Employees at Tower Records to Vote on Union

With the Christmas buying season nearly upon them, record retailers would like to be able to keep their focus on the sales numbers for New Edition, Pearl Jam and R.E.M.

But on Oct. 25, many will be watching a quite different kind of tally.

That’s when about 100 employees of Tower Records’ Sunset Boulevard complex--arguably the most famous record store in the world--will vote on whether to align themselves with the Studio Utilities Union Local 724.

The vote will be important to the store and its employees, but some analysts say it also has implications for the beleaguered music retail business. If the union is voted in and accepted by management, the Tower site, which comprises the main store at 8801 Sunset Blvd. and the classical and video outlets across the street, would become the first music retail facility with labor representation.

(Employees at a Tower store in Mountain View, Calif., voted for a union last year, but management refused to recognize it and the matter may have to be resolved in court.)

“You’re dealing with a store that is paid a lot of attention by the industry,” says Gary Arnold, vice president of marketing for the Minneapolis-based Best Buy chain, whose discount music pricing has severely cut into the business of Tower and other music-specific stores. “For those who put unions in place, this is a flagship opportunity because of the statement it makes and the visibility.”

The West Hollywood store is often the site of high-profile album launch events and in-store performances by big-name artists.

For an industry besieged by shrinking profits and increased competition from large discounters and mail-order record clubs, the prospect of a union is alarming to top executives.

Two major U.S. chains, the Torrance-based Wherehouse and Ohio-based Camelot, filed for protection and reorganization in recent months, while the Albany, N.Y.-based Trans World Music Corp. closed 150 stores in 1995 and is in the process of closing 180 more. Minneapolis-based Music-land reported 1995 losses of $136 million and closed 64 stores.

Meanwhile, forecasts are for business to slow between now and 2000 to a growth rate just half what it was in the first half of the decade.

“Probably the last thing the business needs in terms of the contraction of the retail environment is the additional cost of unionization,” says Harold Vogel, entertainment industry analyst at Cowen & Co. in New York. “It can’t be seen as a positive from the business standpoint.”

But the very squeezes on the industry underlie the appeal of unionization, says Local 724 Secretary-Treasurer Frank A. Dickenson.

“There is a changing mood,” he says. “It has to do with cutbacks and take-aways and low wages, the combining of corporations and layoffs.”

Mac Dunlop, one of the vocal pro-union employees, says that low wages and what he calls arbitrary policies led the Tower workers to seek out union representation earlier this year.

“After working here for a year and a half, I’ve already capped off salary-wise at $6 an hour,” says Dunlop, 23, a clerk at the music store. “You have people working here for four years or more still making $6 an hour. And we need some protection to stop selective discipline and random firings.”

Ray Schillaci, president and field representative of the union local, which usually represents film studio crafts workers, says the wages are not up to industry standards.

“We have learned that Virgin Records and Blockbuster employees make more than these people do here and we want to bring them up to par,” he says. “But what a lot of the employees are really looking for is an end to random firings and selective discipline.”

Store general manager Jay Smith disputes the claims, saying that although starting wages may be lower than at other chains, longer-term opportunities are quite competitive. He also says there are no salary caps.

“Six dollars an hour is not the maximum,” he says. “We’ve heard the term ‘salary cap’ a lot in the union meetings, and there is no such thing. Every employee is given the opportunity to take on more responsibilities and with that comes better wages.”

Smith, 32, is a 15-year Tower employee and cites himself as an example of someone who worked his way up from a basic clerk to a key post in the company.

Smith also is the focus of pro-union forces who contend that he has ruled the store with an iron fist and used threats to coerce employees--especially new ones--to vote anti-union.

Dunlop quoted Smith as saying in a meeting on the union issue, “This [store] is my house, and you are guests in my house, and I can ask you to leave at any time.”

Smith doesn’t deny saying that but says it needs to be quoted in context.

“If you take it in context, what I was saying was that it’s my job to run this store, and you need to follow the rules and if you don’t, then it’s my job to find someone who can do the work,” he says. “That has always been that way and it hasn’t changed” because of the upcoming vote.

More serious are charges that Smith fired a new employee earlier this month shortly after the worker let it be known in a meeting that he was tired of anti-union claims Smith had been making.

Brad Cox, the fired employee, says he was let go after just a month on the job without ever being given a clear reason.

“I think it was because I was new and was supporting” the union, Cox says.

Smith denies this account.

“That’s absolutely not true,” he says. “He was a brand-new employee with three infractions. That’s all.”

In some ways, it’s strange for Tower to find itself in this fight. The chain, started by Chief Executive Russ Solomon in 1960 in the back of his father’s Sacramento drugstore, has thrived on a reputation for progressiveness. It is widely known for carrying a much more extensive range of titles than the standard chain store and for employing an unusually knowledgeable staff.

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Today, it’s a top-ranking chain with 119 outlets in the U.S., 33 in Japan and 22 others in Britain, Ireland, Eastern Asia, Israel and Mexico. It also plans to move into South America.

Says Smith: “It’s been hard getting through the message to some employees . . . that though they seem to feel Tower is raking in huge profits, it isn’t right now. We’ve got to go through the campaign and collectively the employees will decide.”

Dunlop is confident the business will be changing after the vote.

“I predict we’ll win,” he says. “ . . . What we’re saying is right, and if anyone looks at history, you have to ask, ‘Why are businesses always anti-union?’ Tower is big business, and unions secure rights for employees.”