) by which the new Bolsonaro government sought to enact further reforms weakening labor protections. While discussion is restricted to those enacted in the first nine months of his term (the time of Advent’s transformation of legacy Walmart operations into Grupo Big), Congress generally did not act to turn these measures into permanent laws, letting them expire after 180 days. In addition, courts altered or declared unconstitutional some aspects of these decrees. A separate discussion is presented in the following section of legal claims-making.

Local Adaptation and Resistance to National Reform: Collective Bargaining The focus shifts now to the three case study unions from previous chapters by analyzing the terms of their collective bargaining agreements (CBAs) from the 2015 to 2019 period,10 which spans Walmart’s last three years as majority owner and the initial period after Advent’s takeover in August

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2018. Insofar as employers seek to shield themselves from collective and individual claims as well as regularize employment relations by enshrining practices and shifts in practices in legally binding CBAs, such accords are an important gauge of the extent to which de jure national norms are reflected in de facto practices and de jure local contractual norms. An important caveat, however, is that it is difficult to know in the short-time frame in question whether employer violations of these norms became more common. It may have been possible, for instance, for companies to take advantage of the greater difficulties in bringing new individual complaints, an issue explored below. The discussion relies primarily on summaries and analysis of provisions of the labor law from a guide to implications for commercial establishments from a commercial employers’ union (SINCOVAGA-SP 2017), the Brazil office of KPMG (2017), and a labor judge and scholar (Fernandes 2017). A basic principle enshrined in the reform law is that “what is negotiated” (o negociado) prevails over “what is legislated” (o legislado) (“prevalência do negociado sobre o legislado”). This means in effect that workers and unions can “negotiate away rights.” It refers, among other items, to rest breaks; offsetting hours worked above or below normal; identification of positions of trust not subject to unionization and without the need to control working hours; home office, on-call systems, and intermittent work (zero hours contracts); vacation date flexibility; and the selection of employees’ representatives in the workplace. While this principle is intended to remove the floor of legal protections in a number of areas by making them subject to a potential downgrading in bargaining (under a neoliberal vision of maximal employer flexibility), a predictable if unintended consequence is created: based on our three municipal case studies of CBAs covering supermarket workers, unions have undertaken with some success to codify in contracts limits, processes for implementation, or exceptions to specific new national norms (as well as a silence on some norms that can be interpreted as a stance of disallowance). The upshot is that a genuinely bilateral set of institutions is reformulated at the local level that is somewhat distant from the maximal flexibility envisioned by the law’s sponsors, advocates, and defenders—in short, a process or instance of institutional layering that creates complex hybrids or amalgams of old and new norms. This exercise of agency by commercial worker unions to use collective bargaining to codify limits to the national reforms and guide their gradual, specific, and limited implementation in particular workplaces—including preserving many norms from

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preexisting CBAs—illustrates vividly the kind of maneuvering found in circumstances of new laws whose implementation is subject to contestation, ambiguity, and interpretation. Furthermore, it is argued, unions took advantage of employers’ and their collective organizations’ desire for the predictability and regularization conferred by contractual instantiation of vague new national norms. Unions also benefitted from organizations’ (employer unions’ known also as sindicatos ) apparent desire to ensure their continued relevance as a negotiating agent and guardian if not setter of rules as well as stability in membership funding mechanisms with the end of the compulsory union tax that hit worker unions and employer unions equally. Numerical or external flexibility was in many ways the most visible form of heightened flexibility from 2015 at Walmart due above all to store closures. Aggregate data for supermarkets showed continued high levels of worker turnover albeit with some decline after the recession’s formal end, as shown in Table 4.2. Unions were powerless to shape these decisions, except for the late 2015/early 2016 store closures where assurances were received (not negotiated) about the option of transfers. Workers had their individual severance accountsand, if eligible based on work history, unemployment insurance (UI) as a fallback, with all the limitations UI discussed in Chapter 4. However, no additional voluntary departure incentives (or commitments to respect seniority in layoffs) were offered, beyond the reported training programs for those not accepting store transfers from the closures in December 2015–January 2016 (programs of unknown size, duration, and quality). One of the provisions of the 2017 labor reform took away unions’ obligatory role in verifying and signing off when a worker’s contract is ended (homologação de contrato). This is an important function in that union lawyers can make sure that employer contributions to the worker’s severance account are paid up and also advise the worker about her legal rights in terms of payment of advance notice, access to unemployment insurance where eligible, and so forth. Another provision of the reform allowed for an additional means of dismissal called “by mutual agreement” (por comum acordo), which can be disadvantageous for workers compared to dismissal without cause or sem justa causa (which in practice was sometimes initiated by workers). Workers may be pressured under the new law to sign mutual-accord agreements, in which case—they may be unaware—they lose access to unemployment insurance; they receive only half of the paid advance notice period as those dismissed without

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cause; only 20 percent of the employer fine goes to the worker’s severance account instead of 40 percent; and they can only withdraw 80 percent of the balance accumulated across that and any previous jobs at that juncture rather than the full 100 percent. Government data showed that 109,508 workers had their contracts rescinded by mutual agreement in the first 10 months of the reform, with commercial and retail vendors and janitors—both found in supermarkets among other sectors—constituting two among the top six affected occupations.11 Working-time flexibility continued in practice in the form of the hours bank (banco de horas ), with terms still negotiated in CBAs, as revealed by our examination of contracts in the three case study unions in São Paulo state followed throughout the book. The provision in the revised labor law allowing firms to agree individually with workers on hours bank arrangements, leaving out any role for unions, was not reflected in contractual provisions covering the latter period of Walmart’s ownership (or under Advent ownership) under the 2017 reforms. Also, the offsetting of hours worked above or below the standard workday (compensação de jornada or offsetting-hours agreements) without need for payment of overtime was made easier and more flexible for employers in the 2017 labor reform; it could now occur through tacit or written individual accord (as opposed to written collective or individual agreement only) as long as it happens within a month, and the penalty for not doing so on the basis of agreement is the normal overtime rate of time and a half rather than double-time. No express provision is made for this, however, in the CBAs in the three cities negotiated since the July 2017 passage or November enactment of the 2017 labor reform. In terms of other formal-legal national reforms in principle affecting work-time flexibility in the 2017 law, no longer do “habitual overtime hours” invalidate offsetting-hours agreements. Here there are interesting variations across CBAs suggesting that union strategies and preferences correlating with their political orientations and national affiliations matter. The 2018–2019 CBA negotiated by the center-left Osasco union (SECOR) remained silent on offsetting-hours agreements, while the contract of the centrist “business-oriented” São Paulo union (2018/2019) does stipulate the mechanism of individual agreement (by unspecified means) and compensation without overtime rates for greater or less than standard hours worked within 120 days (rather than compensation within a month as per agreements under the new law)—thus giving employers more working-time flexibility. The center-right Bauru union’s

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2018/2019 contract reflected the prior law and took a more restrictive stance, allowing for only opt-in of firms, via notification of the worker union and employers’ union, to a special regime of hours offsetting; this opt-in also required individual written agreement as well as disallowed habitual overtime (the practice of which would nullify the employer’s right to ask for hours offsets, per the contract, contrary to the 2017 law but consistent with pre-2017 law). Violations of provisions and recordkeeping by employers were made punishable by one-time fines of R$350 paid to workers by the contract’s close. Contractual flexibility was strengthened legislatively in a pro-employer direction with the 2017 labor code reform, with the expansion of forms of atypical work such as “intermittent” work (zero hours or on-call contracts are the most common international term; O’Sullivan et al. 2019). Previous to the reform, part-time contracts could not exceed 25 weekly hours (the Brazilian workweek is 44 hours), vacation time was available proportional to time worked and could not be monetized by the employee (money paid instead of time off), and no overtime was allowed. The new law created a 30-hour part-time contract without overtime as well as a 26-hour contract allowing up to six overtime hours weekly (offset the following week by the employer or, if not, paid the following month). It also set vacation time for part-timers at 30 days off per 12 months worked and allowed part-time workers to take up to one-third of entitled vacation days instead of as a bonus. In addition, under the separate 2017 outsourcing law, outsourcing was deregulated by removing restrictions on externalizing a company’s “core activities” (“atividades-fim”)—an area in which a large collective suit was successfully filed by labor prosecutors against Walmart prior to the law, as discussed in Chapter 4 and below. Nationwide and across sectors, intermittent contracts began modestly with 50,000 instances in 2018 and shot up to 85,716 in 2019, corresponding to 13.3 percent of all net new formal-sector jobs created. Meanwhile, part-time contracts actually fell from 21,400 in 2018 to 20,360 in 2019. Together, these various forms of atypical contracts made up a worrisome 16.5 percent of all net new formal-sector jobs in 2019, though in the latter year they still only made up 0.29 percent of the total stock of jobs.12 A study by the interunion research and statistics agency DIEESE (Departamento Intersindical de Estatística e Estudos Sócio-Econômicos ) showed that, in December 2018, 43 percent of work performed under intermittent contracts had pay that fell below the minimum wage (which

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is set monthly); average monthly wages over the course of 2018 for intermittent workers were R$763, or US$208.83 based on average exchange rates over the year (compared to a minimum monthly wage of R$937 that year, or US$257).13 Commerce accounted for 28.4 percent of all intermittent contracts, and among the ten most common occupations affected were several very common in supermarkets and hypermarkets, such as stockers (repositores de mercadorias ) in second place; store attendants (atendente de lojas e mercados ) including, among others, clerks in meat departments or baked good sections in fourth place; cashiers (operadores de caixa) in eighth place; as well as others (janitors and security guards) that are frequently found in large groceries albeit the latter as agency or subcontracted workers. Among part-timers, stockers (first place), cashiers (second), janitors (third), and store attendants (eighth) all figured prominently in the top ten occupational categories in 2019. In Chapter 4, it was noted that Walmart increased its use of parttimers and other atypical workers from 2013 to 2014 by 57.8 percent as well as taking on over 2700 apprentices in the latter year; this occurred amidst store closures and while full-time employment held steady. While this brief glimpse into company hiring practices was not preceded or followed by data in annual Walmart Brazil reports for other years (reports which ceased in 2016), some insight is gained on negotiations affecting Walmart, as atypical contracts became an issue in collective bargaining as well as in legal claims. At the Osasco union on the São Paulo metro area’s industrial periphery, clauses were included in the 2019–2020 CBA expressly stating that all non-full-time contracts, “including those with an intermittent work schedule,” must be proportional to the wage per hour of the function for which the worker was hired in terms of the contractual wage floors (in essence, the wages applicable to new full-time hires). The CBA also explicitly allows—subject to a firm’s application to the employers’ union and with assent from the union—for the following: part-time contracts of up to 26 hours weekly or up to 30 hours weekly; reduced-time contracts (jornada reduzida) for workers of between 30 and 44 hours per week; and “12 × 36 contracts” (jornada especial 12 × 36 entailing 12 hours continuous, with 36 hours off subsequently). While these are the various specific versions of part-time contracts laid out in the 2017 law, the Osasco CBA specifies that all will have hourly pay proportional to that of full-time workers for their function and, per the terms of the law, will have the right to paid vacations after one year of employment. A limit of 50 percent of the workforce employed on nonstandard

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workweek contracts was set, suggesting growing use of such contracts and union efforts to head off further dualization into full- and non-fulltime workforces and proliferation of short-hour schedules with poverty wages—the latter being a widespread problem facing retail workers and their unions across the globe and particularly in Walmart stores from the United States to South Africa (Carré and Tilly 2017; Kenny 2018). (Similar, if less elaborate provisions covering the wages of reduced-time workers were incorporated into the 2017–2018 CBA signed in September 2017, before the national labor law changes had become effective.) By way of reference, leaving aside trainees and apprentices, atypical workers constituted 3.6 percent of Walmart workers in 2013 and 5.5 percent in 2014. It seems likely that atypical work must have increased significantly over the 2015–2016 recession—if not at Walmart or only there, at least at competitors covered by the CBA—for the union to feel it necessary to cap nonstandard work at so high a level as 50 percent. Turning to the centrist union of commercial workers of the city of São Paulo, SEC-SP, of the center-right bloc affiliated with the UGT and the CNTC, similar provisions exist in its 2019–2020 CBA regarding proportional pay and vacation eligibility for all of the non-full-time categories, except that there is no mention of intermittent contracts. A provision from the 2018 to 2019 CBA that intermittent contracts could only be implemented via agreement between the individual company and the union and that the employer’s organization had to be part of such negotiations disappeared from the 2019 to 2020 accord. The Bauru 2018–2019 CBA establishes that “special workweek contracts” (part-time contracts or 12 × 36 contracts with no mention on intermittent work) may only be established by firms that apply for temporary authorization with the employers’ union and submit paperwork from the labor ministry or a labor court to the joint labor–management conciliation commission to demonstrate they are in legal compliance; where such special contracts are authorized there is a limit of 50 percent of the workforce that may be hired in this fashion. CBAs in all three unions also allowed for the so-called “Spanish workweek” (jornada espanhola) involving alternation of 48-hour and 40-hour weeks, averaging out to the legal limit of 44 hours, and obviating overtime premium pay if hours are kept within those bounds. There must be union agreement to use this system for any, some, or all workers via CBA or firm-level accords. This was the sanctioned form to be taken by the

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hours bank under previous law, but no longer was mentioned expressly in the 2017 labor reform. As suggested by the GIC framework and underlined by the Brazilian pattern of complex, contested implementation of new laws establishing or taking away rights seen throughout this study, nonstandard work was still a legally contested space in collective bargaining as well as legal claims-making realm, in particular for the highly exploitative intermittent contracts. Here workers are literally at the beck and call of employers to work as little or as often (if at all), and as many hours on each occasion, as the employer deems necessary, with zero predictability. An illustration of such contestation is provided by the interior São Paulo city of Itu, part of the metro Sorocoba area, where the commercial workers’ union won a legal case in August 2019 against three employers, one of them Walmart, for hiring workers under the intermittent scheme without establishing the terms for such hires by agreement with the union.14 In effect, the local labor judge ruled, provisions of national law needed to be translated into CBAs before employers could take advantage of them. Regarding horizontal (internal) flexibility, meaning freedom of employers to move workers across tasks and have minimal or no constraints from job classification systems and job descriptions, constraints varied somewhat across unions and CBAs but generally Walmart enjoyed medium to high levels of flexibility. There are fewer restrictions in São Paulo than in Osasco or Bauru per the CBA. Both the Osasco and São Paulo contracts of 2017/2018 and 2018/2019 spell out the base wages, hours, and other conditions of work of commission-based sales personnel. Yet while Osasco and Bauru’s CBAs continue to set entry-level wage levels for particular occupations (“commercial workers in general,” cashiers, office boys, food servers, janitors), the São Paulo contracts from these years make no mention of particular job classifications; also now absent is the former elaborate description of the job of bagger (empacotador)—with prohibitions on being asked to perform other tasks—that had been present in the 2016/2017 CBA in São Paulo. In principle then, the lateral mobility of workers or multitasking is more constrained at least in economic terms, in Osasco for the firm by the absence of the “broad-banding” system in São Paulo stores—in the latter, workers are interchangeable in payment terms, with wage differences based almost exclusively on length of service. The greater convergence between the contracts of a center-left union (CONTRACs-affiliated Osasco) and one that falls within the center-right bloc (Bauru, historically affiliated with

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the UGT and represented in PLR negotiations by the CNTC) points to the less than determinative influence of political-strategic orientation in terms of the job control aspects of CBAs. The principal aspect of flexibility in remuneration at Walmart—or variability in compensation based on performance or other indicators at the individual, workgroup, store, or other levels—continued to be results sharing during the 2014–2018 period, as discussed above. Other forms that have been common in Brazilian industry such as attendance bonuses are not mentioned in the CBAs reviewed, either in the present or in the previous period, though such criteria may factor into PLR bonuses. Discussions of benefits in available Walmart Brazil reports paint them as standardized (at least for all manual wage earners below the supervisor level) rather than contingent. Of course, great flexibility in wage norms was afforded by part-time contracts, which already existed but whose forms expanded considerably with the 2017 reform, as well as the new intermittent contracts giving greater latitude in wage-setting—subject to the terms discussed above in the respective CBAs. Here the disjuncture between the country’s minimum wage norms, which are set in monthly terms and assume full-time work (eight hours a day, five and a half days, and 44 hours a week) and are adjusted annually, and the expanding atypical forms creates a breach favorable for employers. The 2017 labor reform reiterated former jurisprudence that held that part-time work needs only be proportionate on a per-hour basis to the wages per hour of those fulltimers with the same job functions. This minimally protective principle was enshrined in the language of the CBAs regarding atypical contracts with reference to proportionality with the wage floor, the latter typically applicable to new hires. All in all, Walmart enjoyed relatively high and even increasing levels of work flexibility in its latter years in Brazil, as well as the initial period of Advent ownership discussed in Chapter 7. A slack labor market, high levels of unemployment, and growing informality, together with legal reforms introduced in 2017, enhanced the power of supermarket employers vis-à-vis less skilled and formally educated workers seeking to gain or keep formal-sector work. Working-time and contractual flexibility in particular were enhanced for employers in legal terms, at workers’ expense, in at least three fundamental senses: (1) making it much more unlikely that a worker asked to labor beyond the standard workday or workweek would receive overtime premium pay; (2) making it easier to take on non-full-time workers for shorter periods and with shorter and

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(within bounds) variable workdays and workdays adjustable by the firm; and (3) making it easier for employers to impose on workers—seeking to keep their jobs in a high-turnover activity with low human-capital investments by employers—schedule and work-time shifts at the margins that individual workers could assent to in written or even tacit forms without breaking legal or contractual norms. In a modest but notable way, our case studies suggest that unions— particularly in Osasco and Bauru, somewhat less so in São Paulo—did what they could in collective bargaining within a difficult environment. While they were on the defensive in terms of maintaining the purchasing power of wages, they strove to maintain what contractual protections and union voice in assenting to deviations from the standard workweek existed already in CBAs. They also enshrined some clarity regarding the terms and process for introducing atypical contracts and for offsetting hours that deviated from the normal schedule for full-timers. This contractual clarity, as an alternative to simply relying upon the law to “impose” significant changes or settling of disputes ex post through legal claims, seems also to have been sought by employers and employer unions, at the very least in the transitional period captured by the CBAs in question. Motives on the part of supermarket companies like Walmart may have varied from unclear perceptions of how these changes would work and what their cost–benefit ratios would be; uncertainty about how labor courts would interpret them (as borne out by the Itu union’s successful legal challenge to intermittent work encompassing one Walmart store); and the likelihood of significant labor–management conflicts, or least individual or collective challenges through labor courts, if large scale, sudden changes were implemented strictly unilaterally. This is particularly true of the zero-hours “intermittent” contracts, notable by their absence from the São Paulo and Bauru CBAs and mentioned only in passing (as something that would have to be negotiated first) in the more recent Osasco contract. In the medium to long term in supermarkets and more generally in Brazil, however, the existence of these “mini-jobs” opened up new avenues to a sort of hyperflexibility that employers could seek to make wide use of, further tilting an already highly uneven playing field against workers and their collective representatives. Viewed through the GIC lens and looking beyond the period covered in this study, continued and further challenges to the implementation of the new legal tools in principle granted to employers by the 2017 laws can be expected, both at Walmart/BIG as well as other companies throughout the supermarket segment.

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Union Survival Strategies An institutional dimension further impacting on the labor–management playing field, also related to the 2017 labor reform, has to do with union financing. Overall, a dire drop in union revenues occurred nationwide, associated with an exacerbation in the decline of national unionization rates that was already underway since 2012 as well as a drop in the frequency of collective bargaining as some unions stopped negotiating contracts. The figures are dramatic. Over 2012–2019, unionization as measured by the imperfect tool of national household survey and on the basis of the total urban and rural labor force including those without “signed work cards” (carteira assinada) fell from 16.1 percent in 2012 to 12.5 percent in 2018 and then 11.2 percent in 2019. Over this period four million union members were lost in Brazil.15 However, in the broad category of commerce, rates held steady over 2012–2017 (10.5 percent in 2012, 10.4 percent in 2016, and 10.0 percent in 2017), only to plummet with the labor reform’s passage—and accumulated weight of two years of recession—to 8.1 percent in 2017 and further to 7.5 percent in the following year.16 Nationwide and across sectors, 28 percent fewer CBAs were negotiated over January to September 2018 than in the same period of 2017.17 For the first eight months in effect under the new law, uncertainty prevailed, until June 29, 2018, regarding the constitutionality of the abolition of the compulsory union tax contribution. There were 19 different legal challenges that were finally settled in favor of constitutionality by a 6–3 vote of Brazil’s supreme court, the Supremo Tribunal Federal (STF) in June 2018.18 The ruling did not prevent checkoff of dues or other fees payable to unions by workers as long as they gave assent, which many unions interpreted as the fees simply needing to be approved by union assembly, a public meeting which is open by law to all workers represented in contract negotiations under Brazil’s closed shop “sole union” system (unicidade sindical ) and not only to union members. The contribuição sindical or “union contribution” was more commonly known as the “union tax” (imposto sindical ), and it represented some 60 percent of the revenue of worker and employer unions prior to the reform.19 However, renewed uncertainty was created in January 2019 by a temporary decree (Medida Provisória 873/19) under Bolsonaro that established that payment of worker fees or dues to unions could only be made through an individual bank slip (boleto bancário). By May, six

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different challenges to the decree’s constitutionality had been filed with the STF by unions and the bar association, but without the high court ruling the measure automatically expired in June, because it was never voted on by Congress as would be necessary to turn it permanently into a law. In several states including São Paulo and Rio de Janeiro as well as the Federal District, labor courts had ruled during the period of the decree’s validity that union assemblies were sufficient to approve withholding of fees to unions and the individual bank slip method was not necessary. The immediate hit on unions when the law first went into effect was vast, resulting in an 86 percent cut in the amount collected and passed on to (worker and employer) unions by the federal government in the first three quarters of 2018, compared to the same period in 2017 when it was still in effect. Much of the criticism of the tax’s abolition was centered on its lack of a phaseout period or any institutional facilitation of the shift to a voluntary system—considerable transaction costs as well as free-rider problems are presented as unions set out to find a viable, cost-effective way to charge workers who benefit from union services that are indivisible goods such as collective bargaining and firm-specific agreements or providing legal assistance or representation in labor-court cases. The move was clearly meant to punish and weaken unions, undermine collective bargaining, and signal to investors that Brazil was “open for business.” One must also recall that unions are multi-firm, sectoral, territorially defined entities that exist “outside the workplace” in Brazil in a headquarters that is some distance from places of work and typically without permission to enter the workplace unless specifically requested. Union leaders’ limited means of interacting with workers is through visits to factory gates or the parking lots of stores and assemblies held during shift changes, electronic media (e-mail, websites, social media), and pamphlets and newsletters physically distributed outside stores and in other places of worker socialization outside the workplace. The immediate effect overall nationally, noted above, was also to inhibit collective bargaining, as both labor and employer unions lost their capacity (as well as for some less representative and more spurious organizations their narrow organizational incentive) to engage in annual wage bargaining. In addition, there were many cuts to union staffing and previously free services (legal representation, medical and dental visits), smaller union field offices within larger municipalities were closed, and union mergers or sharing of buildings and office space by unions were undertaken.

