Costco Says Governor’s Rallies Outside Its Stores Violated Company Policy

Despite a company policy that prohibits political activity outside its stores, Costco officials let Gov. Arnold Schwarzenegger campaign for workers’ compensation reform this week on the doorstep of outlets in Burbank and Sacramento.

One of the company’s top attorneys said Tuesday that even though Costco fully supports the governor’s goal, store managers should not have let him solicit petition signatures in front of the discount retailer.

As a result, Costco’s corporate counsel Karen Raines said, the company will offer an opposition group 30 minutes to argue its side to shoppers in front of the Burbank store. “It’s probably a fair thing to do,” she said.

For six years, Costco has been waging -- and winning -- court fights to block such political solicitations, and has even been known to shoo away Girl Scouts trying to sell cookies.

Bruce Greenwood, senior vice president for Costco’s Los Angeles region, acknowledged that the company did not allow signature gatherers or charitable groups like the Scouts to set up shop on private property in front of their stores.

Warehouse stores are prime locations for political activists because they draw large numbers of customers and tend to funnel them through a central entrance. The more people who pass by a petition table, the better the odds of getting a signature.

“We’d like to let Girl Scouts or charitable groups,” Greenwood said. “We just can’t do it. We can’t control it. If we allow anybody out there, we have to allow everybody.”

It was Greenwood who did not object on Monday when Schwarzenegger’s security detail wanted the governor to speak outside rather than inside the Burbank store, where only members are admitted.

“He made an error in judgment on that,” Raines said. “All of this activity [by Schwarzenegger] was supposed to be inside.”

But Raines said Costco was not changing its policy to restrict such activity outside its stores. She said the company had the right to address its members inside the stores.

Raines said she intended to also investigate the circumstances that led a Sacramento store manager to allow the same kind of Schwarzenegger appearance on Tuesday. She said she had advised store officials not to conduct the event outside.

A state appellate court in San Diego ruled in February 2002 that Costco had the right to prohibit “expressive activity” outside stores that were not part of larger shopping centers, which are considered public areas.

Raines said in an interview from the company’s Seattle-area headquarters that a more recent court decision had allowed Costco to ban such activity outside all of its California stores, including those in larger shopping centers.

Dale L. Gronemeier, a South Pasadena attorney who defended three signature gatherers sued by Costco in San Diego County, expressed concern about court decisions placing restrictions on political activity.

“The use of corporate power to progressively wall off what used to be free-speech places is a terribly dangerous trend in our society,” Gronemeier said.

The California Supreme Court ruled in 1979 that a large Santa Clara County shopping center known as the Pruneyard could not prohibit expressive activity, but could regulate the time, place and manner of it.