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Bloomingdale’s Workers Demand End to Exploitative Commissions

April 20, 2017 
By Steven Wishnia

New York, NY - Carrying signs reading “Good Wages and Benefits Are Always in Style” in Bloomingdale’s “big brown bag” font, more than 250 people turned out for a lunch-hour rally outside the department store April 18, supporting the workers there demanding a fair contract.

“Do not discount your workers. Do not put your employees on the clearance rack,” Retail, Wholesale, and Department Store Union President Stuart Appelbaum declared. “What happens here at Bloomingdale’s matters for the future of the retail industry.” 

The contract covering about 2,000 workers expires May 1. The union, RWDSU Local 3 President Cassandra Berrocal told the crowd, wants a raise to “a real living wage,” and for Bloomingdale’s to begin giving salespeople commissions for online sales and stop deducting from their commissions retroactively if customers return items. Management hasn’t discussed those proposals, she added.

Company proposals made March 29 include discontinuing workers’ pensions and switching them to a 401(k)-style retirement-savings plan; ending its 9% of payroll contribution to the union’s health plan and sick-day fund; and to stop giving employees compensatory days off for working on holidays. Others are couched in blander language, such as “modifying current layoff and placement procedures,” “identifying going-forward opportunities for associates who aren’t appropriately talent-matched,” and seeking “greater flexibility to increase customer expectations by amending the straight commission staffing language.”

Those latter proposals, Berrocal said, translate as getting rid of seniority, making it easier to fire workers, and letting management “flood the floor with employees” in departments where they work strictly on commission. 

“Their demands go beyond regular demands. They want to break the very core of the union,” says Local 3 negotiator Allen Mayne. “Retail is very tough these days, but we’re talking about Bloomingdale’s flagship store.”

The “draw vs. commission” system for salespeople is “the one that’s hurting us the most,” says Mayne. In many departments, salespeople do not receive base wages. Instead, they get a “draw,” an advance based on what they are supposed to sell. If they sell more than that amount, they get a commission. If they don’t, they’re “in deficit,” and won’t get any commissions until they sell enough to clear that deficit.

That means, said a salesperson who asked not to be identified, that if you spend time with a customer who doesn’t buy anything, not only do you get nothing, but you lose time you need to make sales to cover your draw.

That system was introduced in 1989 as a benefit, says Mayne, but that was before online shopping—back when “people didn’t use the store as a showroom.”

If management is able to “flood the floor” with draw-vs.-commission” salespeople, Berrocal explains, it won’t cost the company anything in wages, but the number of salespeople competing for customers will greatly increase—much like how Uber floods the streets with cabs competing for the same fares, but doesn’t have to pay them if they can’t make any money. 

Two related issues are commissions for online sales and returned items. Bloomingdale’s encourages customers to buy online, salespeople say, but that means they don’t get a commission—even if the customer looked at the item in the store and then used their phone to buy it. “How fair is that?” Berrocal asks. Local 3 put the issue on the table in the 2012 contract talks, she adds, but the company refused to go for it.

If a customer returns something they bought, the company takes back the salesperson’s commission on it. “You could spend hours with a customer selling a piece, but if the diamond falls out because it was improperly set, it comes out of your paycheck,” a jewelry salesperson who did not want to give her name told LaborPress. “You could have nothing at the end of the week.”

Several elected officials came out to support the union, including state Senators Diane Savino (IDC-Staten Island) and Jeffrey Klein (IDC-Bronx); Assemblymembers Richard Gottfried (D-Manhattan) and Michael Blake (D-Bronx); and City Councilmembers Carlos Menchaca (D-Brooklyn), Julissa Ferreras (D-Queens), and Corey Johnson and Bill Perkins of Manhattan. New York State AFL-CIO head Mario Cilento, several Local 3 members, and various United Food and Commercial Workers also spoke.

Bloomingdale’s has been a union shop for 80 years. Workers organized Local 3 in 1937, and won their first contract in 1938. “We’ve been able to negotiate good healthy contracts,” says Berrocal, noting that there have only been two strikes in the union’s history, in 1963 and 1965—and the 1963 walkout lasted only 90 minutes. But the union is not negotiating just with the Bloomingdale’s store management, she adds: It’s negotiating with Bloomingdale’s-Macy’s Inc., a nationwide chain that operates more than 700 department stores.

“What we do with this contract will set the stage,” she says. “We’re not here to negotiate away what we have.”

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