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Faced with this situation as well as continued uncertainty about how much worse their funding could become and what means of collecting support from workers were viable and would pass legal muster, commercial workers’ unions including those representing Walmart workers deployed a variety of organizational survival strategies—cuts to staff and services and sale or sharing of physical assets with other unions, mergers, legal challenges, and, above all, codifying payroll withholding through employers in CBAs. In March 2018—during the initial period of constitutional challenges to the end of obligatory contributions—the Ararás commercial workers’ union (interior of São Paulo) obtained an injunction from the regional labor court (TRT) that Walmart must collect and pass on the union tax.20 While this was quickly obviated by the STF’s ruling two months later, it reveals how quickly Walmart moved to take advantage of the new law to cease dues checkoff, consistent with its core anti-unionism. It was one among at least 30 immediately successful legal challenges by unions in various sectors and localities before the issue was settled (at least to a degree) by the high court. An example of organizational moves in response to declining revenues from our case studies is the June 2019 merger between the Osasco union and a union representing workers at motor vehicle dealerships called SINECOVEL.21 The latter was absorbed into SECOR, which took over bargaining representation as well as provision of or access through agreements to occupational medicine doctors, legal assistance, recreational activities, and other services. Another example is the proposal in the same month by the CONTRACS to share space in the building it owns with other CUT entities in order to “reduce our costs.”22 As far as worker contributions to compensate for some of the lost statutory union tax, the most tangible moves were the incorporation into the CBAs of an amount by way of “service contribution” (contribuição assistencial ). This contribution is determined through union assembly, and assessed on all workers covered by the union (dues-paying members or not) and paid through employer withholding. This traditional fee category from CBAs referred to social services provided by the union, provision of which tended to be favored by center-right unions and was the object of criticism by CUT unions (exemplified here by the SECOR union in Osasco) as promoting a “service orientation” or assistencialismo that undermined the defense of worker rights as unions’ core mission. In light of the crisis created by the end of mandatory withholding and

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plummeting revenues, the service contribution seems to have been repurposed as a sort of omnibus negotiating fee, and relatedly been raised in CBAs negotiated after the labor law reform was announced: in São Paulo, it went from a one-time monthly deduction of four percent of wages in 2016/2017 to one percent monthly capped at R$50 (20 percent of which would be shared with state federation Fecomerciários); in Osasco, it went from nonexistent in 2017/2018 to three percent for one month (capped at R$130) and 1.5 percent monthly for an additional month (capped at R$30 monthly) in 2018/2019 and 2019/2020. In Bauru, the service fee was set at 1.5 percent monthly as a share of workers’ wages, remaining the same across the 2016/2017 and 2018/2019 CBAs. In all cases, and in a nod to the voluntary nature of worker contributions under the labor law, it was underlined that these amounts had been determined in union assembly and that there was an individual worker opt-out procedure whereby the worker could inform the union and in some cases the employer in writing during a specified period. In other words, in a shifting and uncertain legal environment, unions moved toward a system of funding with greater voluntary characteristics than was true before the 2017 law, with the consent and cooperation of employers’ unions and their members via CBAs. These were moves which defied the Bolsonaro government’s effort in 2019 to move to an individual opt-in through a cumbersome bank slip procedure, and these unions moved the onus of opt out to workers rather than creating a barrier to workers opting in, as the government sought. These fees are not union dues but rather fees that cover negotiations and other expenses for goods and services available to all workers. It seems likely that surviving unions are headed toward somewhat of a two-tier system whereby workers who are not dues-paying members (paying an additional fee directly to the union to be members) receive fewer and/or less subsidized or free services from unions than dues-paying members. Yet all are represented at the bargaining table by the union. An important additional dimension of the CBAs studied is that, after the 2017 national reform, they also in these instances institutionalized and specified firm contributions to their own “employers’ union” (sindicato de empregadores ) representing them in these negotiations. This was not true of CBAs prior to the 2017 reform in the three municipal cases examined. In this way, through collective bargaining, both sides sought to resolve or at least lower the financing problems they faced, and that had contributed to the drop-off in the number of CBAs being reached

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nationwide noted earlier. Thus, incumbent organizations of the country’s historic corporatist system of collective representation of workers and employers—which had been successively modified in a series of enabling and constraining reforms since the 1980s detailed in Chapters 3 and 4 as well as their own reorganizing efforts—have stumbled or groped toward a more voluntary system of less generous but real funding. An open question is whether these moves will make them viable in the medium to long term as well as preserve their negotiating roles. At the macro level, losses in union funding continued in the second full year of the 2017 reform’s implementation, in 2019. Over the first 11 months of 2019, the Ministry of the Economy reported that union receipts fell by two-thirds compared to the same period of 2018.23 Many unions are likely to follow the course of the Commercial Workers of Porto Alegre, Brazil’s twelfth largest city, in closing entirely services like medical and dental care, moving to sell off their headquarters, and cutting staff and eliminating staff benefits, like day care.24 These developments may be salutary in terms of pushing unions away from a social welfare role that undermines their combativeness. Yet an unintended consequence of these reactions to the union tax’s rollback and to the parlous state of government health care may be to crowd the agenda of collective bargaining and employer negotiations with social benefits issues that have not played a central role heretofore, particularly for commercial workers. Moreover, the durability of collective bargaining is in question if unions are permanently undermined as viable representative entities for workers.

Serial Offender: Legal Claims Against Walmart Individual and collective legal actions against Walmart continued unabated in its last years of ownership in Brazil, and claims continued to be adjudicated under Advent ownership. Indeed, employment claims played an explicit and central role in the company’s declining performance in Brazil and several charges against international profits taken by Walmart as a company. To pick up on the discussion of legal claims that left off with 2014 in Chapter 4, it must be recalled that Brazil has a three-level labor-court system of local, regional (Regional Labor Courts or TRTs in Portuguese), and a federal superior labor court (TST in Portuguese). These courts try both individual claims against employers—typically after they have been dismissed and related to the terms of dismissal or underpayment of wages or entitled severance payments25 —with some sort of

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union legal assistance as well as collective claims (or “civil public actions”). The latter are a sort of class-action suit brought by the system of career regional labor prosecutors from the Public Labor Ministry (Ministério Público do Trabalho); any damages awarded are payable to philanthropic or public social services entities designated by prosecutors rather than to individual workers. Unions can also bring claims affecting groups of workers or violations of the terms of negotiated legally binding agreements with individual companies or employer unions. There can be out of court settlements, or extra-judicial accords (termos de ajustamento de conduta or TACs in Portuguese), under which employers agree to change illegal behaviors and are subject to monitoring by some combination of labor prosecutors and labor inspectors. The latter undertake investigations of labor law compliance that are either routine or, since they are increasingly short-staffed, most often complaint-based, and can issue fines, with any employer appeals against these fines adjudicated through the labor-court system. One of the reforms in the flexible, pro-employer 2017 labor law revision, effective November 2017, was to make it harder for individuals to file claims against employers by making workers bear all court costs (e.g., related to witnesses and legal representation) if they lose and incentivizing out of court settlements through conciliation mechanisms; the latter mechanisms tend to reduce the amounts received by workers who have valid claims. Previously workers would have court costs covered— whether winning or losing their cases—by simply certifying inability to pay, but now they must provide documentation of economic hardship. Overall, the first full year of the reform, in 2018, showed a 34 percent drop in the number of legal claims filed nationwide, with a slight further increase in 2019 of four percent. In the view of the nation’s highest labor magistrate (TST president) a sort of stabilization occurred by 2019, whereby the reform has been “assimilated” by the labor-court system and a permanently lower level of claims of around 30 percent less than prereform was being adjudicated. She noted further—and of relevance to the data presented below—that this had not yet been felt at the TST per se. The high labor court only tends to hear cases years after they have been submitted to the lower courts and appealed by the losing party to the regional courts (Consultor Jurídico 2020). This aspect of the 2017 labor reform was defended by President Temer and his conservative congressional allies by arguing, without proof, that

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Brazil had the highest number of labor suits in the world or even more than the rest of the world combined.26 While this was hyperbole, it is true, as noted in Chapter 4 and within the context of expanding institutions of labor justice, that the annual number of court cases filed increased substantially over 2005–2013; there is evidence that this continued early in the currently discussed period, with new claims reaching 3.9 million in 2016, for instance. (Unfortunately, data are not broken down by economic activity or sector.) The reform was clearly crafted by conservative legislators and their business allies in a way that tried to lower costs and legal liability for firms and restrict the access to court of workers and their advocates. As such, it achieved some of its aims in this initial period captured by the current study, at least at an overall national level. Set against this broader backdrop, Table 6.3 presents a selection of the major collective labor claims against Walmart over 2015–2018 where judgments (or agreements) were definitive or, to the best of our knowledge, not overturned subsequently even if subject to appeal. They were selected from news items about lawsuits, drawn from the mainstream press as well as judicial websites, or disseminated over three websites of commercial workers’ unions or confederations27 ; follow-up on cases identified there was conducted on specialized legal websites such as jusbrasil.com.br and, where the case number could be obtained, through the TST’s online system. Our search was also supplemented with keyword searches around “collective moral damage” (dano moral coletivo) and “harassment” (assédio) that was associated with Walmart. It must be recalled that in some cases, the initial labor prosecutor lawsuits or individual worker or union complaints or inspector fines preceded the judgments in question by a year or several years. Where available, the description has referred to these basic details to give a sense of chronology as well as of the agency (who took the actions) lying behind them, since this agency has multiple paths and configurations worth highlighting. Several points stand out, particularly as these cases are compared and contrasted with those presented for the period through 2014 in Table 4.3 in Chapter 4 (which included both individual and collective claims, an important difference). First, Walmart stands out as the most often sued among the three major supermarkets in Brazil. While data were lacking on this issue for the previous period, the TST began publishing information on the annual largest litigants and defendants periodically in the mid2010s out of concern over the growing backlog of cases in the three-tier

Collective moral damages for irregular hiring of temporary workers and illegal subcontracting of core activities without justification or definition of pay based on labor law, throughout the state of Rio Grande do Sul across all brands; First detected by labor inspectors and with lawsuit filed in 2014; Fine increased from initial R$100,000 that was issued by lower court; Workers to be regularized under CLT labor laws; Firm must publish public notices of compliance Collective moral damages related to work accidents and unsafe work environment: Stems from 2010 investigation of a work accident by labor prosecutors which discovered unsafe working environment for casual and subcontracted workers across the company’s five Nacional brand stores in the state; Firm must fulfill 8 conditions related to training, use of personal protective equipment and other measures; Each subsequent violation of any individual condition will generate a daily fine R1000 (US$261)

Regional (TRT), Porto Alegre, Rio Grande do Sul, March 18, 2015

Regional (TRT), Porto Alegre, Rio Grande do Sul, November 28, 2015

Nature of legal violation and scope

R$1million (US$261,165)

R$1million (US$310,655)

Value at date of latest/definitive judgment in Reais and US dollars at time of ruling or accord

Major rulings against Walmart on collective labor lawsuits in Brazil, 2015–2018

Latest or definitive labor court or venue and date

Table 6.3

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Collective moral damages resulting from excessive working hours (up to 13 hours on Saturdays) and not respecting the required rest period between workdays at one Sam’s Club in city of Natal; Settlement based on two lawsuits (ACP) filed by labor prosecutors for 5000 violations of a 2009 corrective action accord rest day); R$5000 (US$1600) to be assessed for each future violation found Violation of labor laws and of a 2010 extra-judicial accord covering violations of working hours, rest breaks , and ergonomic health and safety standards; Scope is three different Southern states Collective moral damages resulting from sexual harassment (stemming initially from 22 individual complaints from female workers), across 8 different cities and various company brands; No further appeal possible; Additional fines of R$5000 per worker for any future violations found Walmart

REGIONAL (TRT), Natal, Rio Grande do Norte, June 15, 2016

Regional (TRT), North, Rio Grande do Sul State, August 18, 2018

Corrective action agreement with labor prosecutors (MPT), Porto Alegre, Rio Grande do Sul, December 13, 2016

Nature of legal violation and scope

Latest or definitive labor court or venue and date

R$1million (US$256,470)

R$610,0000 (US$172,525)

R$1.25million (US$344,828)

(continued)

Value at date of latest/definitive judgment in Reais and US dollars at time of ruling or accord

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Injunction granted to labor prosecutors to enforce the terms of its lawsuit (ACP) requiring firms throughout the state of Alagoas to cease “psychological harassment, illicit summary sanctions and offense to the honor of workers ” and promote compliance with laws on “length of workday and workweek, overtime, breaks, weekly paid day off, use of hours bank” and end “anti-union conduct ” as well as unsafe working conditions and conditions leading to occupational illnesses; Injunction granted while final judgment being considered, with prosecutors seeking R$125 million in damages (US$3.3million); Three specific stores across three Walmart brands were investigated and cited

Regional (TRT), Maceió, Alagoas, November 12, 2018

US$1,345,648.00

N.A.

Value at date of latest/definitive judgment in Reais and US dollars at time of ruling or accord

Sources Union websites and keyword searches for “Walmart,” “dano moral,” and “assédio moral ” for identification. For follow-up: “Consulta Processual” https://www.jusbrasil.com.br/consulta-processual/?ref=navbar; “Pesquisa Processual,” Tribunal Superior do Trabalho, http://www.tst.jus.br/processosdo-tst; and various news websites. The company was majority-owned by Advent from August 2018 but only became Grupo BIG in August 2019

Total of examples

Nature of legal violation and scope

(continued)

Latest or definitive labor court or venue and date

Table 6.3

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labor justice system, albeit not consistently or with the same data breakouts each year. At the end of 2015, third-ranked supermarket (by sales and employees) Walmart had 242 pending labor claims with the TST , compared to then second-ranked Carrefour with 187 cases pending and market leader CBD/GPA (Companhia Brasileira de Distribuição/Grupo Pão de Açucar) with 177 (TST 2015). A rough guide to the time it was taking for cases to reach the TST on appeal (where they in fact did so) was as follows for 2017: Cases took two years, nine months, and 22 days to be judged in lower courts (varas ); seven months and two days in regional courts (TRTs); and one year, seven months, and two days in the TST (2018). These figures mean on average it took around 41 months, or three years and five months, for a case to reach the TST, if 2017 data are taken as a rough proxy for 2015. Thus, the labor and employment cases pending in 2015 were most likely first opened in 2012 or before when the company was expanding its sales and workforce. Even by the first seven months of 2020—recalling that Walmart ceased to be the owner of record in July 2018 although Advent kept the Walmart name for the new company through August 2019—Walmart still had 183 percent more pending cases against it at the TST (with 440) than did considerably larger and now supermarket leader Carrefour (240 cases against).28 While a disproportionate penchant for violating the law and being taken to court (as was shown at various points with Walmart Mexico and Chile in Chapter 5) is clearly demonstrated by these figures from various years, an additional factor possibly weighing in the 2020 data may be Walmart’s reluctance to settle cases or accept lower court judgments; apparently, the firm hoped to either win on appeal at the TST or at the least have fines reduced in nominal and/or real terms. Second, clearly Walmart continued to face and lose in court (and occasionally settle prior to appeal to the highest court) many large, costly lawsuits regarding working conditions in terms of scope as well as amounts, as well as individual claims. These five cases alone cost the firm US$1.35 million (the other was an injunction with a proposed damage award equivalent to US$3.2 million at the time that had not been further adjudicated as of August 2020 as best we could determine). They represent a small fraction of the claims Walmart paid over this time frame. Their scope was broad, varying from several stores in a single state, to all the stores in a state, to those in several neighboring states. As noted in Chapters 3 and 4, the territorial and tiered structure of the labor-court system and regional remit of labor prosecutors shapes such decentralized

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filings and adjudication, and makes nationwide claims difficult to bring. However, large claims were most present in the Northeast and South and not (at least in this illustrative selection) in the Southeast and Center-West where the company had been present for up to a decade longer; in the Northeast and South, stores and any legacy employees and supervisors from earlier owners were brought into the Walmart system of socialization and human resource management (HRM) more recently, which may have raised labor contestation through legal means. In addition, observers have noted persistent difficulties (discussed in the next section) the firm experienced in integrating and modernizing its systems of keeping wages and hours and other records across distinct regional operations. Third, thematically, while there was continuity from the period ending in 2014 in the appearance of legal claims of psychological harassment, even greater importance was taken on by working hours and break violations. Moreover, sexual harassment per se appeared for the first time as the subject of a lawsuit—though a preponderance of victims of the broader category of psychological harassment have also been women. (Since the proceedings on the sexual harassment suit were held in private to protect the anonymity of alleged victims, specific details of the nature of the harassment and on what employment conditions it had the most impact on were not made public.) Also, newly notable, compared to the cases in Table 4.3, were abuses in the use of subcontracting and temp work, reflecting company moves toward employment or contractual flexibility. In addition, patterns of health and safety violations (notable in the breadth of types of transgressions, in inspector fines issued over 2008–2016, per Table 4.4 in Chapter 4) took on wider importance. Multifaceted complaints that combined a wide variety of categories of labor law and labor rights violations were more prominent. It must be underlined that collective lawsuits concern patterns of practice that persist over time and sometimes geographic space rather than isolated incidents or ones that are specific to individual workers. Another important observation flowing from Table 6.3 is the frequency with which Walmart violates the terms of earlier extrajudicial accords, requiring further action by prosecutors, and the way it avoids findings of guilt and immediate payment of damages by stretching out appeals. Two specific issues of wider importance are also illustrated by the large judgments and settlements involving legal violations by Walmart in Table 6.3. Regarding working hours and break violations, first, the lawsuit covering three southern states in which Walmart, having been found

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in violation of a 2010 extrajudicial accord, agreed in 2016 to control excessive working hours and abuse of breaks (among other measures) is insightful; it speaks to a management issue discussed in the next section and first noted in Chapter 4. The agreement requires the company to regularize its system of clocking in and clocking out workers and keeping track of time worked and wages owed (registro de ponto). Defects or manipulation in the company’s time-keeping including “broken timeclocks” were among the complaints raised by Walmart workers in social dialogue negotiations as well as protests in the early 2010s, as noted in Chapter 4. These problems, including continued reliance on a nondigitized system and the lack of integration of management IT (information technology) systems more generally across the historic operations and the expanded operations in the South and Northeast from the mid2000s, were raised by observers as a key and costly failure. Somewhat astoundingly, as late as 2016, the CEO of Walmart International was saying, according to Reuters, that “it was implementing a plan, including putting advanced time-keeping equipment in stores and getting workers to formally clock in, which should lower the risk of worker lawsuits.”29 However, the reporters’ quote of the CEO, who used a U.S. football analogy, also suggested a tone-deafness in seeing the problem as strictly one to be resolved by technology: “‘A lot of the stuff in Brazil is just the basic stuff: do people properly clock out for their lunch breaks, do you manage overtime correctly, do they have the right breaks between shifts? … It’s a lot of basic blocking and tackling.’”30 The second set of issues concerns “anti-union behavior” (conduta antisindical ) referred to in the November 2018 injunction in the state of Alagoas obtained by labor prosecutors based on a lawsuit filed in lower labor court—a larger issue stretching back to the company’s early years in Brazil (Chapter 3). While coming a few months after Advent took control, the injunction was based on several years of labor inspector reports, individual complaints, and previous labor-court cases and decisions with respect to the three stores. The specific practices that were to be combatted under this portion of the agreement were the imposition of disciplinary sanctions, and firings and threatened firings—in the judge’s ruling—used “‘as a form of retaliation for participation in associational or union activities.’”31 These do not seem like isolated examples. In her store- and union-level research over 2014–2018 in Osasco, the interior São Paulo city of Campinas, and Northeastern city of João Pessoa including 33 interviews, Lemos (2019, 23) found “anti-union practices”

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such as “boycotting [distribution] of the union newsletter, difficulties of store leaders in accessing stores, [and] undue pressures and unjustified dismissals of unionists.” In our review of CBAs, the existence in some of the clauses guaranteeing union leaders the ability to “schedule” visits to stores is notable in terms of not just the language of “guesthood” it conveys regarding workers’ legitimate legal representatives’ presence in the workplace. It also stands out by illustrating the severe limits supermarket companies such as Walmart may place on union leaders’ freedom of movement. Put into the context of the continuing theme across the two earlier chapters on Brazil as well as the comparative discussion of three other Latin American countries, these measures are notable for their persistence, and continuity with the company’s early years, even after it had been operating in Brazil for more than two decades. The metaphor of a fist cloaked in velvet, or one hand forming a fist while the other offers a handshake, comes to mind in capturing the company’s posture toward unions and union members and activists, and the particular form that its anti-unionism took in Brazil. For the company, there was no cognitive dissonance in harassment and intimidation at the workplace alongside diplomatic negotiations at the bargaining table with national HR officials, even as unionists tried mightily and with meager success to leverage the latter to influence the former. The cases summarized in Table 6.3, as well as other collective suits resulting in smaller judgments against Walmart and individual claims also uncovered by our research for the period beginning in 2015, may be usefully juxtaposed to Lemos’ (2018, 2018/2019, 2019) study of all 89 individual and collective claims that she was able to access through the cumbersome online court records system; all had been judged by the highest court (TST) through April 2016. Though it is not made clear how far back in time they stretch and whether only cases that Walmart lost are included, Lemos presents an insightful classificatory overview. As it encompasses those cases that reached the highest court and covers a longer stretch of time—albeit one ending roughly two and a half years earlier—compared to our illustrative summary of major cases, her study spans the periods covered by our Table 4.3 in Chapter 4 and part of the period covered in this chapter, and addresses the subset of cases that traveled the longest possible legal route. None of the cases covered by Table 6.3 had reached the TST, and some seemed to find definitive resolution in an accord or decision not

