Is REI Actually Nonetheless A ‘Co-Op’? – The Boston Courier

The outside retailer REI desires you to comprehend it isn’t a typical company — it’s a consumer-owned cooperative, with values past simply making a living. Lest you overlook, REI places “co-op” on its retailer indicators. It sells “co-op”-branded bikes, sleeping baggage 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 staff desires to search out out.

The United Meals and Industrial 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 corporate’s progressive repute.

Although anybody can nominate themselves to serve on the retailer’s board, that doesn’t imply their identify 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 an enormous downside for staff like Sue Cottrell, who believes the corporate has strayed from its roots. She desires new board members who will deliver contemporary views and reasonable 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 really have a voice in who gets to be on the board — the people who end up on the ballot have been chosen by the current board,” stated Cottrell, a 70-year-old worker at REI’s retailer in Bellingham, Washington. “They’re cherry-picking who they want.”

Final yr, union supporters urged co-op members to forgo backing any explicit candidate and vote “withhold” in protest of the method. This time, they’re stumping for 2 names to make their manner 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 operating 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 assist. The union hopes a robust present of assist from co-op members may power 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, by which staff 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 need to really, truly re-evaluate the values of what having a co-op means and make sure that you live those values,” stated Moreno, whose group has turned out in assist of the REI union at protests. “If you’re gonna say it, then you need to live it.”

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

“In a lot of boardrooms … workers are seen as an expense instead of as an asset,” stated Gebre, who fled violence in Ethiopia as a baby and later rose by way of the ranks of U.S. organized labor. “You need someone in the boardroom to take the us-versus-them attitude out of it. Because right now … REI already is at war with its employees.”

REI denies it’s damaged the legislation and says workers are free to arrange. 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 “multiple factors” to establish the most effective candidates however considers “exceptional business judgment and decision-making skills” to be important. It additionally expects board members to be “first and foremost co-op members.” Gebre stated he turned an REI member final yr, and that his spouse has been a member since 2001. Moreno stated she’s been a member since 2016.

“We look for candidates with proven business acumen and relevant experience operating in organizations of similar size and scale to REI; a demonstrated history of innovation and disruption, particularly in the retail industry; and the skills to be an effective board member,” the REI spokesperson stated in an electronic mail.

Requested particularly concerning 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 utility. Moreno shared with HuffPost a replica of her electronic mail to the board, together with her utility hooked up, dated the morning of Oct. 10, 2024, which was listed because the deadline on the appliance type. When HuffPost shared a screengrab of that electronic mail with REI, the corporate nonetheless stated she was not into account.

“Unfortunately, we have no record of this email,” the spokesperson stated.

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

“The best-case scenario is someone didn’t check their spam folder,” she stated of REI. “The worst-case scenario is REI is afraid of a pro-staff candidate for [the] board. This is not the REI I know and love. I applied to run for the board to be a voice for the people in green vests who make REI great but who are not allowed a voice on the co-op’s board of directors.”

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 value $1; as we speak it’s $30 and comes with a ten% reward on purchases on the finish of the yr, for use as an REI low cost.

Allegations that REI is now not a co-op in spirit predate the union marketing campaign by no less than a few many years. A 2003 Seattle Weekly story portrayed a profit-driven and opaque company that wouldn’t reveal its then-chief govt’s compensation. “Who Owns REI?” the story requested. “It can’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 once {that a} candidate may 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 have 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 standard function at public firms as properly. However not like with a public firm, there isn’t a clear route at REI for a board proxy struggle, a well-established course of by which 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 in this document or in this culture that’s like the proxy contest. That’s the big difference,” stated Cunningham, who reviewed REI’s bylaws at HuffPost’s request. “The public company path is very highly regulated; people know the rules of the road. Here, they have to go grassroots, and there’s no roadmap.”

Whereas public firms are express about maximizing worth for shareholders, the mission at REI is a bit of squishier. Beneath a bit outlining the co-op’s rules, REI’s bylaws give a nod to fostering environmental stewardship, being a “responsible” company citizen and sustaining an “excellent workplace.”

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

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

“Someone should fix the way those bylaws are read,” 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 yr, with an extra $25,000 to $50,000 for these serving as chairs. REI says that compensation is critical to draw expertise however nonetheless “below the median for comparable companies.”

It appears REI’s board wasn’t all the time so chock filled with MBAs. A 1993 Seattle Occasions article stated the corporate’s administrators included a neighborhood emergency room nurse, an Alaska-based climbing information and an Idaho “civic activist,” amongst others. The pay again then was nothing like as we speak. In 1996, REI members narrowly rejected a proposal to hike director compensation — voting to maintain it at simply $3,832 a yr. Important 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 concept, could possibly 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 through the years. He determined to take an in depth take a look at REI’s bylaws after studying concerning the organizing marketing campaign.

“You look at the REI structure and there’s no way to directly have an impact,” Orr asserted. “Everything has to be approved by the board of directors.”

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

“If you’re going to point to it,” he stated of the co-op standing, “then you ought to live by it.”