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Walgreens Gets Lots of IBEW Business, But Company Spurns Union Construction.

Back in 1997, the IBEW International Office learned of a new distribution center being built in Wisconsin by Walgreens, the giant drug store chain. The electrical work on this project was being performed by none other than Town & Country Electric, the infamous nonunion contractor whose president is head of the leading nonunion contractors association (the Associated Builders and Contractors, or ABC). Town and Country was the firm involved in the famous lawsuit in the mid-1990s in which the IBEW won a unanimous U.S. Supreme Court victory declaring that salting is a legal organizing practice (Worth Our Salt, IBEW Journal, January-February 1996).

Upon hearing of this project, then-International Secretary-Treasurer Edwin D. Hill directed the staff of the Investment Department to conduct an overall analysis of the construction practices of Walgreens Drug Stores. Within a year, the I.O. received calls from around the United States telling of Walgreens construction projects being built with nonunion labor.

Using the IBEW/NECA Investment Tracking System (ITS), the department was able to determine that IBEW/NECA pension funds around the country currently hold 816,570 shares of Walgreens stock worth in excess of $26 million. The staff arranged for local union representatives to attend the Walgreens Annual Stockholders Meetings in 1998 and 1999 to address the concerns of IBEW members.

Through attendance at those meetings and further research, the IBEW became aware of a massive expansion program that Walgreens was and still is undertaking. In the last three years, they have built 1,150 new stores and two new distribution centers worth in excess of $1 billion. They plan on spending $1.4 billion in fiscal 2001, opening at least another 500 new stores.

Efforts have been made at the highest levels of the IBEW to convince Walgreens that the IBEW and organized electrical contractors could provide the skilled workers that they would need on a national basis to carry out their expansion.

The issue of hiring contractors that provide family health coverage with a prescription drug program versus using contractors that do not was one of the major issues discussed with Walgreens. As a result of that discussion, a survey was conducted of the health funds in just the construction branch of the IBEW. The survey, with 83% of the funds reporting, showed that IBEW members had spent $145,528,240 through their benefit programs on prescription drugs in the previous year.

The chart above shows a summary of the survey for the top four companies receiving money from IBEW/NECA Funds. This chart only shows the spending under plans in which the IBEW is a trustee, i.e., Taft-Hartley multiemployer plans covering primarily members in the Construction Branch. Add in the spending by plans administered by companies employing IBEW members in the Utility, Manufacturing, Telecommunications, Railroad, Broadcasting and other branches (for which data were not available), and, in a conservative estimate, the amount is likely more than double.

The Investment Department believes that Walgreens has received well in excess of $20 million in prescription drug money from IBEW construction members through its benefits programs. This information has been given to Walgreens. To date, Walgreens has chosen to continue to award work to nonunion contractors that do not provide health care for their workers, giving them an unfair advantage in competing for bids. As if that were not bad enough, the IBEWs research also indicates that Walgreens and its developers are, in some cases, making concerted efforts to ensure that union contractors are not awarded contracts even when they are the low bidders.

I am very disappointed with the response we have received from Walgreens, then-Secretary-Treasurer Hill told the IBEW/NECA Employee Benefits Conference last November. They seem intent on awarding electrical bids to the absolute low bidder regardless of whether the electrical contractor even provides a family prescription drug plan. I do not believe that we can allow this kind of an attitude to exist. I ask that you look at your prescription drug programs and see who is getting our money and demand that they use our contractors to do their work. I can assure you that I will not sit back and allow companies to reap millions of dollars from our pension and health funds and thumb their noses at us when it comes time to choose who will do their construction work, he continued.

Then-International President J.J. Barry and then-Secretary-Treasurer Hill want IBEW members and their families to be able to make an informed decision on where to spend their union wages and prescription drug benefits.