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subject to appeal. By definition, TST cases are claims that have been in the court system for an average of 2.5 years or more, whereas the cases in Table 6.3 are more contemporary with respect to the dates of judgment or resolution as well as the practices and violations in question. Juxtaposing the two sets of cases is thus useful given differences in time frame and level of the court system, providing a more complete picture of legal contestation surrounding Walmart in what proved to be its last years in Brazil. Twenty-three, or about a quarter (25.8 percent), of claims in Lemos’ study concerned more than one substantive area of working conditions and labor law. The largest share of the claims in Lemos’ TST study (25 or 28.0 percent) were for “moral damages related to obligatory participation of workers in chants and dancing from the ‘motivational technique’ of the company known as ‘cheers’” (p. 4). Our non-exhaustive search in September 2020 reveals continued judgments against Walmart on individual claims over 2015 to as recently as August 2020 regarding moral damages. (The firm still existed in that name as a legal entity through August 2019.) There is no record during those years of plaintiffs losing such cases, though in some cases penalties were reduced on appeal. The continued stream of cases (five that we identified over 2017–2020) reflects not just the slowness of the appeals cases (in the instance of the three TST rulings as the highest court) but also decisions against Walmart coming at the lower court level—namely, in March 2020 in Brasília lower court and also touching on intimate bodily search and surveillance cameras in employee locker rooms, and at the regional court level in June 2017 in the states of Pará and Amapá in cases concerning holiday and overtime pay. The time frame of the claims detailed in our research casts some doubt about whether the scaling back of the cheering ritual which Lemos (2019, 139–141) reports based on 2014–2018 interviews at three stores was in fact broadly characteristic throughout the Walmart national network. On the contrary, there is evidence that the humiliating, degrading practice of cheers continued through the end of Walmart’s full ownership in mid2018 on some significant scale. Eight cases (8.9 percent) in Lemos’s study were related to just cause firings of workers related to their unwillingness to participate at all or enthusiastically in cheers. Whatever abuses and resistance it generated, as detailed in Chapter 4, the Walmart cheer thus continued to generate successful and costly legal challenges even as it was a core, nonnegotiable part of the company’s worker socialization

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and HRM (and what we have characterized as a repressive familial workplace authority regime)—as well as a strikingly common element across the company’s national operations with deep roots in practices begun in the home-office operations, as shown in earlier chapters. As in the previous period, cases took the form of individual claims and judgments because plaintiffs could prove participation was obligatory (with reprisals on the job or public humiliation of those not taking part enthusiastically) and was something not intrinsic to their work, which they experienced as personally humiliating and degrading. The firm continued to insist the practice was voluntary, but with little success swaying judges, who cited earlier rulings on the issue against the company made by their colleagues. The second biggest source of claims (17 claims, or 19.0 percent) in Lemos’ study was psychological harassment (assédio moral ) related to intimate, intrusive bodily searches or searches of personal effects and belongings. This finding also resonates with the claims discussed in Chapter 4. There is thus evidence that, not uncommon among supermarkets, Walmart frequently continued to treat workers with disrespect and mistrust—belying its discourse and symbolism of “family”—with an eye ostensibly toward preventing or detecting employee theft. Effective oversight and policing of the behavior of security guards, an outsourced activity, as workers entered and exited the stores for their shifts were apparently lacking as well. Other frequent sources of claims, in Lemos’ study, were moral damages related to denying bathroom breaks, public humiliation of workers who did not fulfill targets, offensive language by supervisors such as abusive nicknames and cursing, and unproven accusations of pocketing money from cash registers (a total of eight cases, or 8.9 percent). These cases along with forced participation in cheers and firings of recalcitrant workers underline the repressive element of the hierarchical “family” that Walmart sought to construct and enforce, as per our analysis in earlier chapters. Moral and material damages related to work accidents were the cause of four (4.5 percent) of claims (p. 4). The company’s Política de Orientação para Melhoria (literally Policy of Guidance for Improvement, or POM in Portuguese), instituted in 2006, was the subject of eight of the court cases documented by Lemos. All of them concern just cause dismissals and their relationship to the POM, while six of the eight also include moral damages (danos morais ) related to the application of the POM’s staged punishment rules against employees considered to be underperforming or nonconforming. While presented

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as a program that would guide the search for what might be called “continuous improvement” of performance, in fact the POM functioned as a sort of “three strikes and you’re out” (our term) series of phases of reprimanding and punishing “problem workers” (again, our term); workers were given two chances to alter their behavior before being fired with cause, a legal category with much lower firm dismissal costs and negative impacts on the employee’s severance pay and eligibility for unemployment insurance. Yet along the way they were already punished by being singled out publicly as well as denied access to any promotions that became available while effectively on probation. Legal problems arose from the lack of consistency with labor law standards for just cause dismissal as well as seemingly arbitrary application of the company’s own written criteria. Moreover, the POM, as Lemos (2019) notes from her store-level research, was used even short of dismissal as a mechanism to punish workers who fell out of favor with supervisors, often through manufactured rules violations, and thus deny them access to promotions and gain further power over them. Formally speaking, the company was forced in 2016, by a TST decision and an accord reached with labor prosecutors in response to a lawsuit, to abandon using the policy for new hires after 2013, while continuing to be bound by it for those hired before. The latter element was important because in some cases inconsistencies in application of the company’s own criteria and process meant that dismissed workers were ordered to be reinstated by courts. However, in practice Lemos reports from three stores that the policy seemed to continue through at least 2018. A large TST case was still proceeding as of September 2020,32 under rules of confidentiality regarding pending individual claims under a sampling procedure called “recurso repetitivo,” by which the court chooses a few illustrative cases to reach a decision about a host of nearly identical claims against a defendant. Meanwhile, as discussed in Chapter 7, in December 2019 a TST judge mediated an agreement (later signed in February 2020) between the CNTC moderate-conservative bloc of former Walmart, now BIG unionists and the company regarding not just PLR but also addressing limits on the applicability of the POM based on the motives for dismissal.33 Regarding labor inspections, we are hampered by a lack of breakdowns of inspections or fines by economic sector at the national or subnational levels. However, the information on the nature of inspection fines against Walmart versus its competitors in Table 4.4 does span the

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2008–2016 period. The data show that various categories of health and safety violations at Walmart stores as well as infractions regarding work of minors (most likely working hours), record-keeping of hours worked, and mandated breaks within the workday or between shifts all were identified at Walmart. A worrisome background trend, stemming from a failure to appropriate budgets for new hires and other expenses, was the decline nationwide in the number of inspectors from a steady level of 3024 to 3172 over 2007–2012 to 2694 in 2015 and 2327 in 2018.34 Brazil even at its peak was below the International Labour Organization’s recommended ratio for industrializing countries of one inspector per 15,000 workers (ILO 2006), standing at a worrisome 1:44,000 in mid-2018. Other evidence comes from an enforcement campaign in the retail sector and banking, joining inspectors with prosecutors over 2011–2015 in the southern state of Paraná and thus spanning the periods covered here and in Chapter 4, and first noted in that earlier chapter. In the campaign, inspectors issued R$6.8 million (US$1.72 million at December 31, 2015 exchange rates) in fines—most regarding working hours violations—in inspections covering firms employing nine percent of the state’s formal-sector workforce. Walmart was the fourth largest violator, with 4.0 percent of all infractions, and the second largest among supermarkets, surpassed only by the regional Supermercado Condor (with 8.0 percent) and ahead of GPA (with 2.8 percent).35 In April 2014, Walmart paid R$4 million (about US$1.8 million) under an extrajudicial accord to enforce future compliance with labor prosecutors, after inspections cited Walmart for more than 5000 infractions at 17 stores, as noted in Chapter 4. The very low value of the fines issued by inspectors in this statewide multi-firm, multi-sector enforcement campaign (amounts of which are set by law per violation category with little to no discretion—often as little as R$2 per violation) resulted in 88 percent of all fines being paid without legal appeal. This situation made inspectors prioritize their cooperation with the labor prosecutor’s office, which could issue or threaten lawsuits covering patterns of violations and use them as leverage to obtain corrective action (enforcement) accords like the one with Walmart. Several observations flow from this account of legal claims-making. First, the firm did not fundamentally alter harmful and abusive practices— intensification of work, often harsh discipline frequently experienced as arbitrary, intrusive socialization including peer pressure, humiliating and intrusive bodily searches, lack of full regard for worker health and safety. These practices continued to generate both “pattern of practice”

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collective claims pursued by labor inspectors as well as individual labor complaints, particularly by dismissed workers (the few who are willing to take on the process as they no longer fear losing their jobs). Second, the inertia of evolutionary change in Brazilian institutions, strengthened and built up in the previous period, and agency nested within them directed at contesting unlawful employment practices like those at Walmart are an integral part of the story. This institutionally nested agency was exercised by a complex set of actors with implicit and sometimes explicit patterns of cooperation: individual workers pursuing complaints; local unions and regional and national labor organizations engaging in collective bargaining as well as firm-level negotiations over results sharing, or filing complaints with prosecutors or simply providing legal assistance to individuals or accompanying labor inspectors on site visits; labor prosecutors investigating tips and formal complaints, reading labor inspectors’ reports, and court cases from individual claims to identify larger systematic issues, firms, and industries to be targeted in lawsuits (civil public actions, or ACPs); and labor inspectors conducting routine or complaintbased inspections, or in some cases more targeted inspections in problem firms and sectors. Third, without disaggregated breakdowns making it possible to gauge impacts more precisely, the legal changes introduced by the 2017 labor reform seemed at most to dampen a bit legal struggles to limit Walmart’s workplace abuses and shifting of costs of competitive restructuring to its workers. They did not prevent these challenges from continuing. In part this is because the changes were legally questioned in their constitutionality and slow or ambiguous in interpretation even where not legally contested. In part it is difficult to gauge the impact in so short a period, and medium- to long-term impacts are likely to be felt as the Advent/Grupo BIG era unfolds. In part, also, even if weakened by the economic conjuncture and by the shift in the correlation of political forces with a conservative congress and then rightist, anti-labor governments, the professionalism and autonomy of the career prosecutors, career laborcourt judges, and career labor inspectors persisted; institutional legacies and institutionally inscribed agency led them to fiercely defend their roles—through individual actions as well as their own collective voice and sometimes activism as well as conceptions of social justice embodied in legal norms (for activist prosecutors and inspectors) or the norm of neutrality and a level playing field for labor and capital where they saw the law as heading pre-2017 reform (for labor-court judges).

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Of all the actors contesting and engaging Walmart it is probably the unions who faced the most dire obstacles, with the immediate withdrawal of their major historic source of revenue—a move long sought by progressive unionists to combat bureaucratization and build a more organic connection to their rank and file, but never in such draconian form. Yet even they maneuvered to try to secure alternate forms of voluntary funding through dues checkoff from employers under a different guise. They also took advantage of the fact that employers’ sindicatos faced their own funding crunch with the end of the union contribution, and could build into collective bargaining agreements parallel obligations for firms to pay them for the negotiating and other services they provide. With their already weak structural power adversely impacted by a sagging economy with high unemployment, company restructuring, and the apparent increase in atypical contracts at stores, unions cultivated the organizational resources at their disposal—through collective bargaining, results sharing negotiations, and support for individual and collective legal claims-making. A fourth observation concerns the impact of contestation of Walmart on company strategy and competitive decline, and links this section to the next and concluding chapter. On the one hand, the set of challenges faced by Walmart in the labor arena were insufficiently powerful to alter fundamentally its precarious labor conditions (endemic to the sector but taking an extreme form that led to greater legal contestation against the U.S. firm than competitors) or its repressive familial workplace regime and anti-unionism. On the other hand, legal actions produced damages paid to individuals and to the state and reprimands in strong language in court decisions reported by the Brazilian press; the company treated them as “costs of doing business” and generally seemed unconcerned with reputational risks like these. Low prices for consumers remained its main self-declared mission, though the strength of its environmental rhetoric and initiatives continued to grow, per its annual reports.36 Walmart Brazil tasked its legal department with handling these claims much as the headquarters does, and the fines, damages, findings of violations, and condemnations from the bench and in the press do not seem to have led to any rethink of how workers were hired, treated, promoted, demoted, and dismissed. At some level, the rationality of maintaining the Walmart cheer or the POM seems on its face questionable from a bottom-line perspective— which makes all the more essential that the issue be situated, by way of

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explanation for the continuity of controversial and costly practices, within the context of core aspects of Walmart’s born in Bentonville LR/HRM framework—aspects that it was unable or unwilling to adapt, or jettison, in Brazil and elsewhere. There were unquestionably quite real and tangible costs for the company that were acknowledged publicly by the parent company in terms of profit write-downs and statements of concern in annual reports and investor meetings, as discussed below. These accumulating costs were an integral part of the company’s failing profitability and ultimate exit from majority control and ownership, an issue to which the next section turns.

Walmart’s Competitive Decline and Market Exit Leaner economic times in Brazil exposed the mounting competitive failures of Walmart in that national market. Yet signs of those failures predated Brazil’s economic slowdown and recession, even if the full picture was obscured by the nature of Walmart’s accounting, which did not disaggregate profits or losses for Walmart Brazil but instead lumped it in with all its overseas subsidiaries in Walmart International, one of the company’s three “segments.” In 2010 and 2011, the head of Walmart International (latter to become CEO) expressed disappointment with the subsidiary’s performance.37 As early as November 2012, Walmart International wrote down its third quarter results for its fiscal year by US$69 million, specifically citing pending employment claims in Brazil, even though the subsidiary’s profits were growing at an annual rate of 12.5 percent minus these charges according to the CEO of Walmart International.38 Subsequently, in January and February 2014, flagging performance at the company’s Brazil operations led to formal charges (of 17 U.S. cents per share) against global company profits. In an earnings call to investors, the company tied these losses to store closings announced in October 2013 noted in Chapter 4 and above (closures also were announced simultaneously in China) as well as what it cited as “non-income tax contingencies” and “employment claim contingencies,” both exclusively in Brazil.39 The company hinted at deeper problems in that February communication to investors about its operations in the South American country: “We’re focused on stabilizing Brazil. This has been a challenging market for a number of reasons, and we’re working on many fronts to improve our competitive position here.” The report also noted that

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Walmart’s national market share losses were occurring in both Brazil and the U.K. (where Walmart was the majority owner and operator of ASDA), and that efforts were underway to “improve our operating model” in Brazil, Mexico, China, and India.40 These announcements highlight the fact that the company’s unfolding crisis in Brazil first evident from 2013, on through its sale to Advent in June 2018, must be set against the backdrop of the multinational’s lagging international performance in many key markets, as well as moves to restructure its operations in those overseas locations. Of particular importance to that restructuring was the global parent’s struggle to figure out how to position itself around the globe in mixing its brick and mortar operations and traditional strength in the supercenter/hypermarket segment with the growing importance of e-commerce to the food retail space as well as growing popularity in some markets of different sorts of store formats than the Supercenters (hypermarkets) that were Walmart’s cornerstone. By November 2015, with Brazil in formal recession, Walmart headquarters expressed a concern in an investor call that “high inflation and unemployment…. are impacting both our store and e-commerce sales.”41 In this report that also noted worries about “weaker sales performance” in the UK and China, the company noted that in Brazil its “‘[o]perating income declined faster than sales, due to increased labor claims, continued high utility costs, and higher markdown activity ….’” [emphasis added].42 Just a month before, in October, CEO and president of Walmart Doug McMillon (who had served as CEO of Walmart International from 2009 to 2014 before his promotion) had announced an active strategic review of all the company’s roughly 11,600 stores worldwide and plans to close units found unprofitable.43 This review resulted in the January 2016 announcement of 269 stores closing throughout the company—including 154 locations in the United States (mostly Walmart Express) but also the 60 stores in Brazil, as discussed above. For the company’s fiscal year 2016 (ending in January 2016), Walmart International noted in February 2016 in its annual report the financial hits it took: the “approximately $150 million charge for the announced closure of 115 underperforming stores in Brazil and other Latin American markets in January 2016, increased employment claim contingencies and higher utility rates in Brazil and investments in digital retail and information technology” (Walmart 2017, 25, emphasis added). At the time of the store closures and announcements about charges against profits, Reuters reported in February 2016 that “[p]eople familiar

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with the numbers told Reuters that Wal-Mart has posted operating losses in Brazil for each of the past seven years.” The CEO of Walmart International denied the company was leaving Brazil—noting new investment in integrating the legacy computer systems of units it had acquired over previous years as an example of its commitment to Brazil. The country’s most prominent business newspaper, Valor Econômico, had been reporting along similar lines that profits had fallen and Brazil had been put on, then taken off, then put back on an internal Walmart watch list of national subsidiaries whose future was in jeopardy.44 All of this occurred against the backdrop of Walmart International’s lagging performance as a whole compared to that of the Walmart U.S. and Sam’s Club segments, falling from a peak of 28.9 percent of worldwide net sales in fiscal years 2012 and 2013 to 25.7 percent in 2015 and 24.2 percent in 2016 (and later continuing to decline to 23.6 percent in 2019 and 23.1 percent in 2020).45 Over the Walmart fiscal year quarter from November 2017 to January 2018, Walmart Brazil wound down its first-party e-commerce operations (where it acted as retailer and branded goods manufacturers were the wholesalers from which it purchase stock to be re-sold). It focused its online marketplace instead only on third-party sales whereby the customer bought directly from the brand through the platform’s intermediation. The write-down was an unspecified part of a US$500 million charge against profits taken by Walmart for that last quarter of its 2018 fiscal year, which also included “decisions to exit certain international properties and wind down the first party Ecommerce operations in Brazil.” (Walmart 2018, 36, 41). In January 2018 it was reported that Walmart was trying to find a “partner” for its Brazil operations with the help of Goldman Sachs.46 The search initially focused on existing Brazilian as well as international supermarket rivals, but then with apparent lack of interest among prospective buyers shifted toward international private equity (PE) firms active in retail. Interested buyers reportedly balked at the size of the company’s tax and employment contingencies, demanding a better deal. In April 2018, in its annual report, the global parent tried to defect blame for its moves toward the exit door to the country’s regulatory environment, even as it braced investors for the impending hit to the bottom line once an exit was consummated:

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Brazilian federal, state and local laws are complex and subject to varying interpretations. Although the Company believes it complies with those laws, the Company’s subsidiaries in Brazil are party to a large number of labor claims and non-income tax assessments, which have arisen during the normal course of business in Brazil. These matters are subject to inherent uncertainties and if decided adversely to the Company, could materially adversely affect our financial performance. (Walmart 2018, 23; emphasis added)

In addition, in that same April 2018 report, the global parent made another mention of the ongoing “inquiries or investigations regarding allegations of potential FCPA [Foreign Corrupt Practices Act] violations …in a number of foreign markets in which we operate, including, but not limited to, Brazil, China and India” (Walmart 2018, 25). (Though unmentioned, Mexico, of course, figured most prominently in these investigations, as discussed in Chapter 5.) Noting that the company had informed the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) of these investigations, the company reported that its “discussions” with these regulators—who had the power to prosecute the firms—had “progressed to a point that we can now reasonably estimate a probable loss and have recorded an aggregate accrual of $283 million with respect to these matters” (Walmart 2018, 25). Once again, international problems and missteps were widespread, but Brazil figured in a central role. In what was the third in a series of major international moves over late April to early June 2018, Walmart announced on June 3, 2018 the sale of an 80 percent majority ownership stake of its Brazil subsidiary to Advent. Earlier, the company had acquired a majority stake in India’s e-commerce startup Flipkart at a price of US$16 billion and had agreed to sell its majority stake in its UK arm ASDA to local rival Sainsbury (a move that would be nixed in 2019 by the British competition authority). With the sale of the Brazil subsidiary, Walmart announced it would take an approximate US$4.5 billion charge against earnings for that quarter (which ended up being a US$4.5 billion “pre-tax net loss” for the 2019 fiscal year) (Walmart 2019, 10). Immediately Walmart’s stock price rose two percent. Essentially, Advent took over the loss-making operation without paying anything, with Walmart maintaining a 20 percent stake and with, according to a Walmart spokesperson at the time, an opportunity to receive up to US$250 million eventually, apparently a

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reference to the royalties of 0.7 percent of sales that Advent would pay on sales by Walmart—and Sam’s Club-branded stores (Reuters 2018). In an aspect of the private deal that underlined the central role of employment and tax liabilities, Walmart agreed to “indemnify Advent for certain pre-closing tax and legal contingencies and other matters” in an unspecified amount (Walmart 2019, 10)—in effect, paying Advent to take its Brazilian operations out of its hands and off its books. In a June 2019 coda to Walmart’s sale of a majority stake in its Brazil operations to Advent and the saga of Walmart Brazil, the company reached an agreement with the U.S. SEC and DOJ to pay a total of US$282 million in penalties for violating U.S. anti-bribery law in the acquisition of land, leases, and permits to open new stores in Brazil, China, India, and Mexico. This development was the culmination of a seven-year investigation and included an admission of guilt on behalf of its Brazil unit WMT Brasilia, the wholly owned subsidiary that owned all Walmart stores in Brazil. Of the total sum, $144 million went to settle the SEC’s charges that the company failed to exercise controls in the hiring of third-party intermediaries and approximately $138 million was paid to resolve parallel criminal charges by DOJ. Said the chief of the SEC’s Enforcement Division for the Foreign Corruption Practices Act in a press release: “Walmart valued international growth and costcutting over compliance. The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously and delayed the implementation of appropriate internal accounting controls.”47

Concluding Remarks In Brazil, several years of internal investigation intensifying in 2016 led to the screening and severing of ties with numerous consultants who had been hired at firm expense to help clear the way with officials through bribes paid to public officials.48 The focus of that investigation was the 2008–2013 time period, when Walmart had its largest spurt in new store construction. The specific criminal charges to which Walmart confessed guilt in Brazil related to the hiring of consultants by construction companies with which Walmart was working to build two stores in the national capital; these consultants paid bribes to public officials without the company’s direct knowledge.49 Walmart indirectly paid the consultants, ignored clear red flags about their modus operandi and track

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record and the U.S. legal requirements to vet such third-party intermediaries, and improperly reported the payments to the companies to hire the consultants as business expenses. The common thread that links Walmart’s corrupt practices with its other missteps in Brazil is problems overseas that are rooted in decisions, priorities, and practices originating from the home office in Bentonville. In the concluding chapter we take up the underlying question, why did Walmart fail in Brazil?

