REI’s Union Worker Push For Spots On The Co-Op’s Board

The out of doors retailer REI needs you to comprehend it isn’t a typical company — it’s a consumer-owned cooperative, with values beyond just making money. Lest you overlook, REI places “co-op” on its retailer indicators. It sells “co-op”-branded bikes, sleeping luggage and bear cans. And it invitations you, the cooperative member, to vote in its board of administrators election yearly to “set the direction of the co-op.”

But when the members don’t like the place REI is headed, how a lot energy do they really have to alter course?

A union for REI employees needs to search out out.

The United Meals and Business Employees union is selling two pro-labor candidates for the poll in REI’s board elections slated for March. The UFCW and its sister union, the Retail, Wholesale and Division Retailer Union, have organized 11 of REI’s roughly 190 shops since 2022 in a office battle that’s prompted union-busting allegations and shaken the company’s progressive reputation.

Although anybody can nominate themselves to serve on the retailer’s board, that doesn’t imply their title will find yourself on the poll. The ultimate candidates are chosen by the board’s “nominating and governance committee,” which finally supplies members a menu of potential administrators to select from.

In different phrases, the REI board decides who can sit on the REI board. And that’s a giant drawback for employees like Sue Cottrell, who believes the corporate has strayed from its roots. She needs new board members who will deliver contemporary views and average REI’s opposition to the union marketing campaign underneath its outgoing chief govt, Eric Artz, who’s anticipated to retire in March.

“We don’t actually have a voice in who will get to be on the board — the individuals who find yourself on the poll have been chosen by the present board,” stated Cottrell, a 70-year-old worker at REI’s retailer in Bellingham, Washington. “They’re cherry-picking who they need.”

Final 12 months, union supporters urged co-op members to forgo backing any specific candidate and vote “withhold” in protest of the method. This time, they’re stumping for 2 names to make their means onto the poll.

One, Shemona Moreno, is the director of the local weather advocacy group 350 Seattle, based mostly proper in REI’s yard. The opposite, Tefere Gebre, is the chief program officer at Greenpeace and a labor chief who beforehand served because the AFL-CIO labor federation’s govt vice chairman.

Each are explicitly working to affect the corporate’s place on unionization and dealing situations. No matter their {qualifications}, they are going to want the blessing of the board’s nominating committee, which is why the UFCW is selling their candidacies and asking backers to signal petitions in help. The union hopes a robust present of help from co-op members might pressure the board’s hand and get one or each on the poll.

Moreno stated she’s stored an in depth eye on the union effort, wherein employees have filed unfair labor practices accusing REI of breaking the legislation. She advised HuffPost the corporate is due for some soul-searching and hopes a board problem will induce it.

“You’ll want to actually, actually re-evaluate the values of what having a co-op means and just remember to stay these values,” stated Moreno, whose group has turned out in help of the REI union at protests. “When you’re gonna say it, then it’s essential to stay it.”

Gebre stated his aim isn’t to create “havoc” however to deliver a brand new viewpoint.

“In numerous boardrooms … employees are seen as an expense as a substitute of as an asset,” stated Gebre, who fled violence in Ethiopia as a toddler and later rose through the ranks of U.S. organized labor. “You want somebody within the boardroom to take the us-versus-them perspective out of it. As a result of proper now … REI already is at conflict with its workers.”

REI denies it’s damaged the legislation and says workers are free to prepare. Though not one of the unionized shops have achieved a collective bargaining settlement, REI insists it’s negotiating in good religion. The corporate is represented by Morgan Lewis, the identical administration legislation agency whose attorneys are arguing on behalf of SpaceX that the federal labor board is unconstitutional.

An REI spokesperson stated the corporate’s board weighs “a number of components” to establish the perfect candidates however considers “distinctive enterprise judgment and decision-making expertise” to be important. It additionally expects board members to be “in the beginning co-op members.” Gebre stated he grew to become an REI member final 12 months, and that his spouse has been a member since 2001. Moreno stated she’s been a member since 2016.

“We search for candidates with confirmed enterprise acumen and related expertise working in organizations of comparable dimension and scale to REI; a demonstrated historical past of innovation and disruption, significantly within the retail business; and the talents to be an efficient board member,” the REI spokesperson stated in an e-mail.

Requested particularly in regards to the pro-union candidates, the spokesperson stated the board is contemplating Gebre however not Moreno.

The corporate maintains that it didn’t obtain Moreno’s software. Moreno shared with HuffPost a duplicate of her e-mail to the board, along with her software hooked up, dated the morning of Oct. 10, 2024, which was listed because the deadline on the applying kind. When HuffPost shared a screengrab of that e-mail with REI, the corporate nonetheless stated she was not into consideration.

