Saturday, 23 March 2013

New Low Prices or just New Lows?


Reports that Target is opening nearly two dozen stores in Ontario have come from multiple sources in several mediums. Perhaps the more compelling story, however, is why these media sources choose to provide Target (and Walmart years earlier) with what is essentially free advertising. [1] This is a deceptively important issue. In so widely reporting on the fact that Target is opening new stores the media stands in opposition to the interests of Canadian workers.

Media exposure is directly related to corporate reputation. It has been persuasively argued that “newsworthiness of company activities” is a variable which determines the image and reputation of a corporation. Research on corporate reputation has shown that "... favorable reputations may enable firms to charge premium prices, attract better applicants, enhance their access to capital markets, and attract investors".[2] 

Since media exposure of a corporation’s activities is one factor likely related to the effect and breadth of corporate reputation, in widely reporting on the opening of Target stores, the media is doing Target an invaluable service – enabling it to increase profits and finance operations. These boons are in addition to the obvious and inexplicable advantages of the free advertising Target receives. The danger of this intimate relationship between media exposure and corporate interests is that while the media is busy over-exposing the rather pedestrian event of chain-store openings, the damage these events are having on Canadian workers is being largely under-reported. The price of the media’s service to Target is its disservice to Canadian workers.

Target has been using its acquisition of Zellers’ leasehold interests, pharmacy records and a brand waiver to enter Canada and it does not plan to respect the rights of the workers who’d been employed by Zellers. In fact, Target’s plan has been to fire all of the Zellers workers. The former Zellers workers are guaranteed an interview with Target if they wish to reapply with Target, but there is no guarantee they will be hired. Even if the workers reapply and are hired, the experience and seniority they’d accumulated at Zellers will not be recognized by Target.  

In 2012, UFCW, Local 1518 stepped up to protect its members. The union argued that Target was bound by successor interests under the BC Labour Relations Code and so lacked the capacity to fire Zellers employees. Target successfully challenged the unions’ claims. Since Target did not purchase Zellers proper but only the leasehold interests in Zellers locations, the BCLRB found that Target was not a successor employer. Of vital importance to the Board was the fact that Target’s brand had significant recognition separate from Zellers and did not intend to continue the Zellers model of business:

A significant feature of this case is the enormous amount of evidence led regarding Target's unique position in the retail sector, its marketing strategies and the high amount of consumer recognition of its brand. I find that Target is bringing its own highly successful business to Canada. It did not need Zellers for anything but the lease or the opportunity to negotiate a new lease…Though the employees may perform similar jobs in both stores and the Transaction Agreement confirmed the transfer of leases, pharmacy records and the Brand Waiver, I find those are not sufficient for me to conclude there is a discernible continuity of Zellers' business[3].

Note that one of the factors the Board took into consideration in determining that Target was not a successor employer was the fact that Target has high “consumer recognition of its brand.” As we have seen, media exposure is positively linked to consumer recognition. In giving such intense media exposure to the opening of a US-based chain store in Canada the media is arguably undermining the rights of Canadian workers to the job protections afforded by successor rights.

The media would provide a better service to Canadians if it reported on the more important aspects of Target’s foray into Canadian waters. Such aspects include the fact that thousands of Zellers’ workers across Canada will lose their jobs, their seniority, and the working lives they’d known, some for decades[4]. Target has done an end-run around the successor rights of workers, buying leasehold rights which avoid continuity of business claims by workers. The story behind the story is not that department stores are opening, but rather that thousands of Canadians are being detrimentally impacted by the entrance of these stores into the Canadian market. This is the story the media should be reporting on. As famed Canadian professor of communication theory Marshall McLuhan once stated: the real news is bad news.

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