Notes 1. Private e-mail correspondence with authors Martin and Veiga, March 10, 2016. 2. World Bank, “GDP Growth (annual %)—Brazil,” https://data.worldbank. org/indicator/NY.GDP.MKTP.KD.ZG?locations=BR. Accessed August 23, 2020. 3. Brad Haynes and Nathan Layne, Reuters, “Insight: Lost in Translation— Wal-Mart Stumbles Hard in Brazil,” February 17, 2016, https://www. reuters.com/article/us-walmart-brazil-idUSKCN0VQ0EQ. Accessed September 8, 2020. 4. Data are from DIEESE (2019a, pp. 49–50) and DIEESE (2018a), and are based on authors’ calculations. 5. Sindicato de Empregados no Comércio em Maringá e Região, “CNTC Aprova com Walmart Programa de Participação nos Resultados para Comerciários,” July 7, 2017, http://sincomar.com.br/site/?cod=not icia/1150/cntc-aprova-com-walmart-programa-de-participacao-nos-result ados-para-comerciarios. Accessed September 8, 2020. 6. Sindicomerciários Viamão, “CNTC Assina Acordo Nacional com Walmart de PLR que Beneficiará Mais 65 mil Trabalhadores,” 2016, http://sin dicomerciariosviamao.com.br/sec/cntc-assina-acordo-nacional-comwalmart-de-plr-que-beneficiara-mais-65-mil-trabalhadores/. Accessed September 8, 2020. 7. CONTRACs, “PLR,” n.d., http://contracs.org.br/conteudo/37/plr. Accessed September 8, 2020. 8. Fecomerciários do Estado de São Paulo, “Fuentes Representa a Fecomerciários em Reunião sobre o Walmart em Johannesburgo,” November 4, 2016, https://portalfecomerciarios.org.br/noticia/18570/fuentes-rep resenta-a-fecomerciarios-em-reuniao-sobre-o-walmart-em-johannesburgo. Accessed September 8, 2020. 9. “Walmart Brasil Fecha 60 lojas e Anuncia Novo Presidente,” Folha de São Paulo, January 15, 2020, https://www1.folha.uol.com.br/mercado/ 2016/01/1729972-walmart-fecha-60-lojas-no-brasil-e-encerra-formato-

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express.shtml. Accessed September 8, 2020; and “Walmart se Compromete a Manter Funcionários de Lojas Fechadas,” Folha de São Paulo, December 30, 2015, https://www1.folha.uol.com.br/mercado/2015/ 12/1724471-walmart-se-compromete-a-manter-funcionarios-de-lojas-fec hadas.shtml. Accessed September 8, 2020. CBAs by city. Osasco: Sindicato dos Empregados no Comércio de Osasco e Região and Federação do Comércio do Estado de São Paulo, 2016/2017, signed October 11, 2016, http://www. secor.org.br/download/SINCOVAGA2016_102016.2017; 2017/2018; signed September 27, 2017, http://www.secor.org.br/wp-content/ uploads/2017/09/SINCOVAGA.pdf; 2018/2019; signed October 4, 2018, https://cdn.comerciarios.org.br/convencao/sincovaga/SINCOV AGA-2018-2019-2.pdf?d=040920191448. All accessed September 9, 2020. São Paulo: Sindicato dos Comerciários de São Paulo and Sindicato do Comércio de Gêneros Alimenticios de São Paulo, 2016/2017, signed November 7, 2016, https://cdn.comerciarios.org.br/convencao/sincov aga/SINCOVAGA-2016-2017-4.pdf?d=040920191448; 2017/2018, signed August 31, 2017, https://cdn.comerciarios.org.br/conven cao/sincovaga/SINCOVAGA-2017-2018.pdf?d=040920191448; and 2018/2019, signed October 4, 2018, https://cdn.comerciarios.org. br/convencao/sincovaga/SINCOVAGA-2018-2019-2.pdf?d=040920 191448, all accessed September 9, 2020. Bauru: Sindicato do Comércio Varejista de Bauru e Região and Sindicato dos Empregados no Comércio de Bauru, Convencão Coletiva de Trabalho, 2016/2017, signed January 20, 2017, http://www. secbau.com.br/files/cct20162017VAREJ.pdf; and 2018/2019, signed July 19, 2019, http://www.secbau.com.br/files/CCT%202018-2019. pdf, both accessed September 9, 2020. Central Única dos Trabalhadores, “Mais de 109 Mil Trabalhadores Fizeram Acordo de Demissão e Perderam Direitos,” October 3, 2019. Accessed September 10, 2020 (citing data from CAGED data base gathered by DIESSE). G1, “16,5% das Vagas Criadas no País em 2019 Foram Intermitentes ou de Tempo Parcial,” January 24, 2020, Accessed Sepember 9, 2020. DIEESE “Contratos Intermitentes na Gaveta,” Boletim Emprego em Pauta, 14 (January 2020), https://www.dieese.org.br/boletimempregoe mpauta/2020/boletimEmpregoEmPauta14.pdf. Accessed September 15, 2020. Fecomerciários, “Sindicato de Itu Garante Direitos de Comerciários contra Trabalho Intermitente,” August 2, 2019, https://portalfecomerci arios.org.br/noticia/28019/sindicato-de-itu-garante-direitos-de-comerc iarios-contra-trabalho-intermitente. Accessed September 10, 2020.

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15. IBGE, “PNAD Contínua: Características Adicionais do Mercado do Trabalho 2019,” 2020, p. 1, https://biblioteca.ibge.gov.br/visualizacao/ livros/liv101743_informativo.pdf. Accessed September 10, 2020. 16. IBGE, “PNAD,” p. 3. 17. O Globo, “Receita de Sindicatos Cai 86%, Resultando em Corte de Custos e Serviços,” November 4, 2018, https://oglobo.globo.com/ economia/receita-de-sindicatos-cai-86-resultando-em-corte-de-custos-ser vicos-23209792. Accessed September 10, 2020. 18. Supremo Tribunal Federal, “STF Declara Constitucionalidade do Fim da Contribuição Sindical Obrigatório,” June 29, 2018. 19. Lucas Borges Teixeira, “Perde Validade MP que Previa Contribuição Sindical só por Boleto; e Agora?,” June 28, 2019, https://economia.uol. com.br/noticias/redacao/2019/06/28/mp-contribuicao-sindical-porboleto.htm?cmpid=copiaecola. Accessed September 10, 2020. 20. Confederacão Nacional dos Trabalhadores no Comércio (CNTC), “WALMART É Obrigado a Recolher Contribuição Sindical,” March 21, 2018, http://www.simec.com.br/?area=ver_noticia&id=5417&titulo=wal mart-e-obrigado-a-recolher-contribuicao-sindical. Accessed September 10, 2020. 21. SECOR, “Assambléia para Unificaao do SECOR e SINECOVEL Acontece no Próximo Domingo, 30/6,” June 25, 2019, http://www.secor. org.br/assembleia-para-unificacao-do-secor-e-sinecovel-acontece-no-pro ximo-domingo-30-6/. Accessed June 10, 2020. 22. SECOR, “Condomínio Sindical Cutista: Compartilhando Espaços, Idéias e Lutas,” n.d., http://contracs.org.br/sistema/ck/files/Condominio.pdf. Accessed September 10, 2020. 23. Luma Escritório Contábil, “A Arrecadação dos Sindicatos – Patronais e de Empregados – Despencou no Brasil em 2019,” January 29, 2020, http://www.escritorioluma.com.br/a-arrecadacao-dos-sindicatos-patron ais-e-de-empregados-despencou-no-brasil-em-2019/. Accessed September 10, 2020. 24. “Arrecadação de Sindicatos Cai Após Reforma,” Jornal do Comércio, May 12, 2019. 25. In one study, in 2016, prior to the reform, 61 percent of legal claims were related to dismissals and another 19 percent to payment of wages and indemnizations related to dismissal (employers pay a fine that goes into the worker’s severance account when fired without just cause or “sem justa causa,” meaning unrelated to the employee’s behavior or performance, such as due to the economic situation of the firm). The study is cited in Maria Gamas Cubas, Carta Capital, “Após reforma, número de novos processos trabalhistas caiu pela metade,” May 1, 2018, https://www.cartacapital.com.br/politica/Apos-reforma-numero-

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de-novos-processos-trabalhistas-caiu-pela-metade/. Accessed September 2, 2020. Richardo Machesan, UOL, “Brasil é Campeão de Ações Trabalhistas no Mundo? Dados São Inconclusivos,” June 27, 2017, https://noticias. uol.com.br/confere/ultimas-noticias/2017/06/27/brasil-e-campeao-deacoes-trabalhistas-no-mundo-dados-sao-inconclusivos.htm?cmpid=copiae cola. Accessed September 10, 2020. SECOR (Osasco commercial workers’ union): http://www.secor.org. br/post/noticias/; CONTRACS (CUT-affiliated commercial and service workers’ confederation), http://contracs.org.br/noticias; and CNTC national commercial workers confederation, http://www.cntc.org.br/imp rensa-e-publicidade/noticias/. Tribunal Superior do Trabalho, Justiça do Trabalho, “Ranking das Partes no TST-Resíduo,” July 30, 2020. Accessed September 5, 2020. B. Haynes and N. Layne, Reuters, “Insight,” February 17, 2016. B. Haynes and N. Layne, Reuters, “Insight,” February 17, 2016. Globo, “MPT/AL Obtém Liminar que Obriga Walmart a Coibir Excessos contra Trabalhadores,” November 12, 2018, https://gazetaweb. globo.com/portal/noticia/2018/11/_64439.php. Accessed September 4, 2020. Tribunal Superior do Trabalho, Processo: IRR—872– 26.2012.5.04.0012—Fase Atual: IRR (Recurso Repetitivo—Tramitação Eletrônica), http://aplicacao4.tst.jus.br/consultaProcessual/consultaT stNumUnica.do?consulta=Consultar&conscsjt=&numeroTst=872&digito Tst=26&anoTst=2012&orgaoTst=5&tribunalTst=04&varaTst=0012&sub mit=Consultar. Accessed September 3, 2020. Consultor Jurídico, “Walmart e Entidades Sindicais Discutem Proposta de Acordo Coletivo,” December 12, 2019, https://www.conjur.com. br/2019-dez-12/walmart-entidades-sindicais-discutem-proposta-acordocoletivo. Accessed September 3, 2020; and CNTC, “Grupo Walmart e Entidades Sindicais Assinam Acordo Coletivo Negociado no TST,” February 6, 2020, https://www.cntc.org.br/?noticias=grupo-walmarte-entidades-sindicais-assinam-acordo-coletivo-negociado-no-tst. Accessed September 3, 2020. Data are from the Ministry of Labor on its former site mte.gov.br (before being reorganized as the Secretariat of Labor under the Ministry of the Economy in January 2019) as well as the inspectors union SINAIT, https://www.sinait.org.br/. Accessed September 10, 2020. “Jornada de Trabalho Excessivo Pode Render Multa Até 10 Vezes Maior às Empresas,” Folha de São Paulo, December 7, 2015, https://www1. folha.uol.com.br/mercado/2015/12/1715897-no-parana-jornada-excess

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iva-pode-render-multa-ate-10-vezes-maior.shtml. Accessed September 11, 2020. Walmart Brazil, Relatório de Sustentabilidade, annual reports, issued through 2016. Historic site: walmart.com.br. “Walmart Seeks Bigger Slice of Brazil,” Financial Times, August 4, 2011, https://www.ft.com/content/b1fac5b8-c654-11e0-bb50-001 44feabdc0. Accessed September 8, 2020. Adriana Mattos, “Ações Trabalhistas no Brasil Prejudicam Balanço do Walmart,” Valor Econômico, November 19, 2012, http://www.contracs. org.br/noticias/9415/acoes-trabalhistas-no-brasil-prejudicam-balancodo-walmart. Accessed September 4, 2020. WAL-MART STORES, INC. (NYSE: WMT), “Fourth Quarter Fiscal Year 2014 Earnings Call,” February 20, 2014, Management Call as recorded, https://s2.q4cdn.com/056532643/files/doc_financials/ 2013/q4/FY14Q4finalmanagementscript.pdf. Accessed August 25, 2020. There were also additional provisions for a sum total of 9 US cents related to a transaction in India, store lease expense charges in China, and staff restructuring and store closures at U.S. Sam’s Club operations. WAL-MART STORES, “Fourth Quarter,” February 20, 2014. WAL-MART STORES, INC. (NYSE: WMT), “Third Quarter Fiscal Year 2016 Earnings Call: Management Call as Recorded,” November 17, 2015, https://cdn.corporate.walmart.com/e9/6b/838d2b9a42a6 87cb8f410f2322b6/management-earnings-call-transcript.pdf. Accessed September 15, 2020. WAL-MART STORES, “Third Quarter,” November 17, 2015. Walmart, “Walmart Continues Sharpened Focus on Portfolio Management,” Bentonville, Arkansas, January 15, 2016, https://corporate.wal mart.com/newsroom/2016/01/15/walmart-continues-sharpened-focuson-portfolio-management. Accessed September 6, 2020. Adriana Mattos, “Walmart Vai Rever Atuação e Brasil Pode Ser Afetado,” Valor Econômico, December 11, 2015, https://valor.globo.com/emp resas/noticia/2015/12/11/walmart-vai-rever-atuacao-e-brasil-pode-serafetado.ghtml. Accessed September 18, 2015. The Walmart fiscal year runs from February 1 to January 30, so that for instance FY 2020 ended on January 30, 2020. Data source: Statista, https://www-statista-com.ezproxy.cul.columbia.edu/statistics/269403/ net-sales-of-walmart-worldwide-by-division/. Accessed September 20, 2020, citing company data. Author’s calculations. Adriana Mattos, “Walmart Busca Sócio no Brasil,” Valor Econômico, January 22, 2018, https://valor.globo.com/empresas/noticia/2018/ 01/22/walmart-busca-socio-no-brasil-1.ghtml. Accessed September 1, 2020.

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47. United States Securities and Exchange Commission, “Walmart Charged With FCPA Violations,” June 20, 2019, https://www.sec.gov/news/ press-release/2019-102. Accessed September 21, 2020. 48. Adriana Mattos, “Walmart Faz ‘Limpeza’ de sua Base de Terceiros,” Valor Econômico, June 7, 2016, https://valor.globo.com/empresas/not icia/2016/06/07/walmart-faz-limpeza-de-sua-base-de-terceiros.ghtml. Accessed September 21, 2020. 49. United States of America vs. WMT Brasilia S.a.r.l., defendant, District Court for the Eastern District of Virginia, Case 1:19-cr-00192-LO, filed June 20, 2019, https://www.justice.gov/opa/press-release/file/117 5771/download. Accessed September 21, 2020.

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CHAPTER 7

Conclusion: Failed Global Diffusion, Walmart’s Exit, and National Institutions

Abstract Walmart’s 2018 Brazil exit is explained as a case of failed diffusion of home-office practices by multinational corporations to distinctive national institutions and markets. Walmart’s labor-repressive model as well as distinctive supplier relations, pricing, and other business practices led to losses and stimulated labor claims-making. The very same model that served the company well in neoliberal market economies like its U.S. home proved problematic in a country with more of a role for the state, labor courts, employer organizations, and regulated competition. Broad parallels are drawn to non-market institutions of economic governance that likewise contributed to Walmart’s earlier exits from Germany and South Korea. Conclusions are drawn about the parochialism marring Walmart’s global expansion and the countervailing forces to normstransgressing, diffusion-minded multinationals present in certain national institutional contexts. Keywords Multinational corporations · Global diffusion · National adaptation · Labor relations/human resource management · Gradual institutional change · National economic governance institutions

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8_7

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Why did Walmart fail in Brazil? The question is compelling because of Walmart’s status as one of the world’s largest companies and employers, and also because of Brazil’s size and the length of time it lasted in that South American country. It also represents a puzzle given the research propositions in studies of failures of retail internationalization that “the longer a business has operated in a target market, …the lower the likelihood of failure” and “[a]s a firm enters more countries and gains experience, with more formats (or has many formats in the home market), so the likelihood of failure may be lessened” (Burt et al. 2003, 368, 369). Formulating an answer to the puzzle of Walmart’s failure entails stepping back to take a longer view and deeper analytical perspective on the interplay between global corporate strategy and host country institutions and actors, which has been at the center of this study. The previous chapter began to situate Walmart Brazil’s decline within longer-term organizational and competitive shortcomings in Brazil that were magnified but not created by the larger market downturn—a perspective further developed here. Chapter 6 also revealed the tight connections between continued efforts to instill “Walmart culture” and mounting legal costs related to collective and individual employment claims. Yet another key, it is shown in this chapter, was the problematic efforts to coordinate and then belatedly and unsuccessfully integrate human resources management (HRM) and other systems of the various regional operations acquired from international competitors’ Brazil operations in the country’s Northeast and South, taken over in 2004–2005. In the labor realm, long-term failures of national adaptation on the part of Walmart were masked, it is further argued, by a misleading picture of smoother labor-management relations on the shopfloor painted by national profit- and results-sharing (PLR) negotiations and real wage increases during the period through 2014, analyzed in Chapter 4. This picture belies continued abusive workplace conditions as well as antiunionism, as demonstrated in Chapters 4 and 6. The growing legal claims documented in the aforementioned chapters brought these festering problems to public light in the form of claims and lawsuits, and transformed them into tangible costs for not just the subsidiary but also for the parent company. The main body of this concluding chapter situates the widely noted proximate causes of the company’s competitive decline and Brazil exit, including costly employment claims, within the analytical perspective of challenges of localization and predominance of diffusion of home-country

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practices in Walmart’s model of international expansion. This brings the argument back to the framework introduced in Chapters 1 and 2 and developed throughout. In addition, the question of why Walmart lingered in Brazil in the face of unprofitability is addressed. Afterward, a brief overview is presented of the mix of cuts, new investments, shifts in strategy and even branding away from unsuccessful Walmart strategies that characterized the Advent/Grupo BIG’s initial efforts to restore profitability. Also noted are promising union-firm agreements with unions that seemed to take aim at addressing the painful legacy of the former owner’s employment relations practices. The last section recapitulates and draws broader conclusions from the study’s framework of studying global expansion of a multinational corporation (MNC) through the prism of (1) its national embeddedness in evolving national institutions and (2) institutionally nested agency that shapes and is shaped by this evolution as a contested space. Common features that Brazil shares with other countries where Walmart has failed and exited, or attempted exits, suggest the type of national markets and institutions where the company’s unique business model is a particularly poor fit, and where its capacity to make adaptations has proved equally unsuccessful.

Global Diffusion Meets National Institutions and Agents Company reports and accounts by business journalists and industry experts detail well the immediate reasons for profit write-downs and apparent outright losses over at least half a decade and the immediate factors leading toward Walmart’s competitive decline and ultimate exit from Brazil. Yet a deeper perspective emerges from the framework presented in this book and in which many of these factors can best be situated. This study has problematized the company’s entry and traverse through Brazil from the perspective of variations in how MNCs approach host countries and to what extent they tend toward diffusion of core practices or, alternatively, a selective or more systematic adaption to distinctive national institutions and markets. It has been shown in this study that Walmart has had a quite distinctive business model in its global expansion among supermarket MNCs, including in Brazil—a point that is quite consensual in the literature on Walmart. The “Walmart way,” as it was often self-characterized, has key, distinctive elements discussed in Chapter 2: a focus on everyday low prices rather than discounting; a

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vaunted logistical system that minimizes inventory and squeezes steady costs savings out of suppliers; and what we have characterized as a repressive familial workplace regime of authority relations and anti-unionism in labor relations/human resource management policy. The company has tried to remain true to these core defining concepts and practices as it has expanded to a score of countries on five continents. Ultimately, Walmart was the victim of the brittleness of its global model, and of failures—a mix of inability and unwillingness—to adapt core aspects of its model to Brazilian institutional and market realities; this model encountered resistance, raised costs, and seemed like an increasingly poor fit. That resistance and those costs were most apparent following the company’s expansion moves from the mid-2000s to early 2010s, though in many ways they were a constant across the company’s 23 years in Brazil. Moreover, insights can be gained from juxtaposing Walmart’s struggles to adapt to the Brazilian national markets and institutions with parallel and earlier struggles in some other host countries, particularly two major markets from which it exited in 2006, Germany and South Korea, discussed below. In others, such as Mexico and Chile discussed in Chapter 5, these aspects of the Walmart model seemed to fit better (even if generating significant labor contestation in the latter) and it has operationalized them more effectively and made better competitive choices. Crucially, in these and other countries of greater competitive success, the company has quickly achieved the leading position in the market—consistent with the market destabilization hypothesis discussed in Chapter 2. Market destabilization has forced competitors to react to it and try to compete on Walmart’s terms of low prices and low costs (for example, Durand 2007 on Mexico). An important contextual observation for any discussion of Walmart’s decline and exit from Brazil reveals that “country effects” of shifting economic conditions in a host country alone are not determinative of market success or failure and highlights, instead, the important role of the variable of subsidiary autonomy and flexibility within MNCs. Brazil’s economic slowdown was weathered successfully by its two locally larger (but internationally smaller) MNC competitors. Carrefour first entered the Brazilian market in 1975—two decades prior to Walmart—and Grupo Carrefour Brasil became a publicly traded company on the country’s Novo Mercado exchange in July 2017. Outside of France, Brazil is Carrefour’s biggest sales generator.1 Diversifying from hypermarkets into the lucrative cash and carry (ataracejo) segment (the latter discussed

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below), Carrefour went from a top-20 market share of 21.2 percent in 2015 (second place) to a 31.5 percent market-leading share in 2019.2 The larger holding company GPA (formerly Grupo Pão de Açucar), which owns CBD (Companhia Brasileira de Distribuição), was originally nationally- and family-owned back as far as the 1950s but took on a minority stake from France’s Groupe Casino in 1999. Later it operated as a 50/50 joint venture from 2005 to 2012, at which time Casino gained operational control and majority ownership that it has exercised since.3 Over that same period, while losing market leadership to Carrefour and top 20 market share (from 38.1 percent in 2015 to 31.2 percent in 2019) and posting losses in 2015 and 2016 as it restructured,4 GPA diversified store formats while continuing to build on its traditional strength in smaller stores. It returned to profitability in 2017–2019. In sum, while both Carrefour and GPA/CBD are subsidiaries of French-owned MNCs, clearly both are much more “Brazilianized” in their ownership and their capital structures, including with separate, detailed financial reports for their Brazilian operations. This feature can be seen as important and perhaps consequential in light of apparent home office directives coming from Bentonville headquarters via the Walmart International segment regarding a timeline for a turnaround of Walmart Brazil from 2015 and implementing store closures in 2013 and late 2015/early 2016; the latter took place based on a strategic review of profitability corporation-wide where the Brazil subsidiary was part of larger cost-cutting decisions within Walmart International. A sign of management turmoil at the top and home office-subsidiary tension is the relatively short tenure of CEO/Presidents at the helm of Walmart Brazil after 2008—about 2.6 years on average,5 contrasted to the 11 years served by President and CEO Vicente Trius from 1997 to 2008. The heads of the subsidiary seemed to be on an ever shorter leash with increasingly meager results from expansion and acquisitions. Of note, our research reveals that the last four CEOs of Walmart Brazil were Brazilian nationals who were educated in Brazil, unlike U.S. nationals who were U.S.- or U.S.- and Europe-trained in the company’s first 15 years in the country.6 The course of Walmart Brazil and its major expansion from the mid-2000s was thus set by expatriates sent by the home office or hired from existing expat managerial talent in Brazil; Brazilians (who had worked in upper management in the subsidiary and/or in Walmart operations elsewhere in the Latin American region) ended up being tasked with trying to make these bold strategic moves by non-Brazilian predecessors

