Target purchased the rights to Zellers’ leases earlier this year for almost $2 billion, and announced with great fanfare that it was coming to conquer the Canadian retail industry. I’ve never been to a Target, or a Wal-Mart for that matter, so I could really care less. Wal-Mart, Target… all the same to me. Discount retail stores that earn billions of dollars in profits by driving down prices they pay suppliers and the wages they pay their own employees.
But we’ve been talking about Target around my house lately because my lovely spouse is representing a Canadian company called Target Apparel in a big battle over trademarks. American Target has sued the Canadian Target Apparel, claiming it is the only company on the planet permitted to use the word Target in their name, even though Canadian Target Apparel has owned the brand for decades and American Target just announced this year that they were coming to Canada in 3 more years! Go Canada, Go little Target Apparel!
But I digress. Target purchased the lease rights to 220 Zellers stores, but it does not need to keep them all. It was given a few months to choose which stores it wanted. It says it wants between 100-150 of the stores to convert to Target. Interestingly, 15 of those Zellers stores are unionized. Over 1500 Zellers’ employees at 15 stores in B.C., Ontario, and Quebec are covered by collective agreements with the United Food and Commercial Workers, according to the union.
The question is, is there a chance in hell that those 15 stores will be among the chosen ones when Target announces which leases it’s taking?
When a company purchases a unionized business, it inherits the employees and any collective agreement that governed them. That is governed by the sale of business provisions in labour relations legislation, such as section 69 of the Ontario Labour Relations Act. The definition of “sale” is very broad, and includes a transfer by way of a lease exchange, which is what appears to be happening between Target and Zellers. That means that if Target takes the lease on one of the unionized Zellers’ stores, it will be bound by the collective agreement with the UFCW. However, if Target does not take the unionized Zellers, it will not have legal responsibility for the employees there or the collective agreements. HBC, which owns Zellers, says it may keep some of the stores not purchased by Target open under the Zellers banner, for a while.
Like Wal-Mart, Target is fiercely anti-union. It has over 1400 U.S. stories, and not one is unionized, according to the NGO CorpWatch. Like Wal-Mart, Target pays minimum wage or slightly above, yet earns billions of dollars in annual profits. This is not a high-end employer.
Wal-Mart came to Canada in 1994 in a similar way. It purchased 122 of 144 Woolco stores. Of the 22 stores it did not purchase were the only 10 unionized stores.
So, does anyone want to put some money down on whether the unionized Zellers will be picked up by Target?
If you have insight into this, please pass it along by leaving a comment.