“Sadly, we have now no file of this e-mail,” the spokesperson stated.

Moreno stated greater than 3,000 folks had signed a petition supporting her candidacy.

“The most effective-case situation is somebody didn’t test their spam folder,” she stated of REI. “The worst-case situation is REI is afraid of a pro-staff candidate for [the] board. This isn’t the REI I do know and love. I utilized to run for the board to be a voice for the folks in inexperienced vests who make REI nice however who usually are not allowed a voice on the co-op’s board of administrators.”

REI says its cooperative origins stretch again to 1935, when a bunch of Seattle mountaineers began pooling their cash to get their fingers on costly climbing axes. Lifetime membership again then price $1; at the moment it’s $30 and comes with a ten% reward on purchases on the finish of the 12 months, for use as an REI low cost.

Allegations that REI is now not a co-op in spirit predate the union marketing campaign by a minimum of a few a long time. A 2003 Seattle Weekly story portrayed a profit-driven and opaque company that wouldn’t disclose its then-chief govt’s compensation. “Who Owns REI?” the story requested. “It might probably’t be the members.” (REI now makes govt pay public. Artz made $2.7 million in 2023 and topped $4 million in earlier years.)

The board of administrators has been central to those critiques, since its gatekeeping powers could make it tough for dissenting voices to mount a problem to management and push for change. It was {that a} candidate might bypass the board’s nominating committee by gathering signatures from 1% of REI’s membership, however that provision now not seems within the co-op’s bylaws. (The REI spokesperson stated no board members had been obtainable for an interview.)

Larry Cunningham, director of the College of Delaware’s Weinberg Heart for Company Governance, stated board nominating committees are a typical characteristic at public firms as nicely. However not like with a public firm, there is no such thing as a clear route at REI for a board proxy combat, a well-established course of wherein dissidents can attempt to oust sitting board members.

In different phrases, don’t assume it’s simple to carry administrators accountable simply because it’s a co-op.

“There’s no mechanism on this doc or on this tradition that’s just like the proxy contest. That’s the large distinction,” stated Cunningham, who reviewed REI’s bylaws at HuffPost’s request. “The general public firm path may be very extremely regulated; folks know the principles of the street. Right here, they should go grassroots, and there’s no roadmap.”

Whereas public firms are specific about maximizing worth for shareholders, the mission at REI is a little bit squishier. Beneath a bit outlining the co-op’s ideas, REI’s bylaws give a nod to fostering environmental stewardship, being a “accountable” company citizen and sustaining an “glorious office.”

But no such language is discovered within the part outlining what the nominating committee’s issues needs to be for would-be administrators. It merely promotes a view towards “depth of expertise and variety.”

Cunningham referred to as this battle “a defect within the doc” that muddies the board’s mission.

“Somebody ought to repair the way in which these bylaws are learn,” he stated.

REI’s board is heavy on govt administration expertise. Its present chair, Chris Carr, is the previous chief working officer of the fast-casual salad chain Sweetgreen and a former Starbucks govt. The chair of its nominating committee, Ted Philip, is a former Walt Disney Co. govt who additionally sits on United Airways’ board.

REI administrators are paid $125,000 a year, with a further $25,000 to $50,000 for these serving as chairs. REI says that compensation is important to draw expertise however nonetheless “under the median for comparable firms.”

It appears REI’s board wasn’t all the time so chock filled with MBAs. A 1993 Seattle Instances article stated the corporate’s administrators included an area emergency room nurse, an Alaska-based climbing information and an Idaho “civic activist,” amongst others. The pay again then was nothing like at the moment. In 1996, REI members narrowly rejected a proposal to hike director compensation — voting to maintain it at simply $3,832 a 12 months. Vital pay hikes got here later.

The REI board holds a gathering each spring the place the administrators reply questions and replace members on the corporate’s form. Members can petition to place proposals on the agenda for a member vote, which, in idea, may very well be a stress level on unionization. However there’s a catch: A 3rd of the board should conform to put stated measure on the assembly’s poll.

That bottleneck makes it more durable to carry the board accountable, stated Blair Orr, an REI member since 1972. Orr is a retired professor of forest economics in Michigan who’s been concerned in varied co-ops over time. He determined to take an in depth take a look at REI’s bylaws after studying in regards to the organizing marketing campaign.

“You take a look at the REI construction and there’s no option to immediately have an effect,” Orr asserted. “The whole lot must be permitted by the board of administrators.”

He wonders if it’s time REI stops carrying on as a co-op, turns into a public firm and begins issuing inventory.

“When you’re going to level to it,” he stated of the co-op standing, “then you definitely should stay by it.”