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from the home office succeed. US-trained Walmart executives cast the die of Walmart Brazil’s ungainly, weakly consolidated expansion, a problematic trajectory from which it never escaped, and which never enabled it to assert the sought-after market leadership much less dominance it long sought in Brazil. The key performance metrics presented in Table 6.2 in Chapter 6 paint a numerical portrait of Walmart’s competitive decline in Brazil. The table shows the company’s nearly consistent annual declines in nominal local currency sales over 2014–2018; its steady losses in gross revenue in real, inflation-adjusted local currency terms over that same period; and its overall loss in market share (from 15.7 to 13.1 percent) among the country’s 20 leading supermarket chains over the same time frame. On two key measures sometimes used to gauge supermarket performance— sales per square foot (or meter) and per employee—significant gains were lacking despite major restructuring and contraction measures. Revenue per square foot (second column from the right) actually declined in inflation-adjusted Real terms over 2014–2016, and ticked upward slightly in 2017. Revenue per employee (farthest right column), measured in inflation-adjusted local currency terms, rose slightly in 2015 and 2017 but dropped significantly in 2016 and then 2018, with an overall five-year increase of only 8.9 percent. The latter improvement was far from what was needed to stem the tide of fairly well concealed red ink. Several common themes or trends are cited by local and international business reporters covering Walmart’s crisis in Brazil7 and can also be observed in light of issues highlighted by the firm itself in public statements, such as earning calls and annual reports or in statements to journalists (some of which are cited above or in Chapter 6). First, employment claims are consistently mentioned as a source of charges against global parent profits. Second, failures of integration of different legacy information-gathering systems are regularly mentioned, and some of them concern human resources and payroll record-keeping; these problems were contentious issues in labor relations and employment claims as noted in Chapter 4. As early as 2010, the outgoing CEO Héctor Nuñez (a U.S. national), in explaining in an interview why the company had in his words “excellent sales numbers but only reasonable profit numbers,” said the following about the company’s major acquisitions in the Northeast and Southeast in 2004–2005 that enabled it to leap into third-place market share in Brazil: “We delayed in integrating, and that left our structure increasingly complex.”8 There were repeated mentions by the company

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in subsequent years of a stop/start process of integrating operations of the Northeast and Southeast stores acquired from other MNCs into the IT system used by the subsidiary headquarters (originally in São Paulo and then partially moved to Porto Alegre in the South in 2010) and the larger system used by the home office. In a February 2016 earnings call with investors, Walmart noted as one of its priorities in Brazil “complet[ing] the integration of systems and processes in our stores.”9 In July 2016, it was finally announced that stores in the South (the company’s traditional focus) and the Southeast were, in a trade publication’s words, “now [with] 100% of units operating under a sole system and sole database, interconnected with global systems.”10 The news came fully ten and a half years after the American giant’s purchase of all the stores of Portuguese retail chain SONAE, located in Brazil’s South. This systems integration was apparently the final stage in a five-year process involving 40,000 workers and costing R$750 million (US$19.0 million), complicated by the diversity of tax regulations across the cities and states where it operated across the country (though Carrefour and CBD/GPA had even more far-flung Brazilian operations facing the same issues). Belated systems integration’s perceived strategic importance to implementing fully the Everyday Low Prices model was underlined by executives noting that it would enable “‘process improvements toward the rationalization of inventory in stores,’” “‘productivity gains in decision-making,’” and improvements in “‘supplier relations all the way to the optimization of logistics of points of sale.’”11 In retrospect, the process was completed extremely late, and as the company was already undergoing severe overall contraction in Brazil. A third widely noted competitive shortcoming is store formats and store locations and a general problem of market positioning—put simply, too down-market for the upper-middle class, and too expensive for the lower-middle and lower classes. The company had problems attracting a clientele to its smaller neighborhood markets (a format where it also had difficulties in the U.S.), a format where competitors had success. Walmart Brazil also did not expand aggressively into what ended up being the biggest growth segment in Brazil in supermarket retail in the 2010s— the so-called atacarejo or “cash and carry” format. In the latter, bulk wholesale purchases of general merchandise combine with a limited selection of food items; particularly with rising unemployment and falling real purchasing power from the mid-2010s, this market segment grew considerably. Both Carrefour and GPA/CBD began investing significantly in

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cash and carry from the 2000s. Walmart was still heavily focused on its traditional Supercenters (hypermarkets), a segment where demand peaked toward the early 2010s in Brazil due to travel distance between neighborhoods and stores and a customer preference for making smaller purchases more frequently to seek deals. Walmart Brazil only belatedly and weakly began to convert some of its wholesale stores under the Maxxi brand into cash and carry locations. As far as store locations, analysts noted that the company made some poor siting decisions in purchasing or renting land on urban peripheries (long Walmart’s preference given the size of its stores); the firm did not factor in shifting consumption patterns and transportation costs and difficulties facing those without vehicles. A fourth, related problem area was pricing. Walmart insisted on promoting and then sticking to its signature Everyday Low Prices (Preço Baixo Todo Dia) pricing model (EDLP in English). As discussed in previous chapters, EDLP eschews the high-low model of pricing with its constant discounts to attract shoppers that Brazilian consumers are accustomed to and which rivals practiced. EDLP relies on having the lowest prices on average, and that consumers will make large purchases where savings will average out without aggressive and costly sales promotions. As noted in Chapter 4, it was only in 2011 that the company announced that EDLP would be implemented in Brazil, after the policy was attempted but abandoned early in its operations in Brazil. In the 2010s it sought to expand the policy—successfully implemented in the United States, Canada, United Kingdom, and Mexico—to its international operations in China, Central America, Japan, and Central America.12 In a 2011 interview with the Wall Street Journal, Walmart International CEO Doug McMillon—who had risen in the ranks from a store worker in Arkansas and would go on to become CEO of the whole company from 2014— explained why EDLP is so central to Walmart’s strategy around the world: “The big bet is that the customers are smart, and I am willing to make that bet anywhere in the world, anytime. They pay attention to value and over time, as we deliver everyday low prices across the [shopping] basket, not just on milk and eggs and items that are highly visible to them, they have a sense of that.”13 Even after the implementation of the new pricing model, Brazilian shoppers’ reticence in making the behavior and culture shift toward EDLP was sometimes openly acknowledged by executives and widely noted by company critics in Brazil. In October 2014, the subsidiary CEO said Walmart would resist the temptation to begin discounting as signs of

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recession appeared.14 Beyond the consumer culture shift, EDLP requires tight logistics, flexible suppliers able to adjust output and deliver cost savings to the company, and a seamless flow of information connecting suppliers, distribution centers, and store—all elements that Walmart Brazil never seemed fully to achieve and that encountered business or regulatory roadblocks in various ways (Chapter 3). The system also assumes scale to be profitable as it requires low margins spread out over a high volume of goods. Ironically, McMillon even noted in August 2012 that Walmart Brazil had halted new store construction since 2011 precisely so it could invest in expanding EDLP—highlighting a sort of classic chicken and egg problem.15 The company’s costly inflexibility in sticking to EDLP in Brazil against all odds stands out as a clear failure to adapt corporate strategy to national market conditions and of context-blind global corporate diffusion. In Chapters 4 and 6, it has been demonstrated through the prism of legal claims and costs, that its labor relations/human resource management (LR/HRM) policy and repressive familialism made Walmart disproportionately likely to be taken to court and have to pay damages and fines. During at least its last half dozen or so years in Brazil, this took place in a way that tangibly harmed its bottom line. Here it is not just the frequency and volume of legal claims but also their specific content that connects them to how workers are treated in ways distinctive to Walmart—psychological harassment, sexual harassment, forcing workers to engage in humiliating socialization rituals, and imposing a punitive and even codified shaming and disciplinary system on workers considered to be unproductive or behaviorally unfit. To be sure, there were also more prosaic problems of mismanagement of processes of system integration that had negative implications that showed up in legal claims and in complaints and protests by unions in firm-level conflicts and negotiations. Even these problems could be attributed to the stubborn commitment to subsidiary incorporation into a single global IT system, a by-product of the homogenized treatment of national subsidiaries within Walmart’s management and accounting model. Yet, broken timeclocks and workers being asked to work unpaid hours off the books and without overtime pay seemed to also reflect deeper problems of the cost-cutting and performance incentives facing unit managers that led them to squeeze labor costs—pressures which became worse with economic downturn, and what seemed to be de facto country quotas of how many stores would be closed to fulfill global firm

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cost-cutting targets. These micro-incentives driving worker exploitation at the store level were often in conflict with the express desire of HR managers to incentivize productivity through results sharing and their stated commitment in periodic agreements to “fix” these ostensibly storelevel-only problems—that is, problems treated in such negotiations as ad hoc “relationship” matters rather than the systemic, structural issues that they were. At a deeper level, the discussion in previous chapters has shown that these problems and challenges for competitiveness were not unique to Walmart Brazil but rather arose also in the firm’s operations in some other host countries.

The Walmart Exit in Broader Comparative Perspective Connecting the ultimately failed Walmart Brazil experience with two other major country exits that unfolded more quickly—in 2006 from Germany and Korea—is instructive and demonstrates deeper recurring problems related to limits of home office diffusionism where national institutions and markets are a poor fit and successful adaptations are not undertaken. Walmart left Germany after nine years in 2006, with 85 stores and 11,000 employees and US$2 billion in annual sales, taking a US$1 billion charge against global profits on the sale.16 The same year, the company sold off its operations after eight years in South Korea, where it had 16 stores and around 3600 workers and had lost 9.9 billion won (US$9.9 million at end-2015 exchange rates17 ) in 2005 on revenue of 728.7 billion won (US$72.6 million).18 In both cases, analysts have noted lack of an “effective localization strategy” (Kim 2008) in some of the same areas where problems were manifest in Brazil—namely, efforts to follow the EDLP despite different local shopping habits and perceptions of value; problems with poor store locations and product mix considering local geography and preferences; and inability to create the same one-sided supplier network that led to cost savings and efficiency elsewhere (Aoyama and Schwarz 2006; Cristopherson 2006; Hunt et al. 2018). Cristopherson argues there was a “stand-off between the Wal-Mart concept and German economic policy,” in which Walmart’s particular lean retailing model butted heads with the country’s well-established institutions of skill formation, a highly competitive retail market with a strong discount focus, regulatory restrictions on predatory pricing, and

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bilateral employment relations and corporate governance institutions with a strong role for unions. In both countries, Walmart’s anti-unionism and repressive familialism were evident albeit in different ways, and generated contestation in nationally distinctive ways. In Korea the company maintained a non-union shop like in the United States and Canada through fierce union avoidance policies; however, organizing efforts back by the UNI Global Union of service and commercial workers were underway at the time of exit at Walmart Korea.19 It is not clear whether the company implemented the Walmart cheer, though founder Sam Walton’s exposure to group calisthenics and cheers at the start of the workday on a visit to Korea in the 1970s was his inspiration for introducing the practice in the U.S. (as noted on the Walmart website)20 ; this suggests in principle perhaps more receptivity to the cheer in Korean work culture than might be true of some other countries where the practice has been contested fiercely. In Germany, meanwhile, the non-union option was similarly legally off the table as in Brazil, yet the company showed no willingness or ability to adapt to Germany’s co-determination model or conflictual labor-management cooperation. The head of the union representing 5000 Walmart workers, Verdi, said at the time of the sell-off: “‘They didn’t understand that in Germany, companies and unions are closely connected. Bentonville didn’t want to have anything to do with unions. They thought we were communists’” (Landler and Barbaro 2006). The company also boycotted collective bargaining with other retailers until picketing of stores forced it to join the employers’ association and abide by the collective agreement in 2000, and it only met “sporadically” with the legally mandated worker-elected works council (Cristopherson 2006: 263–264); the latter is an institution with a strongly entrenched and legally enshrined role in Germany in negotiating health and safety and work rules with employers and typically working closely with unions. By the time of its departure, a legal challenge forced the company to withdraw in that country the code of ethics that it forced all workers to sign around the world. Meanwhile, connecting the customer service orientation of “smiling faces” with which employees are required to greet all approaching shoppers (reflected in the company’s famous logo) to challenges Walmart faced in appealing to consumers, the practice is reported to have turned off German customers; they found it strange, off-putting, and even flirtatious (Hunt et al. 2018). The cheer was resisted by German

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workers and reportedly dropped by the company. Structurally, whereas Walmart was used to taking advantage of having a large contingent workforce in the United States and other countries with labor markets giving employers high external flexibility, regulated and coordinated labor markets in Germany involving entrenched occupations (like butchers) and skill ladders and training (Cristopherson 2006) stood strongly at odds with Walmart’s core penchant toward reliance on precarious, low-skilled workers around the world. In the end, at Walmart Korea and Walmart Germany, albeit for different reasons, there was unresolvable friction with local practices and institutions, profits were not forthcoming, and the company headed for the exit relatively swiftly as losses piled up. The company did not retreat from overall global expansion, however, and instead re-directed it toward other international markets, including doubling down on its investment in Brazil and elsewhere in Latin America. Yet, despite statements at the time that global headquarters had learned a great deal about the need to be more flexible in its global expansion going forward (Landler and Barbaro 2006), Walmart’s contemporaneous and subsequent experience in Brazil belies this promise. A plausible related hypothesis raised persistently by business journalists doing off-the-record interviews at Walmart Brazil— and alluded to above—is that decision-making was home office-driven,21 and that Walmart Brazil managers had little autonomy. Logically, global diffusion might not necessarily require tight centralization if subsidiary managers are carefully chosen and socialized and trained in home-office methods, though there would seem to be a strong elective affinity between low subsidiary autonomy and strong diffusion. Faced with the constraint of the opaqueness of Walmart as object of study in terms of providing access to researchers, noted throughout this study, the plausibility is suggested empirically by the source of announcements about factory closures, major new investments, and any disclosures about pieces of financial performance like results for particular quarters or year-on-year based on quarters—always Bentonville-based management like Walmart parent spokespeople or the CEO of Walmart International, itself merely a “segment” rather than a separate financial division of the company. The short leash and very belated reliance on Brazilian nationals (duly experienced with the “Walmart way” in Brazil or elsewhere in their career trajectories) as CEOs of Walmart Brazil also dovetail with this interpretation.

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As was underlined in Chapter 5, the variation in national institutions and degrees and ways in which they enable or inhibit labor contestation is considerable in the dozens of countries across five continents where the company has operated—a point applicable beyond LR/HRM to pricing and competition, supplier relations, zoning and land management, and other functional areas. Nor is significant labor contestation alone, as in the Chile case, inimical to market success. In the latter country with its post1980s neoliberal market economy, it was not wrapped up with a larger tension with national consumer tastes and aspects of business institutions and markets, unlike the situation in Brazil. Furthermore, there is another instance contemporary to Walmart Brazil in which factors other than labor contestation, similarly related to disjuncture between core elements of the Walmart model and national markets and institutions, have undermined competitive success and led to an attempted or near-market exit—Japan.22 In that country, underperforming Seiyu, majority-Walmart-owned since 2008, and with a minority stake dating to 2002, was put up for sale in mid-2018 around the time of the Brazil unit sale. Yet a buyer and acceptable deal could not be found. At least an interim solution was found by Walmart by partnering in 2019 with an online subscription-based company and investing in online sales in Japan as well as closing some antiquated stores.23 While views are mixed on consumer reaction to EDLP at brick and mortar Japanese stores, problems navigating tight wholesaler-supplier-retailer interfirm networks in Japan’s business structure as well as failure to appreciate the importance of upgrading older existing stores built by the original local partner were cited among the difficulties compounding the country’s sluggish national growth in hurting Walmart’s profitability.24 All in all, it may be argued, there is a broader and deeper context to the problems that brought down Walmart Brazil. There is, we find, a clash or tension of core aspects of Walmart’s model that it has sought to replicate or emulate closely overseas with important, distinctive features of national institutions and markets where they are qualitatively different from those of the United States or other neoliberal market economies where Walmart has flourished (e.g., the United States, the United Kingdom, Canada, Chile, Mexico). We do not wish to belabor here a complex larger debate about national varieties of capitalism or economic governance. The point is that the role in coordinating national capitalist production of non-market institutions in some countries—that is, states and/or business

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and labor actors and institutions organized sectorally, and/or conglomerates and complex interfirm networks—is a broadly common feature that not only sets apart Brazil with its long arc of “hierarchical capitalism” (Schneider 2013) or more recent trajectory of “socio-developmental capitalism” (Bizberg 2019) from liberal market economies; the latter are exemplified by the United States and other countries where Walmart has found its competitive “sweet spot.” These features also distinguish other “problem countries” for Walmart (Germany, Korea, and Japan) that, in ways loosely similar to Brazil in analytical terms, diverge as national systems from liberal market economies such as the U.S. when viewed within the varieties of capitalism or comparative capitalisms theoretical traditions (Berger and Dore 1996; Hollingsworth and Boyer 1997; Hall and Soskice 2001; Nölke 2019). More systematic research to explore this intriguing hypothesis in a careful and broader empirical fashion should be part of the research agenda moving forward.

Why Did Walmart Linger so Long in Brazil? An important counterfactual question is posed by this discussion of Walmart’s competitive decline in Brazil—if it was unprofitable for so long, why did it not leave Brazil much sooner?25 A number of factors must be considered, but the common thread is the prism through which Brazil was viewed within Bentonville’s overarching global corporate strategy. The first factor is “sunk costs,” which were particularly high given the investments the firm made in Brazil from the mid-2000s with two major acquisitions that gave it a nationwide presence on through the early 2010s together with new store construction. Realizing the benefits and reaping the synergies of the nationwide footprint it had acquired was seen as a matter of better implementation of the “Walmart way,” minor course corrections, tactical adjustments—installing EDLP, integrating IT systems, adjusting formats and locations, and so on. Second, the company had made a sizeable bet on large “emerging markets” with a track record or promise of high growth; this included not just Brazil and China since the 1990s, but repeated efforts to enter India first as retailer (rebuffed by regulators) and then as wholesaler and ecommerce vendor (with 28 cash and carry stores, two fulfillment centers, and the Flipkart majority stake as of October 2020), and the 2011 entry into South Africa and subsequent expansion into other African countries. Many of the high hopes pinned in Bentonville on Walmart International

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in the first decade and a half of this century hinged on aspirations for successful performance and expansion in developing economies still experiencing the “supermarket revolution of the global South” discussed in Chapter 2, with big-box retailing poised (it was hoped) to supplant more traditional forms of commerce. Experiences in “mature” retail markets outside North America had been either failures (Germany, South Korea) or decidedly mixed (Japan, the United Kingdom). Around the mid-2010s, Walmart’s strategy began to shift in the face of the challenge of online competition both in the United States and in many key markets, from a variety of startups as well as Amazon. The company began to reorient its focus to “omnichannel” integration of bricks and mortar with online sales. This shift included a massive Walmart spending spree on acquisitions of, or formation of strategic partnerships with, startup or fast-growing e-commerce and delivery companies over 2016–2018, ranging from India (purchase of Flipkart); to Japan (a tieup with Rakuten); to China (a partnership with jd.com); to Mexico and Chile (purchase of Cornershop); to the United States itself (purchases of jet.com, shoes.com, Bonobos, Parcel, Moosejaw, Eloquii, ShoeBuy, Bare Necessities, and art.com). All this occurred at the same time as Walmart admitted failure with its own first-party sales platform in Brazil, shut it down, and shifted toward a smaller third-party e-marketplace and let go of many staff. The company then initiated moves to wind down even that marketplace that were only competed after the sale to Advent. This is true even though e-commerce was generally growing faster than the overall retail sector in Brazil, and traditional national retailers in areas such as shoes, fashion as well as consumer electronics succeeded in creating profitable online sales operations.26 Hence, for reasons that may speak more to the company’s poor feel for the Brazilian consumer than with any limitations of the Brazilian e-commerce market itself, a company that was trying to reposition itself globally around the most dynamic new segment of retail—online and omnichannel—found itself out of sync with those aspirations in Brazil and mired with unprofitable bricks and mortar operations in addition. In other words, the shift in the company’s global focus and priorities may well have been a contributing if not decisive factor in pushing the company toward the exit door in Brazil. By maintaining a 20 percent share of what would become Grupo BIG, it at least kept a toe in the water for a potential re-entry, though that seems unlikely as of October 2020.

