Arrests not likely to impact Wal-Mart's rep, say experts

BENTONVILLE, AK: The news that illegal immigrants were found working for a Wal-Mart cleaning contractor could give new ammunition to unions trying to organize Wal-Mart employees, say some PR and crisis experts.

BENTONVILLE, AK: The news that illegal immigrants were found working for a Wal-Mart cleaning contractor could give new ammunition to unions trying to organize Wal-Mart employees, say some PR and crisis experts.

"This is a bullet in the gun of any labor union that's going to come after them," said Richard Chernela, a VP with Magnet Communications in New York. "This kind of thing puts Wal-Mart into a category of not being a white knight."

Wal-Mart declined to comment for this piece.

Unions are sure to use the incident when communicating with Wal-Mart employees about organizing themselves, Chernela and others agreed.

This, along with a discrimination lawsuit against the company by female employees, feeds the image that Wal-Mart is insensitive to employee needs, Chernela said.

The incident will do little to hurt Wal-Mart's image with the shopping public, however, assuming there are no further incriminating developments in the case, crisis experts agreed.

Federal agents arrested roughly 250 people at 60 Wal-Marts on October 23. Those arrested worked for a contractor hired to clean Wal-Mart stores.

On Saturday, October 25, Wal-Mart said it would review the status of its 1.1 million US workers and fire any illegal immigrants it found among them. It also said it would cooperate with the federal probe.

"The initial statements I did see from Wal-Mart are the appropriate ones," said Larry Smith, president of the Institute for Crisis Management in Louisville, KY. "It's potentially a one- or two-day story" if no further evidence surfaces that Wal-Mart knowingly hired or used contractors who hired illegal immigrants, he said.

On the labor-relations front, however, "it's certainly a hammer that organizers can use against them down the road," Smith said.

Fred Marx, a partner at Michigan-based Marx Layne & Co. and a retail PR expert, said of Wal-Mart, "Now the burden is on them to make sure it doesn't happen again."

The one raid in October shouldn't hurt, Marx opined. Wal-Mart is "very skilled at deflecting things," he said. "In the grand scheme, this isn't that consequential for Wal-Mart."

Chernela said the retailer should publicly end its relationship with the vendor involved, and also do a complete and public audit of all its vendors' employment practices. "If they are a good corporate citizen, they should care about compliance with the law," he said.

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