KMART Employees – A Case

When his position at Kmart’s facility in Fort Wayne, Indiana was terminated LH confronted the challenge of relocating himself and his family. He was re-assigned to the company’s distribution center in Manteno, Illinois, where he began the painful process of starting over. Leaving Indiana was the hardest thing ever done LH recalled, he had to leave his friends, church, son – even his cemetery plot back there. Perhaps more difficult than leaving, though was accepting what he found in his new home.

At first, LH readjusted to his new life and new job. He found an apartment as a temporary residence while he waited for his wife and daughter to join him. Perhaps more important, he made a friend: AP- AP a fellow K-mart employee initiated the friendship by inviting LH and several other K-mart workers to join him for a beer after work. Within months, getting together after work at a near by American Legion Hall become a weekly ritual. AP visited LH at his apartments a couple of times, and even offered to help LH move into a new house.

Then, the local Teamsters Union received an anonymous package containing some disturbing information. The package included invoices and copies of weekly reports that had been prepared for K-mart management by Confidential Investigation Consultants (CICs). According to the Teamsters, the reports covered a wide range of personal information about various K-mart employees, including their dating experiences, drinking habits, and living arrangements. K-mart violated every standard of decency you can think of in spying on these workers’ lives, contended Teamsters President Ron Carey. No employer should be allowed to snoop around in employees’ personal affairs.

Perhaps what hit LH the hardest, though was the AP was identified as one of the undercover investigators hired by Kmart to spy on the activities of employees. They worked together and talked together on the job and stopped off may be once a week to have a beer, LH remarked, “If you asked me if I had made one friend since moving to Illinois, I would have said Al” he recalled. When LH found out he was a company spy, he really felt betrayed, LH recalled. LH was really afraid that he had walked into something too big.

Outraged the Teamsters Union filed a suit on behalf of several employees who worked at the plant that was investigated. The suit charged Kmart with violations of the Illinois privacy law, fraud, deceit, and breach of contract. Kmart spies posed as the workers’ friends while they poked into their private lives and thoughts and even followed them into their homes, charged Carey. Kmart has exploited the workers’ trust and violated their goods faith.

Kmart argued that the spies were hired to investigate a suspected theft ring, which was broken up as a result of the investigation. Nevertheless, the Teamsters believed that the company had gone too far. The kind of information in these reports bears no legitimate business or security concerns for Kmart asserted Phil Snelling a partner at Johnson, Jones & Snelling the law firm that represented the plant workers. They are simply way over the line claiming any kind of business justification for a persuasive spy system.

The Teamsters were also concerned about the timing of the investigation, which took place shortly before their July election that made the Manteno plant Kmart’s first unionized distribution site. Although Kmart denied any relationship between the investigation and the election, Tom Johnson another partner at Johnson, Jones & Snelling , disagreed. This appears to be different from a surveillance program aimed at ferreting out theft, he noted. The reports we’ve seen talk about who was shopping at Kmart and who was shopping at Wal-Mart who was living with whom and who was signing up for a union card.

If companies want to conduct employee surveillance employees, it is essential that they do it correctly. When it’s done correctly it’s a tremendous tool, but it also has its potential for abuse, pointed out Charles Carroll, president of ASET Corp., a vendor of drug investigation an education services. Oftentimes a corporation will call us and there’s a hidden agenda: They want to look at union efforts or troublemakers. Those are the jobs ASET turns down US law strictly prohibits investigating union activities, and companies found to be in violation of this law face serious penalties.

Monitoring workplace activity is not in and of itself illegal, however, Kmart is not alone in its use of spies to investigate employees. Internal investigations using undercover “agents” are widespread among American businesses. A survey by Macworld revealed that approximately 20 million employees surveillance.

Employee surveillance is especially prevalent among retailers whose narrow profit margins can be destroyed by employee theft. According to the National Retail Federation employee theft accounted for an estimated 41 percent of the $27 billion in shortages reported by American retailers in 1992. In a statement Kmart issued in response to the charges against it, the company declared. Theft is a serious problem as it has a direct impact on Kmart’s ability to remain competitive and offer customers merchandise at the best price possible.

Spying on employees has a serious downside, however, aside from Legal complications. Most important is the breakdown of trust. The spy isn’t just watching the guilty employee, the spy is spying on everybody and it’s a massive deceit, said Lew Maltby of the American Civil Liberties Union. Companies have problems, and that is why God invented managers. But any manager who can’t find out what’s going on in the company without hiring spies ought to be fired.

A breakdown of trust within a company can prove far more expensive than any theft ring. Employees may lose faith in both the company and their purpose in it. LH who has worked for the company for 28 years, asserted he feels betrayed by the company and feels that there is no choice but to fight back [in court] . Kmart was wrong to spy on working people who are just trying to feed their families. I was loyal to Kmart, but they weren’t loyal to me.