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Post-Script on Advent Ownership: From Walmart to Grupo BIG This study does not attempt a thorough assessment of the implications for labor contestation or competitive performance of Advent’s takeover, approved in August 2018 by the Brazilian competition authority. Yet a brief overview of the initial 16 months of Advent ownership through the end of 2019 is instructive, in part as it shines light on where Walmart was deficient competitively but also in terms of how labor actors have responded by seeking to address longstanding problems. As a private equity (PE) firm, Advent was experienced around the world and in Brazil in taking over troubled firms, trying to return them quickly to profitability, and then seeking an exit with very high returns on investment within five or so years via sale to strategic buyer, re-sale to original owner, or initial public offering (IPO).27 The terms of the deal with Walmart were never made public, and may include some provisions giving the company a leg up (perhaps a right to match any offer and guarantee of having a right to make an offer) in any future sale to a strategic buyer. Since 1989, Advent had invested, as of September 2020, in 360 firms in 41 countries,28 and in Brazil alone, by the time of the deal, it had taken control of 30 companies in several sectors since its country office opened in 1997, with a focus on retail, consumer goods, and hospitality.29 As the takeover entailed bringing in new management and taking the firm private with information kept even more close to the vest, it is difficult to gauge performance, as attested by the fragmentary information in Table 6.1 past 2018. The Walmart do Brasil Ltda corporate name, along with Walmart brands for Supercenters, was maintained through September 2019, when the company was reorganized as Grupo BIG. The BIG trademark was a legacy of Walmart’s earlier acquisitions in the South of Brazil from Portuguese retail conglomerate Grupo SONAE. In the period through the end of 2019, the Advent-owned Walmart/BIG did not strip assets in visible ways, invested new capital (R$1.9 billion or US$465.9 million was to be invested over three years beginning in August 2018),30 and does not seem to have leveraged the company with debt—as the PE industry has been often been charged with doing in developed countries and particularly Anglo-American contexts. Advent’s new management team—many of whom, tellingly, had worked at Carrefour in Brazil and/or France—did begin to restructure operations focused around a few of the legacy brands that Walmart acquired during

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its expansion in the mid-2000s to early 2010s. Advent/BIG phased out all but the Sam’s Club (membership-based warehouse stores) among Walmart brands, under the latter of which in fact new investments were announced in August 2019 to build ten new stores.31 Dropping the Walmart brand meant the announced rebranding of about 127 stores to the BIG, BIG Bompreço, and Maxxi brands by June 2020. The latter move reflected both a sense of the diminished appeal of the Walmart brand for Brazilian consumers as well as the desire to cease paying royalties to Walmart on sales revenues from these stores, which was set at 0.7 percent of all sales. In yet another revealing decision about what ailed the operations it had taken over, in mid-2019 the Advent management moved openly to an aggressive discounting strategy that it had already inched toward in practice, formally jettisoning EDLP. Also, as part of a major restructuring, a decentralized corporate structure involving five commercial regions was instituted, reversing Walmart’s ill-fated systems integration. The Walmart information system was shelved, in favor of a return to a version of the systems used by the regional supermarket chains that Walmart had acquired in 2004–2005. In terms of formats, steps were taken to transform some hypermarkets into the cash and carry format, a step Walmart had taken belatedly and only on a small scale. In short, Advent/BIG moved to try to address many of the difficulties weighing down Walmart Brazil that were noted by management observers and business journalists over many years. On the employment and labor relations front, evidence that is fragmentary still paints a picture that contrasts somewhat with the fears of some observers about a PE takeover. There was not initially, the country’s leading business newspaper reported in January 2019, “a cascade of dismissals or mass closing of stores.” By that point, only one store had been closed. However, by early 2020 the company was reporting 412 stores,32 down from 437 in early 2019, though new stores were also being built so there was a situation of flux. In terms of workforce, the company said it had 53,641 workers as of 2020 (though, as apparently was true before as well, figures also included distribution centers, pharmacies, and gas stations); this fact suggested net employment creation from the estimated 50,000 Walmart workers in 2018. However, no information is available on how many were full-time as opposed to employed under the various part-time or intermittent/zero hours modalities discussed in Chapter 6. As the company refused to divulge sales revenues even to the

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Brazilian Association of Supermarkets (ABRAS) for its annual company rankings, it is impossible to gauge gross performance or market share. All in all, the general tendency toward losses in jobs and wages visà-vis non-PE owned firms that Appelbaum and Batt (2014, 193–238) found in their mixed-methods study of the labor and employment impacts of PE-buyouts in the United States was not borne out in Advent’s initial 16 months of ownership—admittedly a short time frame from which to draw any definitive conclusions. The collective bargaining agreements (CBAs) from 2015 onward considered in Chapter 6 include one from each city negotiated after Advent’s takeover—generally, they do not suggest any break in the tendency for the respective unions after the 2017 labor reform to seek to codify and circumscribe some of the shifts in contracts, working time, and other work rules, albeit with some differences between São Paulo on the one hand and Osasco and Bauru, on the other. Of course, these are CBAs with the employers’ union rather than single company-union agreements, the latter of which are less common outside the realm of results sharing (PLR). Two developments in labor-management relations at the end of 2019 suggest a mutual desire to use the shift in ownership and management to re-establish better working relations. The first was the agreement with the center-right CNTC33 -led bloc signed in December reached through mediation with the Supreme Labor Tribunal, noted in Chapter 6. This accord covered not only results sharing but also codified how the controversial Policy of Guidance for Improvement (POM), also discussed in that chapter, would be handled regarding employee internal due process governing discipline and dismissal. This policy had been the source of many successful legal challenges for employees. The second was a company-union agreement that same month with the center-left Osasco union SECOR. The union reports (without giving details) that the agreement addressed many of the issues unionists had raised against Walmart for years and that showed up in the court cases discussed in Chapters 4 and 6: “maternity leave, end to deviation from job function (desvio de função), protection against moral and sexual harassment, use of bathrooms, union relations, Policy of Guidance for Improvement [POM], and return of union sign-offs on contractual rescissions (homologação).”34 The accord was approved on individual ballot by 82 percent of workers who voted. While it would be very premature to read too much into these agreements (which, additionally, preceded the COVID-19 pandemic, still

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ongoing as of this writing), they appeared to be an effort to move away from the distrust that had festered during Walmart’s waning years and to begin to tackle issues of worker mistreatment and anti-union discrimination that had in effect only been addressed (however incompletely and if at all) in the labor justice system. Efforts by unions to try to turn PLR negotiations into a forum for gaining traction on many of these very same issues of workplace practice did not show major, sustainable results, previous chapters have shown, even when formal agreements were reached or company commitments made. To the extent, the late 2019 accords intimated a move toward a more pragmatic approach to LR/HRM issues by BIG under Advent, these developments are not inconsistent with the findings of Batt and Applebaum, from their U.S. case studies of PE-managed firms following buyouts; the authors found that there were “differences in private equity’s approach to labor” across firms that have been taken over—some seeking to break or isolate unions, others seeking negotiated agreements—and that such differences “often made a big difference in how workers fared” (Appelbaum and Batt 2014, 233–238). Viewed through the history of labor contestation at Walmart, these moves suggest that the strides toward conflictual cooperation tentatively made in the late 2000s, which started to unravel by the time of the 2013 first round of store closures but continued with at least sporadic PLR negotiations (discussed in Chapter 6), left an important legacy of realistic but unfulfilled negotiating goals that unionists could hark back to in trying to engage Walmart’s successor. At the same time, the difficulties in sustaining gains from conflictive cooperation should give pause in terms of extrapolating from these promising developments.

Conclusion The constraints and countervailing forces facing global capitalist firms in a competitive, low-wage sector marked by precarious work like supermarket retailing, and in a developing country such as Brazil, are inherently relative and structurally circumscribed. Yet this study shows that they were real, and for a considerable period of time were growing, during Walmart’s 23-year traverse through Brazil. In a context of expanding institutional space for labor contestation in the formal-legal realm, workers increasingly better informed about their rights and empowered to take individual or collective action, unions seeking to pressure and

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engage the firm on new issues and in a more encompassing fashion, and an active and often activist set of professional institutions of labor justice—all pushed boundaries and groped to find new tools in apparently innocuous reforms to reshape the norms-transgressing behavior of Walmart. On the face of it, economic slowdown and recession post-2014, and a restructuring of the struggling firm, then compounded by national legislative reforms that were decidedly anti-labor in design and intent, threatened to undo any gains and reverse them. But the study shows that these new economic realities as well as new legal norms became instead actively contested terrain, however unlevel the playing field. What was being contested was the course of dictates from flexible market reformers in Brasília determined in practice at bargaining tables, in litigation in the wounded if still functional labor-court system, and in efforts by unions and employer unions to make sense of reforms and embed and sometimes “defang” them within established practices. Labor-management interactions within established norms and customs, reflected in collective bargaining agreements, refracted and mediated the impact of national reforms, blunting some of the hyper-flexibility agenda at least in the immediate term captured by this study. In short, the institutional residue of what was built up in the mid-2000s to the mid-2010s was not washed away but rather got reworked in light of new economic realities and de jure legal reforms and purposive actions by creative union and state regulatory agents. This took place in a complex process of sedimentation and layering of “old” and “new” institutions, which has been fairly characteristic of the pendular back and forth rather than linear trajectory of change in labor institutions since Brazil’s return to democracy in the 1980s. The study has built a framework of examining global expansion of a multinational corporation through the prism of its national embeddedness in sets of variable national institutions, in flux and shaping but also molded by the agency of actors who contest the high human and social costs of Walmart’s unique and pernicious blend of repressive familialism and anti-unionism; at the same time, they also contest broader aspects of a low-wage, high-turnover flexible-work model that are pervasive in the sector. Anchored in careful cross-national comparisons within Latin America showing significant variation in the extent and nature of labor contestation surrounding Walmart, the study has underlined that nationally inscribed actors within nationally embedded institutions that vary significantly across countries in a global age still have a significant mediating role between corporate strategy and processes

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of labor contestation, in some countries inhibiting or dispersing challenges and challengers while in others enabling and empowering them. The institutionally nested agency of the social and state actors working within, through, or sometimes around these institutions in turn molds the economic and social impacts of global firms as well as even, in the Brazilian case, the competitive viability of inward investments by MNCs—particularly where diffusion of home-office practices prevails over adaptation to national contexts. In the end, the rise, expansion, decline, and exit of Walmart from Brazil is a cautionary tale about the excesses and even hubris in the practice and execution of global expansion by a company that has trouble overcoming its parochialism even as its ambitions for growth know no territorial boundaries. Global expansion and cosmopolitanism do not necessarily go hand in hand, and failures of adaptation to the realities of distinct national institutions and markets can be the Achilles heel even of corporate giants that seem at various junctures like unstoppable juggernauts. Other multinationals with very distinctive corporate models that strongly bear the DNA of their home country’s markets and institutions might be wise to heed the lessons of Walmart’s decidedly uneven global expansion, exemplified by this study of Brazil and Latin America. Such caution is particularly in order if their effort to conquer foreign markets entails narrowly diffusing home-country practices rather than calibrating them carefully to distinctive national markets and institutions they take the time to study carefully. And those in host countries who look to challenge, engage, or “tame” such companies—whether it be an Amazon or an Uber or some other as yet obscure company, and be they employees, smaller companies, unionists, regulators, or civil society activists—are equally well served by looking to the experiences of contesting Walmart in countries such as Brazil for useful lessons. Such prospective challengers should take faith that their toolkit for action may not be as empty as it might seem at first glance.

Notes 1. Grupo Carrefour Brasil, “Our History,” n.d., https://www.grupocarrefo urbrasil.com.br/en/the-carrefour/our-history/. Accessed September 7, 2020. 2. Author’s calculations from Ranking do ABRAS, various years, available at abras.com.br.

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3. Época Negócios, “Linha do Tempo Mostra a História do Grupo Pão de Açúcar,” June 22, 2012, https://epocanegocios.globo.com/Inspir acao/Empresa/noticia/2012/06/conheca-historia-do-gpa-e-entenda-pas sagem-de-bastao-para-o-casino.html. Accessed September 7, 2020. 4. Authors’ calculations from following: Ranking do ABRAS, various years, available at abras.com.br. Data on annual profits from: Rita Azevedo, Valor Econômico, “Lucro do Grupo Pão de Açúcar Cai 86% no Quarto Trimestre de 2019,” February 19, 2020, https://valor.globo.com/emp resas/noticia/2020/02/19/lucro-do-grupo-pao-de-acucar-cai-86perc ent-no-quarto-trimestre-de-2019.ghtml. Accessed September 7, 2020; Seu Dinheiro, “GPA Registra Lucro de R$ 414 milhões no 4º Trimestre,” February 21, 2019, https://www.seudinheiro.com/2019/gpa/balancogpa-4-trimestre/. Accessed September 7, 2020; Reuters, “Update 2Brazil’s GPA Loses Money for 7th Straight Quarter as Restructuring Bites,” February 24, 2017, https://www.reuters.com/article/gpa-res ults/update-2-brazils-gpa-loses-money-for-7th-straight-quarter-as-restru cturing-bites-idUSL1N1G90E7. Accessed September 9, 2020; and G1, “GPA Tem Lucro de R$ 865 Milhões em 2017,” February 19, 2018, https://g1.globo.com/economia/noticia/gpa-tem-lucro-de-r-865-mil hoes-em-2017.ghtml. Accessed September 7, 2020. 5. Authors’ calculations based on four Presidents/CEOs from February 2008 to August 2008 when the Advent transaction was approved by regulatory authorities and Advent named its own CEO. Cuban-American and U.S.-trained Héctor Nuñez, who had worked for three years with other companies in Brazil, served from February 2008 to September 2010, after which time he left the company. Brazilian Marcos Samaha, trained in Brazil, had the role from October 2010 to August 2013, after which time he left the company. He was succeeded by Brazilian citizen and Brazil-educated Guilherme Loureiro, who served until January 2016. At that time, Brazilian citizen and Brazil-educated Flávio Cotini took over, serving from January 2016 until Advent’s managerial takeover in August 2018. Sources: Executive profiles at corporate.walmart.com/ newsroom, various years, and João Werner Grando, “Héctor Núñez, Ex-Presidente do Walmart no Brasil, Deixa a Empresa,” Exame, October 22, 2010, https://exame.com/negocios/hector-nunez-ex-presidentedo-walmart-no-brasil-deixa-a-empresa/. Accessed September 12, 2020; Adriana Mattos, “Guilherme Loureiro, ex-Unilever, é Novo Presidente do Walmart Brasil,” Valor Econômico, August 13, 2013, https://valor. globo.com/empresas/noticia/2013/08/13/guilherme-loureiro-ex-uni lever-e-novo-presidente-do-walmart-brasil.ghtml. Accessed September 12, 2020; and Macroaxis, “Marcos Samaha—P ACUCAR Executive Officer,”

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n.d., https://www.macroaxis.com/invest/manager/PCAR3.SA--MarcosSamaha. Accessed September 12, 2020. See previous note for details. For example, Brad Haynes and Nathan. Layne, “Insight: Lost in Translation,” Reuters , February 17, 2016, https://www.reuters.com/article/uswalmart-brazil-idUSKCN0VQ0EQ. Accessed September 12, 2020; “Seis razões que explicam o fracasso do Walmart no Brasil,” Veja, August 14, 2019, https://veja.abril.com.br/economia/seis-razoes-que-explicamo-fracasso-do-walmart-no-brasil/. Accessed September 12, 2020; Maria Filgueira Batista, “O Walmart Vai Cizer ‘Bye-Bye, Brazil’?” Revista Exame, last revised August 3, 2018, https://exame.com/revista-exame/ o-gigante-se-rende/. Accessed September 12, 2020; and various articles by retail correspondent Adriana Mattos, Valor Econômico, cited above and below, as well as articles from O Globo website, also cited where most relevant. J. W. Grando, “Héctor Nuñez,” Exame, October 22, 2010, https:// exame.com/negocios/hector-nunez-ex-presidente-do-walmart-no-brasildeixa-a-empresa/. Accessed September 12, 2020. WAL-MART STORES, INC. (NYSE: WMT), Fourth Quarter Fiscal Year 2016 Earnings Call, February 18, 2016, https://s2.q4cdn.com/056532 643/files/doc_financials/2016/Q4/Q4-FY16-Consolidated-transcriptfinal.pdf. Accessed September 12, 2016. Fashion Network, “Walmart Conclúi Integração de Lojas e Quer Investir R$ 1 bi Este Ano,” July 5, 2016, https://br.fashionnetwork.com/news/ walmart-conclui-integracao-de-lojas-e-quer-investir-r-1-bi-este-ano,710 791.html. Accessed September 12, 2020. Fashion Network, “Walmart Conclui,” July 5, 2016, https://br.fashio nnetwork.com/news/walmart-conclui-integracao-de-lojas-e-quer-investirr-1-bi-este-ano,710791.html. Accessed September 12, 2020. MarketWatch, “Wal-Mart Pitches ‘Everyday Low Prices’ Overseas,” June 1, 2011, https://www.marketwatch.com/story/wal-mart-pitcheseveryday-low-prices-overseas-2011-06-01. Accessed September 15, 2020. Miguel Bustillo, “Wal-Mart Executive Aims to Accelerate Growth Overseas,” Wall Street Journal (online), June 27, 2011, https://searchproquest-com.ezproxy.cul.columbia.edu/docview/873688396/93A48D C9AF8E43A9PQ/1?accountid=10226. Accessed September 12, 2020. “Walmart Pretende Voltar a Reabrir Mercados em 2015,” Folha de São Paulo, October 13, 2014, http://www.secor.org.br/walmart-pretendevoltar-a-reabrir-mercados-em-2015/. Accessed September 12, 2020. Said McMilon, “…we decided to decelerate our investment in new stores in order to ensure we are building a solid base to increase same-store sales andr expand Everyday Low Prices. We took that decision last year.” Cited in Adriana Mattos, “Walmart

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Tem Prejuízo no Brasil e Revê Expansão.” Valor Econômico, August 17, 2012, https://valor.globo.com/empresas/noticia/2012/08/17/wal mart-tem-prejuizo-no-brasil-e-reve-expansao.ghtml. Accessed June 12, 2020. Andrew Clark, “Wal-Mart Pulls Out of Germany,” The Guardian, July 28, 2006, https://www.theguardian.com/business/2006/jul/28/retail. money. Accessed September 15, 2020; and Mark Landler, “Wal-Mart Gives Up Germany,” New York Times, July 28, 2006, https://www. nytimes.com/2006/07/28/business/worldbusiness/28iht-walmart.232 5266.html. Accessed September 15, 2020. $US1 = 1004 won on December 30, 2015. https://www.poundster linglive.com/bank-of-england-spot/historical-spot-exchange-rates/usd/ USD-to-KRW-2005. Accessed September 15, 2020. “Wal-Mart to Leave S. Korea,” South Florida Sun Sentinel, May 23, 2006, https://www.sun-sentinel.com/news/fl-xpm-2006-05-23-060522 0487-story.html. Accessed September 15, 2020; and Choe Sang-Hun, “Wal-Mart Selling Stores and Leaving South Korea,” New York Times, May 23, 2006, https://www.nytimes.com/2006/05/23/business/wor ldbusiness/walmart-selling-stores-and-leaving-south-korea.html?search ResultPosition=1. Accessed September 15, 2020; and Kim Chipman, “Wal-Mart’s Korean Stores Target of Organizing Push,” Orland Sentinel, August 24, 2005, https://www.orlandosentinel.com/news/os-xpm2005-08-24-walmart24-story.html. Accessed September 15, 2020. K. Chipman, “Wal-Mart’s Korean Stores,” August 24, 2005. Says the Walmart website: “What is the origin of the Wal-Mart cheer? Our founder, Sam Walton was visiting a tennis ball factory in Korea, where the workers did a company cheer and calisthenics together every morning. He liked the idea and couldn’t wait to get back home to try it with his associates. He said, ‘My feeling is that just because we work so hard, we don’t have to go around with long faces all the time - while we’re doing all of this work, we like to have a good time. It’s sort of a “whistle while you work” philosophy, and we not only have a heck of a good time with it, we work better because of it.’” Walmart, http://www.wal-martchina.com/ english/walmart/rule/wmcheer.htm. Accessed September 16, 2020. See, for instance, Adriana Mattos, “Erros Táticos Impedem que Walmart Avance no Brasil,” Valor Econômico, February 24, 2014, https://valor. globo.com/empresas/noticia/2014/02/24/erros-taticos-impedem-quewalmart-avance-no-brasil.ghtml. Accessed September 16, 2020. Nikkei Asian Review, “Walmart’s Japan Exit Comes Amid Deflation and Rise of E-commerce,” July 12, 2018, https://asia.nikkei.com/Business/ Walmart-s-Japan-exit-comes-amid-deflation-and-rise-of-e-commerce. Accessed September 16, 2020; Hunt et al., “Walmart’s International Expansion,” 2018, 26–27; and Y. Aoyama (2007).

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23. Ritsuko Ando, Reuters, “Walmart’s Struggling Japan Unit Finally Delivers with Online Grocery Growth,” February 20, 2020, https://www.reu ters.com/article/us-japan-walmart-seiyu/walmarts-struggling-japan-unitfinally-delivers-with-online-grocery-growth-idUSKBN20E0HY. Accessed September 16, 2020. 24. Nikkei Asian Review, “Walmart’s Japan Exit,” July 12, 2018; and Hunt et al., “Walmart’s International Expansion,” 2018, 26–27; and Y. Aoyama (2007). 25. We are indebted to series co-editors Rebecka Villanueva Ulfgard and César Villanueva for raising this question. 26. See Economist Intelligence Unit, “Industry Report: Consumer Goods and Retail-Brazil,” 1st quarter reports, 2016–2020. Reports available at eiu. com. Accessed October 7, 2020. 27. Gouvêa Ecosystem, “Entenda a Venda do Controle do Walmart Brasil para Advent,” June 26, 2018, https://grupogouveadesouza.com.br/ 2018/06/26/entenda-a-venda-do-controle-do-walmart-brasil-para-adv ent/. Accessed September 17, 2020. 28. Advent International, “Investments,” https://www.adventinternational. com/investments/. Accessed September 17, 2020. 29. Gouvêa, “Entenda,” 2018. 30. Adriana Mattos, “Advent Injeta Recursos na Operação do Walmart,” August 27, 2018. Accessed September 17, 2020. 31. Reuters, “Walmart Brand to Be Dropped from Supermarkets in Brazil,” August 12, 2019, https://global-factiva-com.ezproxy.cul.columbia.edu/ ha/default.aspx#./!?&_suid=160038597202009070407977537587. Accessed September 17, 2020. 32. Grupo Big, “Sobre o Grupo Big,” n.d., https://web.archive.org/web/ 20190815010414if_/https://www.big.com.br/sobre-o-grupo. Accessed September 17, 2020. 33. This stands for Confederação Nacional de Trabalhadores no Comércio, discussed in earlier chapters. 34. SECOR, “Trabalhadores Aprovam Acordo Coletivo de Trabalho entre SECOR e BIG,” December 13, 2019, http://www.secor.org.br/ trabalhadores-aprovam-acordo-coletivo-de-trabalho-entre-secor-e-big/. Accessed September 17, 2020.

References Aoyama, Yuko. 2007. “Oligopoly and the Structural Paradox of Retail TNCs: An Assessment of Carrefour and Wal-Mart in Japan.” Journal of Economic Geography 7: 471–490.

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Aoyama, Yuko, and Guido Schwarz. 2006. “The Myth of Wal-Martization: Retail Globalization and Local Competition in Japan and Germany.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 275–292. New York and London: Routledge. Appelbaum, Eileen, and Rosemary Batt. 2014. Private Equity at Work. New York: Russell Sage. Berger, Suzanne, and Ronald Dore, eds. 1996. National Diversity and Global Capitalism. Ithaca, NY: Cornell University Press. Bizberg, Ilán. 2019. Diversity of Capitalisms in Latin America. London: Palgrave. Burt, Steve, John Dawson, and Leigh Sparks. 2003. “Failure in International Retailing: Research Propositions.” International Review of Retail, Distribution and Consumer Research 13 (4, October): 355–373. Cristopherson, Susan. 2006. “Challenges Facing Wal-Mart in the German Market.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley Brunn, 261–274. New York: Routledge. Durand, Cédric. 2007. “Externalities from Foreign Direct Investment in the Mexican Retailing Sector.” Cambridge Journal of Economics 31: 393–411. Hall, Peter A., and David Soskice, eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York and Oxford: Oxford University Press. Hollingsworth, J. Rogers, and Robert Boyer, eds. 1997. Contemporary Capitalism: The Embeddedness of Institutions. Cambridge and New York: Cambridge University Press. Hunt, Irma, Allison Watts, and Sarah K. Bryant. 2018. “Walmart’s International Expansion: Successes and Miscalculations.” Journal of Business Strategy 39 (2): 22–29. https://doi.org/10.1108/JBS-02-2017-0013. Kim, Reneé. 2008. “Wal-Mart Korea: Challenges of Entering a Foreign Market.” Journal of Asia-Pacific Business 9 (4): 344–357. https://doi.org/10.1080/ 10599230802453604. Landler, Mark, and Michael Barbaro. 2006. “Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture.” New York Times, August 2. https://www.nyt imes.com/2006/08/02/business/worldbusiness/02walmart.html. Accessed September 22. Nölke, Andreas. 2019. “Comparative Capitalism.” In The Palgrave Handbook of Contemporary International Political Economy, edited by T. M. Shaw et al., 135–151. London: Palgrave. https://doi.org/10.1057/978-1-13745443-0_9. Schneider, Ben Ross. 2013. Hierarchical Capitalism in Latin America: Business, Labor and Challenges of Equitable Development. New York and Cambridge: Cambridge University Press.

Index

A Abal Medina, Paula, 29, 33, 160–162, 165, 166, 178, 179, 181–183, 195–197 Administradoras de Riesgos del Trabajo, 182 Advent International, vii, 287 purchase of majority stake in Walmart Brazil, vii, 177 transformation of Walmart into Grupo Big, 212, 217, 219, 238, 278 agency adaptations and resiliency of norms, 9 appropriation of norms, 8 institutionally nested, ix, xi, 5, 7, 8, 17, 18, 153, 154, 195, 208, 209, 247, 265, 283 (re)interpretation of norms, 20, 117 re-purposing of norms, 85 Alexander, Nicholas, 43 Amapá, 243

Amazon.com, 277, 283 Amengual, Matthew, 180–182 anti-unionism. See also Walmart dismissal of activists and sympathizers, 162, 242 forms taken in countries without non-union option, 155 in discourse, 155 in practice and behavior, 83, 155, 156, 158, 159, 161, 169, 170, 194, 241 undermining of unions as institutions, 14 Appelbaum, Eileen, 280, 281 apprentices. See Walmart Araquara, São Paulo, 119 Ararás, commercial workers’ union of, 231 Argentina labor centers in, 102, 103, 116 labor courts in, 180, 182 labor inspectors in, 180

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. B. Martin et al., Labor Contestation at Walmart Brazil, Governance, Development, and Social Inclusion in Latin America, https://doi.org/10.1007/978-3-030-74672-8

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INDEX

role of shopfloor delegates (delegados ) in, 164, 178 Walmart in, 154 Arkansas, 2, 270. See also Walmart “made in Bentonville”, 31 small-town roots of Walmart culture, 2 Arnold, Stephen J., 33, 43, 138 Asia, 3, 9, 39, 42, 44. See also China; Indonesia; Japan; South Korea Asociação Brasileira de Supermercados (ABRAS), 53, 89, 136, 211, 212, 280 Asociación Nacional de Tiendas De Autoservicio y Departamentales (ANTAD), 168 Assistencialismo (welfarism). See unions associates asociados in Argentina, 25 banning of language of “workers”, 25 colaboradores in Chile, 25, 122, 172 Walmart’s discursive reconstruction of employees, ix, 155 Atacarejo. See cash and carry format atypical contracts, 132, 133, 210, 223, 224, 227, 228, 248. See also part-time work home office work (teleatendimento) in 2017 labor law reform, 31, 210 “mini-jobs” as concern, 228 on call work in 2017 labor law reform, 210 Auditores fiscais do trabalho. See labor inspectors authoritarian regime in Argentina, 4, 152 in Brazil, 4, 20 in Chile, 4

B Bachelet, Michelle of Chile, 172 baggers empacatadores in Brazil, 226 minors as unpaid baggers in Mexico, xv Seniors and children as unpaid baggers in Mexico, 164, 189 Batt, Rosemary, 280, 281 Bauru, São Paulo, 58, 60, 63, 64, 66, 119, 125, 135, 145, 222, 225, 226, 228, 232, 280 benefits, social, 137, 155, 161, 165, 168, 178, 233. See also collective bargaining Bensusán, Graciela, 160, 163, 190, 191 bodily searches, 27, 83, 120, 121, 126, 244, 246. See also legal claims-making strip searches, 124 Bolsa Família conditional cash transfer program, 86 Bolsonaro, Jair, 210, 219, 229, 232 Bompreço, 279. See also Royal Ahold; Walmart acquisition by Walmart, 108 bonus pay, 174, 179. See also results and profit sharing attendance bonuses, 31, 227 results and profit sharing in Brazil, 82, 192 Brasília, 102, 120, 121, 243, 282. See also Federal District Brazil congress, 102 corporatist labor institutions, 54 corporatist-pluralist hybrid system, 84 economic growth, 57, 86 economic policy and market reforms, 7, 20, 51, 57

INDEX

executive decrees (medidas provisórias ), 71, 219 inflation, 50, 213, 250, 268 labor courts, collective claims, 117, 182, 234, 235, 247 labor courts, individual claims, 67, 68, 117, 118, 123, 124, 220, 233 labor inspectors, 83, 85, 118, 180, 247 labor prosecutors, xvi, 8, 9, 61, 171, 180, 182, 206, 208, 241 political crisis in, 5, 102 post-2014 economic and political crisis in, 282 Real Plan stabilization program, 67 recession, 86, 206, 209, 210, 212, 229, 249, 250, 271 thickening of labor institutions, 85, 92, 138 2017 flexible labor reform (Law 13.467), 9 unemployment, 57, 69, 250, 269 “Brazilianization”, 84, 267 “bricks and mortar” retail, 177, 277 contrasted with e-commerce and omnichannel retail, 277 Buenos Aires, City of (Federal Capital), 25, 160, 162, 166, 179–181 Burt, Steve L., 17, 40, 41, 43–46, 72, 264 business associations, 13 business culture, 2, 40, 45. See also management culture business unionism. See also unions among Brazilian commercial workers’ unions, 56–58, 93, 171, 213, 235 in Argentina, 183, 195 in Chile, 30, 175, 195 in Mexico, 30

291

C Campinas, commercial workers’ union of, 56, 57 Canada, 24, 26, 42, 43, 46, 54, 62, 69, 177, 184, 270, 273, 275 Cardoso, Adalberto, 57, 58, 67, 68, 72, 74 Cardoso, Fernando Henrique. See also Brazil as finance minister, 50 as president, 50 Carrefour, vii, 18, 28, 30, 42–44, 46, 49, 50, 52, 53, 66, 83, 88, 107, 118, 126, 127, 138, 157, 266, 267, 269, 278, 283. See also multinational corporations (MNCs) autonomy of Brazilian subsidiary, 216 Grupo Carrefour Brasil, 266 IPO in Brazil, 278 Carré, Françoise, 23, 28–31, 83, 126, 131, 137, 153, 156–158, 162, 169, 178, 186–189, 225 case study method, 15, 152, 179, 222 cash and carry (atacarejo) store format, 266, 269, 270, 276, 279 cash and carry format, 269 cashiers, 65, 100, 114, 126, 136, 137, 168, 224, 226 Casino Group. See Grupo Pão de Açucar (GPA) Cencosud (Chile), 159 Center-West region of Brazil, 118, 240 Central dos Trabalhadores e Trabalhadoras do Brasil (CTB), 103, 104 Central Geral dos Trabalhadores do Brasil (CGTB), 103

292

INDEX

Central Única dos Trabalhadores (CUT), Brazil, xviii, 56, 102, 144, 215, 255 Central Unitaria de Trabajadores (CUT), Chile, 173 Chief executive officer (CEO). See also Trius, Vicente; Walmart of Walmart, 143, 153, 167, 250, 267, 270 of Walmart International, 119, 241, 249–251, 270, 274 shared with role of corporate president, 250 Child labor, 2, 167, 168, 181, 193. See also labor rights Chile labor courts in, 172 labor enforcement in, 6 labor ministry in, 122, 166 Walmart in, vii, xvii, 23, 159, 173, 174, 239 China, 33, 42, 44–46, 115, 177, 249, 250, 252, 253, 258, 270, 276, 277 Christian Democratic Party (Chile), 172 Cifra S.A. de C.V., Grupo (Mexico), 168 joint venture with Walmart, 41, 184 sale of stores to Walmart, 162 civil public actions (ações civis públicas-ACPs), 97, 117, 234, 247. See also legal claims-making; labor prosecutors civil society, 15, 90, 283. See also Non-governmental organizations (NGOs); unions cleaning/janitorial staff (faxineiros ), 136 clerks, 179, 224 co-determination, 70, 273 Coe, Neal M., 16, 44, 48, 72

Colima, State of (Mexico), 192 Colla, Enrico, 46, 49 collective action. See also strikes Black Friday solidarity protests, 180 job actions, 24, 66 opportunity structures, 155 protests, 66 repertoires of, 112 unions—structural power, associational power, 7, 23, 85, 131, 193 collective bargaining acuerdo marco framework agreements in Chile, 174 autonomy from state, 30 convenios colectivos as limited form of in Chile, 174 coverage rates, 54, 112, 173 firm-and worksite-specific (acordos coletivos), 57, 98, 104 multiemployer, by occupational category and by municipality (convenções coletivas ), 57, 98, 104, 111 non-wage issues, 83 pulverization of, 56, 58 wage trends and wage setting, 213 Collor, Fernando, 50 collusion and capture, 185 state-Walmart relations in Mexico, 185 Comissao interna de prevenção de acidentes (CIPA), 65, 127, 128. See also workplace health and safety commercial workers, xiv, 23, 54, 56, 64, 66, 70, 85, 96, 99, 103–105, 108, 109, 111–115, 117, 132, 135, 175, 212, 213, 215, 216, 218, 220, 225, 226, 231, 233, 257, 273 as occupational category, 60

INDEX

traditional conservative identity, 58 commercial workers’ unions. See also individual cities associational power of by labor center affiliation, 92, 214 Federations of, 54, 104, 174 in Argentina, xvii, 13, 24, 30, 154, 165, 169, 177, 183, 193, 194 in retail, 213 structural power of, 56, 85, 93, 112, 138, 175, 193, 194, 248 Companhia Brasileira de Distribuição (CBD). See Grupo Pão de Açucar (GPA) comparative capitalisms. See varieties of capitalism comparative method, viii. See also most similar systems research design Confederacão Nacional dos Trabalhadores no Comércio (CNTC) (Brazil), 104, 109, 215–217, 225, 227, 245, 256, 257, 280 Confederação Nacional dos Trabalhadores no Comércio e no Serviço (CONTRACS), xiv, xv, xviii, 56, 58, 64, 65, 72, 73, 104, 107–110, 113, 114, 117, 123, 124, 127, 142, 144, 215–217, 226, 231, 254, 287. See also CUT Confederación Revolucionaria de Obreros y Campesinos (CROC) (Mexico), 189, 192, 193 conflictual labor-management cooperation, 273. See also Collective bargaining; results and profit sharing congress of Brazil labor law reforms, 15, 31 need to approve executive decrees to make into permanent laws, 71

293

outsourcing law, 21, 124, 223 Conselho Administrativo de Defesa Econômica (CADE), 53, 72 constitution, 21, 54, 59, 67, 73, 74, 84, 94, 95, 120, 121 of Brazil, 40 Contagem, Minas Gerais, 56, 72, 108 Coordinadora Sindical Walmart (Chile), 176 Córdoba (Argentina), 182 corporate social responsibility (CSR), 84, 89–91, 140. See also Walmart corporatism. See also Brazil microcorporatism, 156 corruption, 185, 189, 191, 209. See also Department of Justice (DOJ); Securities and Exchange Commission (SEC) Foreign Corrupt Practices Act, 185, 252 Walmart corruption in Brazil, 253 Walmart corruption in Mexico, India, and China, 253 Costco Wholesale Corporation, 42, 48. See also multinational corporations (MNCs) Cristopherson, Susan, 16, 41, 46, 70, 72, 272–274 cupbearers (copeiros ), 136 D D & S, S.A. (Distribución y Servico), 171, 174 sale of stores to Walmart, 180 Delegacia Regional do Trabalho (DRT), 65. See also Labor Ministry, of Brazil democracy/democratic regime, 7, 40, 54, 186, 282 democratization, vii, 16, 20, 84, 171 transition to democracy, 189

294

INDEX

demographic characteristics. See also gender discrimination; Walmart educational attainment, 130 gender, 63–64, 82, 121, 127–128 race, 128 Departamento Intersindical de Estatística e Estudos Sôcio-Econômicos (DIEESE), xviii, 64–66, 74, 106, 108, 110, 112, 132, 134, 136, 137, 142, 210, 212–214, 223, 254, 255 Department of Justice (DOJ), 185, 252 developing countries, viii, 14, 44, 173, 186, 281 diffusion, global as corporate strategy, 12, 27, 62, 155, 264, 271, 276, 282 contrasted with national adaptation, 3, 153, 264 diffusionism at Walmart, 272 discrimination. See gender equality dismissal procedures and access to severance pay and unemployment insurance, 113 without just cause (sem justa causa) versus by common accord (por comum acordo) under 2017 labor reform, 256 dualization. See labor markets Dupuis, Marc, 46, 49 Durand, Cédric, 28, 30, 83, 157, 188, 266 E e-commerce. See also omnichannel, as retail in Chile, 176, 277 international trends and acquisitions, 214, 246–248, 272–273 startups and Walmart international acquisitions, 252, 277

third party versus first party, 214, 247, 249 workforce reductions in, 217 economic model, 183. See also economic policy neoliberalism and market orientation, 178 statism and import substitution in Latin America, 148 economic policy, 272. See also economic model fiscal stimulus in Brazil, 86 market reforms in Brazil, 7, 20 economism, 84, 116, 171. See also business unionism in labor relations research, 171 in union strategy, 116 Ekono (Chile), 174 emotional labor, 123 employers, viii, xiv, 2, 5, 6, 17, 19, 20, 22, 23, 27, 29, 42, 54, 57, 59, 64–68, 70, 71, 74, 84, 92, 93, 96, 99, 102, 103, 112, 117, 118, 126, 132, 135, 137, 139, 152, 154, 157, 161–164, 170, 177, 180, 182, 184, 189, 190, 193, 208, 210, 213, 219–223, 225–228, 230–234, 248, 256, 264, 273, 274, 280 employer unions (sindicatos de empregadores ) in Brazil, 221 European Union (EU), viii, 42. See also individual countries; Western Europe everyday low prices (EDLP). See also Walmart as core pillar of business model and global expansion, 265 contrast with discounting strategy of pricing, 16 lack of fit in overseas markets, 32

INDEX

unreceptivity of Brazilian consumers, 90, 270 exports, 9, 63, 86, 157 extra-judicial accord (termo de ajustamento de conduta-TAC), 234

F Federação dos Comérciarios do Estado de São Paulo (Fecomerciários), 109, 215, 218, 232, 254, 255 Federación Argentina de Empleados de Comercio y Servicios (FAECyS), 159, 160, 178, 180, 197 Federación Autónoma (Chile), 174 Federación de Sindicatos Walmart (Chile), 175 Federación Nacional de Trabajadores Líder (FENALTRALID), 174 Federal District, Brazil, 88, 97, 118, 121, 123, 124, 230. See also Brasília feminization of retail work, 131 Férnandez de Kirchner, Cristina, 177 Fernie, John, 43 flexibility of work. See also precarious work horizontal (internal or functional), 226 hyper-flexibility scenario in Brazil, 224 numerical (external), 31, 210, 221 of remuneration, 31, 163, 227 of working time, 133, 136, 163, 210, 227 flexible labor market reforms during Cardoso government, 50, 94 during Temer government (2017), 210 individual versus collective rights, 26

295

prevalence of “the negotiated” over “the legislated”, 220 Força Sindical labor center, 55, 58, 73, 103, 104, 114 foreign direct investment (FDI), 14, 157, 158, 186. See also multinational corporations (MNCs) Fórum Nacional do Trabalho (FNT), 92, 93, 102 Franco, Itamar, 50, 105 freedom of association, 61, 94, 169, 193 Fundo de Garantia de Tempo de Serviço (FGTS) severance accounts, 99, 133, 144

G gender discrimination, 27, 63, 167 gender equality discrimination in pay and promotions, 61, 131, 168 elimination of forced pregnancy testing at Walmart Chile, 167 relationship to occupational segmentation, 168 sexual harassment, 63, 122, 167, 183, 237, 240, 271, 280 work segmentation as correlate, 63–64 General Agreement on Tariffs and Trade (GATT), 41, 184 Germany, 24, 33, 42, 44–47, 49, 70, 72, 122, 266, 272–274, 276, 277 globalization, vii, 2, 16, 22, 42, 44, 49 Global Reporting Initiative (GRI), 91. See also corporate social responsibility (CSR); Walmart global retail, 7, 12, 23, 28, 29, 31, 33, 71, 84, 155, 206

296

INDEX

Global Social Compliance Initiative (GSCI), 91. See also corporate social responsibility (CSR); Walmart global South. See developing countries Goldman Sachs, 251 Great Recession, 112 Grupo BIG as successor corporate entity to Walmart Brazil owned by Advent, 217 labor agreements, 241, 274–277 new store construction and brand reorientation, 82 phasing out of Walmart brands, 207, 278 roots as brand acquired and operated by Walmart, 180 Grupo Pão de Açucar (GPA) as co-market leader with Carrefour, 51, 88, 126 history of ownership changes, 267 Restructuring in late 2010s, 235, 242, 263, 265 H Hochschild, Jennifer. See emotional labor home countries. See multinational corporations (MNCs) Home Depot, 41 host countries. See multinational corporations (MNCs) human resource management (HRM), 82, 87, 123, 136, 138, 155, 158, 240, 244, 264. See also labor relations (LR)/human resource management (HRM) human resource managers, 83, 216 interplay with store managers, 80– 81, 106, 113, 136, 267–268, 270. See also Walmart

human rights, 61, 161, 167, 168, 173. See also child labor; freedom of association; gender equality; psychological harassment (assédio moral ) hypermarkets, 50, 224, 250, 266, 270, 279. See also Carrefour; supercenters; Walton, Sam

I impeachment crisis, Brazil, xvi. See also Roussef, Dilma income per capita, 152 incomes policy. See wage and incomes policy India, 177, 185, 250, 252, 253, 258, 276, 277 Walmart ventures in e-commerce, 272–273 Walmart corruption, 248–249 Indonesia, 42, 44–46 industrialization, 23 post-industrialism, 22 Inflation annual rates, 249 impact on wage bargaining and real wages, 87 inflation, 50, 111, 212, 213, 268 informality, 86, 173, 181, 227 information technology (IT), 16, 241, 250 slowness and impacts of systems integration in Walmart Brazil, 279 trends in informality and formalization, 84, 134, 169, 177, 223 worker occupational trajectories straddling informal/formal divide, 131 Initial public offering (IPO), 278

INDEX

as exit strategy from private equity acquisitions, 278 by Carrefour in Brazil, 278 institutions associational and organizational space, 20 comparative-historical institutionalism, 19 conversion as mode of institutional change, 21 corporatist labor institutions, 54 de facto versus de jure, 54 defined, 20 displacement as mode of institutional change, 21, 219 embeddedness in national institutions, 12, 16 gradual institutional change (GIC) theory, vii, viii, xvi, 7, 12, 19, 170, 195, 208, 209 institutional change, 8, 21, 92, 195, 219 institutional continuity, 15 institutional fields, 170 layering as mode of institutional change, viii, 21, 103, 219, 220 national-sectoral labor relations institutions, 5, 8, 13, 154 shopfloor-disempowering elements of labor institutions, 178 thickening of, 85, 138 Instituto Nacional de las Personas Adultas Mayores (INAPAM) (Mexico), 193 intensification of work, 136, 137, 139, 246 Inter-American Development Bank, 68 intermittent (zero-hours) work contracts. See part-time work

297

International Labour Organization (ILO) core labor standards, 60 international conventions, 59, 98 recommendation on inspector to workforce ratios, 172 Itu, São Paulo, 226, 228

J Japan, 44, 46, 47, 72, 207, 270, 275–277 João Pessoa, Recife, 108, 215, 241 job functions, 227. See also collective bargaining; individual jobs and occupations broadbanding in some Brazilian collective bargaining contracts, 64 categories as defined in retail collective bargaining contracts, 54 joint venture, 41, 45, 46, 50–52, 158, 184, 267

K Kirchner, Néstor, 177, 181

L labor boards, Mexico (juntas de conciliación y arbitraje), 158, 160, 181, 183, 185, 187 Efforts to reform system from 2017, 185, 187–188 pro-employer bias of local labor boards regulating retail, 189 labor centers, 58, 67, 85, 94, 95, 103, 104, 107, 108, 117, 124. See also individual organizations labor contestation, xvi, xvii, 2, 3, 5–9, 30, 152, 154, 195, 206–209,

298

INDEX

240, 266, 275, 278, 281–283. See also legal claims-making; unions as concept, 7 degrees of by country as dependent variable, 152 shifts in levels over time in Brazil, 27 labor courts. See also Tribunal Regional do Trabalho (TRT); Tribunal Superior do Trabalho (TST) backlog of cases, 235 changes in functioning with 2017 labor reform, 217 length of time for cases to undergo appeals, 121 long-term strengthening of, 247 labor inspection data on inspections in Brazil, 190 meritocratic recruitment of inspectors, 172 patchwork system in Argentina, 183 professionalization, 180 strengthening and capacity in Chile, 126 underfunding, 190 understaffing, 113 weaknesses in Mexico, 69 workplace violations compared across major supermarkets, 83 labor laws Brazilian constitution of 1988, 40, 54, 59, 67 Chilean labor code, 180 Consolidated Labor Laws (CLT) of Brazil, 59 Federal Labor Law (LFT) of Mexico, 193 labor law reforms in Mexico 2017–2019, 31

labor-management relations, 28, 82, 108, 111, 130, 170, 218, 264, 280 labor markets business unionism, 171 dualization, 133 impacts of labor movement, xiii, xviii, 15 impacts of tight labor markets, 82, 112 moderate/conservative currents, 112 political/ideological currents, 16 labor ministry Dirección del Trabajo under Chilean ministry, 64 of Argentina, 177 of Brazil, 63, 65, 68, 92, 96, 98, 100, 101, 110, 122, 125–128, 132, 134, 212–213, 221 of Chile, 122, 166 Secretariat of Labor, Mexico, 257 labor process, 83 labor relations (LR)/human resource management (HRM). See also Walmart absence of non-union option outside United States, 153, 178 as corporate practices, 4, 15 as corporate strategy, 3, 264, 271 distinction from other functional areas of management, 32 labor justice and labor relations institutions, 194 state mediation of disputes, 13, 16, 20–21, 57, 69, 92, 95, 122, 150, 152, 158, 167–169, 179, 181, 185, 190 union avoidance, 15, 158 union substitution, 15 work rules, 4

INDEX

labor rights child labor as, 2 core labor standards, 60 work by minors, 27 Lage, Telma, 57, 58, 67, 68, 72, 74, 100 Latin America, vii, x, 2, 3, 7, 17, 18, 22, 23, 29, 42, 44, 140, 154, 156, 158, 173, 176, 274, 282, 283. See also individual countries legal claims-making. See also labor courts bodily searches as a motive, 27 collective claims, 117, 234 collective moral damages (dano moral coletivo), 235 fines against Walmart and supermarkets in Chile, 173, 182, 245 fines and damages against Walmart, 248 fines and damages against Walmart competitors, 271 individual claims, 67, 68, 117, 118 individual claims against Walmart in Mexico, 243 intimate and intrusive bodily searches, 244 judicialization of claims-making, 67 obstacles to individual claims under 2017 labor reform, 209 psychological harassment (assédio moral ) as motive, 113, 121, 244 rest breaks as motive, 121, 126 searches of employee belongings as a motive, 124 timekeeping (registro de ponto) deficiencies fueling wages and hours claims, 241 Lemos, Patrícia Rocha, 215, 241–245 Limeiras, São Paulo, 113, 136, 142

299

Lockouts as legal tactic in Chile, 171 logistics, 2, 23, 41, 45, 51, 52, 56, 64, 70, 71, 90, 91, 175, 184, 269, 271 Lojas Americanas, 50, 52 López Obrador, Andrés Manuel, 192 Los Cabos (Mexico), 189 Lula da Silva, Luis Inácio Imprisonment and release as ex-president, 205 Labor reforms and their limits as president, 2, 82–83, 95, 99–103, 167–169 M Mahoney, James, 19, 21, 22, 33 management culture, 83 manufacturing, xvi, 14, 33, 56, 64, 66, 93, 131, 136, 138, 188. See also multinational corporations (MNCs) market destabilization hypothesis, 17–18, 40, 54, 266 profit margins and scale economies, 18, 267 market entry, 43, 90, 152, 158, 173, 184 greenfield versus acquisition versus joint venture as mode, 158 timing, 152 market reform. See neoliberalism McMillon, Doug, 250, 270, 271 CEO of Walmart, 250 CEO of Walmart International, 250, 270 mergers and acquisitions, 42. See also retail markets methodology. See also case study method; comparative method cluster analysis, 188 ethnography, 26, 61, 138, 179, 196

300

INDEX

mixed methods, 68 most similar systems research design, 8 participant observation, 164 Metro Cash & Carry, 269, 270, 276, 279. See also multinational corporations (MNCs) Mexico child labor, 167, 168, 193 flexible labor institutions, 6 labor courts in, 21 labor inspectors in, 126 protection contracts (contratos de protección), 21, 30, 54, 69, 157, 162, 186, 189 recent reforms in labor relations institutions, 187, 191, 194 sales per worker by supermarket firms compared, 188 Walmart in, xiv, 126, 168, 185, 191, 194, 239 Meyers, Haley, 43 military regime, 27. See also authoritarian regime in Brazil, 27 in Chile, 27 Ministério Público do Trabalho (MPT). See labor inspectors moral damages (danos morais ), 244 individual, 114, 120, 121, 127, 231, 233, 240. See also repressive familialism collective, 235–237 most similar systems research design, 8 multinational corporations (MNCs). See also individual companies “Brazilianization” of, 267 ethnocentrism in corporate strategy, 62 foreign direct investment (FDI), 2, 14 France as home country, xvi, 12

global diffusion as strategy, 12, 265 global strategies as shaped by home country, 4–5, 9, 12, 28–29, 43, 46, 49, 53, 62, 87, 127, 132, 134, 149, 153, 259, 265 home countries, influence on strategies of, 107 home office-subsidiary relations, 267 host countries of, 265 host countries, relations with, 16 host countries, strategies toward, 12, 265 hybridization of host- and home-country practices, 17 manufacturing, 14 market destabilization, 18 market-seeking foreign direct investment, 14 national adaptation as challenge, 16 national adaptation (localization) as strategy, 3 pricing practices, 16 retail sector in, 12, 16 services, 14, 107 United States as home country, xiii N neoliberalism, 178 neoliberal economic reform, 182, 183 Non-governmental organizations (NGOs), xiii, xiv, 27, 55, 91, 152, 167, 168 North American Free Trade Agreement (NAFTA), 42, 184, 192. See also United States-Mexico-Canada Agreement (USMCA) Northeast region, Brazil, 264 Nova Central Sindical de Trabalhadores (NCST) labor center, 103

INDEX

Novo Mercado segment of Brazilian stock exchange, 266 Nuñez, Héctor, 268, 284, 285. See also Chief executive officer (CEO) O occupational trajectories, 206 office boys, 136, 226 Oligopoly, 52 Omnichannel as retail concept, 277 at Walmart Chile, 177 at Walmart globally, 277 Organización de Trabajadores de Walmart (Mexico), 189 Osasco, São Paulo collective bargaining, 55, 58, 64, 65, 135, 224 commercial workers’ union of (Sindicato dos Comerciários de Osasco e Região-SECOR), 58, 65, 114, 143, 215, 222, 231, 280 disputes over Sunday and holiday work, 67 outsourcing outsourcing law of 2017, Brazil (Law 13.429), 210 P Paraná, State of, 51, 129, 246 Pará, State of, 243 parking attendants, 168 Partido dos Trabalhadores (PT), 86, 92, 94, 96, 99, 102, 209, 210 part-time work. See also flexibility of work; precarious work intermittent (zero hours) contracts, 21, 220, 223, 228 part-time contracts pre-2017, 71, 224, 227

301

varieties of part-time contracts post-2017, 223 Patah, Ricardo, 218. See also SEC-SP (Sindicato de Empregados do Comércio-São Paulo) Peronism, 177 Piore, Michael S., 172, 173, 180, 190 political regimes democratization, 20 post-authoritarian, 20 transitional, 152 Porto Alegre, Commercial workers’ union of, 233 poverty, 86, 134, 140, 225 near-poor or vulnerable status of Brazilian supermarket workers, 134 power resources. See unions precarious work as low-wage, low-skilled, 171, 281 in global retail, 23, 206 in supermarkets, 31 professionalization of labor inspectors, 118, 181 of labor prosecutors, 180 profit sharing. See results and profit sharing protection contracts (contratos de protección) as functional equivalent of nonunion shop in United States, 157 atomization of workers, 187 debate about concept in Mexico, 157 definition, 157 Proyecto de Derechos Económicos, Sociales y Culturales (ProDESC), xv, 167 psychological harassment (assédio moral ), 113, 120–123, 126, 127, 135, 169, 183, 240, 244,

302

INDEX

271. See also legal claims-making; repressive familialism Puerto Rico, 41–43, 46, 50 R Racial discrimination, 128 Relação Anual de Informações Sociais (RAIS), 130, 131 repressive familialism. See also Walmart contested by workers, 29 defined as type of workplace authority regime, 4, 13, 153, 158 punishments and rewards within, 5 remaking of worker subjectivities, x, 28 See also Walmart, anti-unionism; code of ethics; customer service orientation; tenfoot-rule (three-meter rule); Walmart cheer; “Walmart culture”/”Walmart way” reputation management, 91. See also Corporate social responsibility (CSR); risk management research design. See most similar systems research design research methodology cross-national comparison, 5 diachronic analysis, 3 longitudinal analysis, 3 most similar systems, 8 results and profit sharing Brazilian laws and regulations, 8 competing union visions, 107–108, 202, 212–213 conflict over issue in Mexico, 82 negotiations at Walmart Brazil, 82, 138, 217 union approaches to, 104–108 retail markets in developing countries, 44, 281

market share as corporate goals, 51 market shares by company, 40, 51 maturity of, 42–45, 272 top 20 market shares, 212, 267 Reuters, 34, 119, 140, 143, 198, 210, 241, 250, 251, 253, 254, 257, 284, 285, 287 right to work states, 156, 184. See also anti-unionism; Taft-Hartley Act Rio Grande do Sul, 87, 118, 236, 237 risk management, 91. See also corporate social responsibility (CSR); reputation management Rousseff, Dilma, 94, 206 Royal Ahold, 43

S Sam’s Club. See Walmart São Paulo, Brazil city of, 58, 59, 66, 72, 73, 87, 113, 114, 225, 226, 241 metropolitan area, 51 state of, 72, 118 scheduling hours bank system, 134 legal claims related to, 171, 224, 228 overtime, 96, 135, 227 Sunday and holiday work, 60 work shifts, 61 Schrank, Andrew, xviii, 172, 173, 180, 190 Sears, Roebuck & Co., 184 SECOR (Sindicato de Comerciarários de Osasco e Região), 58, 65, 66, 113, 114, 142, 143, 231, 256, 257, 280, 287. See also collective action; Osasco, São Paulo; strikes as member union of CONTRACS confederation and CUT labor center, 56, 65, 215

INDEX

collective bargaining agreements with supermarkets, 67 SEC-SP (Sindicato de Empregados do Comércio-São Paulo), 218, 225 collective bargaining agreements, 64, 213 Securities and Exchange Commission (SEC), 185, 252 seniority as contraposed to external and horizontal flexibility, 221 as principle guiding pay and promotions, 163 escalafón ciego in Mexico, 159 service contribution fees (contribuição assistencial ) repurposing as negotiating fee payable by workers to fund unions, 232 traditional purpose of, 232 service sector, 56 Servicio de Conciliación Laboral Obligatoria (Argentina), 183 7-Eleven, 42. See also multinational corporations (MNCs) severance accounts, 133, 221, 222, 256. See also Fundo de Garantia de Tempo de Serviço (FGTS) severance accounts non-statutory severance payments, 126, 233 shop floor as focal point of labor-management relations and conflict, 153 as level of worker activism, 179 Sindicato de Empleados de Comercio Lanús y Avellanda (SECLA), 160, 179 Sindicato Interempresa Líder (SIL), 174–176 Sindicatos de empleados de comercio (SECs), 159, 178, 179

303

SINECOVEL union of vehicle dealership workers in Osasco, 231 SMU S.A. (Chile), 159 social dialogue, xiv, 85, 106–108, 115, 214, 241. See also results and profit sharing Socialist Party governments, Chile, 168 SONAE, Grupo, 269, 278 Sorocaba metro area, 73 South Africa, 49, 91, 133, 144, 225, 276 South region of Brazil, 85, 105, 110, 112, 115, 236–223, 274 Southeast region of Brazil, 51 South Korea, 44–46, 49, 72, 266, 272, 277 Sparks, Leigh, 40, 41, 43–46, 72 state-owned enterprises (SOEs), 90 state regulators of labor and work. See also individual countries labor courts and judges, 5, 15 labor inspectors, 5, 8–9, 11, 12, 24, 26, 34, 26, 67–69, 81, 83, 90, 96, 98, 113, 118, 122–123, 127, 136, 168, 177–180, 185–186, 190, 241–243 labor ministries. See Labor Ministry stockers, 224 store closures multiple closures announced in 2013, 210 multiple closures announced in 2015/2016, xvi, 221 trends over time, 170 stress in workplace, 206 strikes. See also collective action authorization votes and threats of, 174 classification of, 6, 109, 112 general strikes, 66

304

INDEX

tendencies over time among commercial workers, 66 ways of measuring strike activity, 111, 192, 213 subcontracting, 31, 124, 126, 133, 236, 240. See also outsourcing Supercenters. See Walmart Superintendencia de Riesgos del Trabajo (Argentina), 182. See also labor inspection supermarkets as big-box retail, 29 as global industry, 4–5, 7, 14, 16, 24, 26, 40–44, 272 as national sector, 17–18, 21, 28, 49–53, 129, 131, 133–134, 136, 148, 155, 164, 166–167, 175, 180, 183–184. See 190, 202–203, 208–209, 223–224, 235, 264–265, 275 as part of globalization of retail, 40 pricing models in, 2, 9, 16, 32, 41, 45, 52, 88, 137, 180, 244, 259, 266, 266, 268, 270 revolution in the global South, 40, 277 supplier relations practices, 2 Supermercado Condor, 246 Supermercados Coto, S.A. (Argentina), 179 supplier relations. See supply chain management supply chain management, 90. See also Walmart supreme court of Mexico, 190 Supremo Tribunal Federal (STF) in Brazil, 229 surveillance as source of workplace abuses and legal violations, 24

use of ex-military officers as security guards and managers, 161 Walmart systems for employees and workplaces, 2, 4, 26–27, 134–136, 157, 161, 175, 239–240, 242

T Taft-Hartley Act, 153. See also right to work states technological change Automation, 1, 5, 172 self-checkout, 176 self-scanning, 176 training, 175 Temer, Michel, 208–210, 234 temporary work. See also atypical contracts expansion with 2017 Brazilian labor reform, 206, 236 in Walmart Argentina, 180 in Walmart Brazil, 114 in Walmart Mexico (eventuales), 31 temp agencies and agency labor, 181, 210 Tesco PLC, 42, 44. See also multinational corporations (MNCs) Thelen, Kathleen, viii, 19, 21, 22, 33 Tilly, Chris, xviii, xix, 23, 28–31, 83, 126, 131, 137, 153, 156–158, 162–165, 169, 178, 186–189, 225 transnational corporations (TNCs), 42, 43, 141. See also multinational corporations (MNCs) contrasted with multinational corporations, 55 transnationality index, 43 transnational labor networks, 83. See also unions

INDEX

Tribunal Regional do Trabalho (TRT), 120, 121, 124, 231, 233, 236, 239 Tribunal Superior do Trabalho (TST), 57, 97, 119, 120, 124, 135, 233–235, 238, 239, 242, 243, 245 Trius, Vicente, 267. See also Chief executive officer (CEO) turnover of workers data at Walmart, 86, 221 data in commerce, 132 data in retail, 132 U Uber, 283 Ultractividad principle, 177 automatic renewal of social clauses in Argentine collective bargaining, 177 Ultratividade principle, 217 renewal of social clauses in Brazilian collective bargaining, 217 unemployment national unemployment rates, 67 restructuring and workforce reductions, 133, 248 unemployment insurance, 113, 134, 218, 221, 245 União Geral dos Trabalhadores (UGT), 58, 73, 103, 104, 109, 113–116, 141, 142, 215, 225, 227 union avoidance. See labor relations (LR)/human resource management (HRM) union-busting, 153. See also union avoidance; union substitution as distinct from other forms of anti-unionism, 153 union avoidance strategies, 153 union substitution strategies, 15

305

unionization monopoly of representation with voluntary membership in Brazil, 54 selective incentives to recruit members, 226 union density versus collective bargaining coverage as indicators, 29 voluntary membership and multiple unions per workplace in Chile, 159 Union Network International (UNI Global Union), 114, 180 Americas division, 216 unions anti-union behavior (conduta anti-sindical ) as focus of collective claims, 241 assemblies as decision-making bodies, 160 assistencialismo (welfarism), 59, 231 associational power, 7, 24, 56, 84, 85, 93, 112, 131, 138, 183, 193 autonomy from states and dominant labor centers, 174 benefits, social versus fringe, 59 breakaway movements, 173 business unionism, 178, 179 center-left bloc of commercial workers’ unions, 217 center-right bloc of commercial workers’ unions, 215 centralization and decentralization of authority and bargaining, 15 chemical workers’, 103 collection action and protest, 112 combativeness, 233 commissions of delegates, Argentina, 160

306

INDEX

conservative unionism, 17, 30, 108, 112, 135, 155, 194 electricity workers, 103 financing through service fees (contribuicao assistencial ), 231 financing through union tax, 60 governance of, 9, 219 job control as aspect of collective bargaining strategy, 227 labor centers, xiii, 56, 92 monopoly of representation (unicidade sindical ), 54, 94, 102, 188 national sectoral confederations, 85, 104, 159 of commercial workers, 23, 54, 56, 66, 70, 99, 104, 112, 113, 115, 117, 213, 220, 225, 231 petroleum workers, 106 power resources, 154 state sectoral federations, 85 strikes, 113, 114, 162 structural power, 183 survival strategies faced with loss of union tax revenues post-2017, 225–229 union density, 55, 57, 72, 177 “unionism of results” , 58 unionization, 2, 16, 26, 29, 54, 58, 104, 153, 159, 169, 172, 187, 189, 220, 229 union leader job security, 174 union strategies, 115, 222 workplace representation/union delegates, 55, 61, 85, 93 union substitution. See labor relations (LR)/human resource management (HRM) union tax. See also unions abolition in 2017 labor reform, 229 dues checkoff, 231

efforts to find successor mechanism, 225–229 transaction costs and free rider problems in finding voluntary alternatives to, 230 United Nations Conference on Trade and Development (UNCTAD), 42, 43, 48. See also transnationality index United States-Mexico-Canada Agreement (USMCA), 192 United States (US) distinctive national business institutions, 41, 43, 51, 57, 149, 153, 180, 226, 259, 270–271 distinctive national labor institutions, 15 Walmart labor practices in, xiii, 5, 184 V varieties of capitalism coordinated, 22, 275 hierarchical, 276 liberal market economies and Walmart business model, 275, 276 socio-developmental capitalism, 276 vendors, 113, 124, 136, 222, 276 Visser, Jeller, 112, 173 W wage and incomes policy minimum wage trends, 59, 69, 71, 74, 87, 102, 112, 133, 171, 192, 223, 227 wage categories in collective bargaining expressed in reference to, 71 wages. See collective bargaining Walmart

INDEX

class position of Walmart Brazil workers as “vulnerable” or “near poor”, 131. See also individual countries and world regions; repressive familialism anti-unionism as doctrine, 4 anti-unionism as practices, vii, xvii, 5, 28, 32, 156, 160, 165, 273 anti-union toolkit and manual, 26, 165 apprentices, 224, 225 Arkansas roots, 2, 156 as world’s largest corporation, 42, 43 Bentonville headquarters, 267 brittleness of business model overseas, 266 business culture (organizational culture), 40 charges against global profits tied to Brazil, 119 code of ethics, 4, 273 coercion, 20 competitive performance and decline, 9, 264, 265, 268, 276 competitive strategy, 7, 12, 28 contract types, 31 core business model, 40 corporate relocation to south of Brazil, 278 corporate social responsibility (CSR) practices, 84, 91 cost-cutting incentives facing store unit managers, 139, 271 country exits, 3, 272 customer service orientation, 52, 123, 273 earnings calls with investors, 6, 249, 269 employment claims in Brazil as cause of profit write-downs by, 249, 265

307

ethnocentrism as Americanization, 62 ethnocentrism in corporate strategy, 62, 70 everyday low prices (EDLP) model, 3, 52, 90, 265, 270, 285 exercise of power, 13, 124 global diffusion, 3, 12, 265 global expansion, 3, 12, 40, 41, 43, 53, 87, 152, 157, 265, 283 global supplier code of conduct, 91 home office as source of international problems, 46 imperviousness to outside research, 6, 60 institution taker versus institution shaper or maker, ix, 18 Instituto Walmart, 91 interplay between store managers and corporate human resource, 139 intimidation of workers, 159 Líder brand in Chile, 174 logistics practices of managers, 16 neighborhood markets, 181, 197, 269 open door policy, ix, 155, 165, 166, 174, 179 paternalism and carrot and stick incentives, 165 performance metrics, 211, 268 policy of guidance for improvement (política de orientação para melhoria-POM) as locus of disputes over unjust dismissal, 244, 280 predatory pricing, 272 producers’ club, 91 profitability, 8, 44, 51, 211, 265, 275

308

INDEX

protest letter against October 2013 layoffs, 216 pushback and resistance to, 12, 52 repressive familialism as workplace authority regime, vii, 4, 27, 28, 153, 158 resistance by regulators, ix resistance by workers, ix Sam’s Club stores, 42, 65, 117, 251, 253 Sam Walton as founder, vii, 2, 24, 33, 49, 153, 184, 273, 286 smiling within ten-feet (three-meter) rule, 3, 70, 120 store formats, 18, 250 store geographic locations, 108 strategic review of Walmart International operations, 211 supercenter stores, 65 supplier relations, 2, 18, 32, 41, 53, 70, 184, 275 ten-foot-rule (three-meter rule), 70 tensions between goal of corporate human resources and store unit managers, xvi Walmart as fictive family, 24 Walmart Brazil chief executive officers, 267, 274 Walmart cheer, 4, 61, 70, 73, 83, 121, 139, 158, 166, 179, 243, 248, 273 “Walmart culture”/”Walmart way”, 4, 13, 62, 121, 153, 186 Walmart effect, 12, 188 Walmart International, 46, 49, 119, 125, 177, 210, 211, 249–251, 267, 276 Walmartization, 12 waves of global expansion, 43 workers as associates, 25, 70, 166, 235

Walmart de México (Walmex), 184, 187, 192 Walmart workers’ network of Brazil, 114 of UNI Global Union, 70, 114, 115, 175, 180, 273 protest letter against October 2013 layoffs, 115 Walmart Workers Council, Chile, 174, 175 Walton, Sam. See Walmart warehouse workers, 175 Western Europe, 42. See also European Union (EU); individual countries wholesale stores, 270 Woolworth’s, 41 worker representation in workplace, 93 works councils, 93 worker turnover annual rates at Walmart Brazil, 139 attrition, 218 involuntary versus voluntary, 82 trends in Brazilian supermarkets and hypermarkets over time, 213 with and without cause (com and sem justa causa), 221 workforce reductions in Argentina, 180 in Brazil, 9, 23 in Chile, 155, 172 worker transfers and retraining, 171, 214, 217 working hours bathroom breaks, 126 employer scheduling practices, 31 excessive overtime, 64, 114 flextime under 2017 Brazilian labor reform, 206 hours bank, 31, 135

INDEX

hours offsetting (compensação de jornada) clauses in collective bargaining agreements, 222 hours offsetting (compensação de jornada) provisions under 2017 labor reform, 222 reduced time work schedules, 225 required shorts between shifts, 126 rest breaks, 121, 126, 220, 237 short-hours works in United States, 225 “Spanish workweek” (jornada espanhola), 225 statutory workweek, 85 Sunday and holiday work in retail, 60 12 X 36 hours work schedules, 224, 225 underpayment of overtime work, 135, 170. See also flexibility of work workplace. See also shop floor as level of analysis, 24, 32, 84 as level of worker and union organization, 159 as site of social relations and locus of labor contestation, 4, 13–15, 20–21, 24–27

309

workplace authority regime, 4, 13, 153, 165, 244. See also repressive familialism workplace culture, 5, 34, 70, 83, 116, 136, 162, 165, 169, 170, 194 workplace health and safety, 25. See also Comissao interna de prevenção de acidentes (CIPA) fines for work accidents in Mexico, 244 violations by supermarket chain in Brazil, 27 worker-management committees, 60 work rules, 4, 161, 163, 175, 273, 280 Conflicts over, 4, 157, 159, 171, 269, 276 Reglamento interior del trabajo in Mexico, 163 works councils, 70, 93, 107, 273. See also unions Wrigley, Neil, 16, 18, 28, 30, 44, 48, 72, 83, 157

Z Zero-hours contracts. See intermittent work