Complaints Against Multinational Supermarket Chain a Test of Labor Protections in International Trade Agreements

For Immediate Release

Complaints Against Multinational Supermarket Chain a Test of Labor Protections in International Trade Agreements

Coalition of Labor and Consumer Groups File NAFTA and OECD complaints to Halt Worker Abuse at Mexican Retail Giant Chedraui Commercial Group

WASHINGTON - As the Trans-Pacific Partnership (TPP) debate intensifies, a coalition of U.S. and Mexican labor and civil society groups are taking an unprecedented legal approach to protect workers’ rights that will test the strength of labor protections in international trade agreements.

The coalition filed “double barrel” complaints today under the NAFTA labor agreement and Organization for Economic Cooperation and Development (OECD) guidelines to challenge workers’ rights abuses in both Mexico and the United States by Mexican retail giant Chedraui Commercial Group. The groups were led by the United Food & Commercial Workers Local 770 (UFCW) union in the United States and the Frente Auténtico del Trabajo (FAT) union in Mexico.                                                                                                                                                                                                  

“Chedraui is a multinational firm that should live up to the labor standards set by NAFTA and the OECD guidelines,” said UFCW Local 770 President Ricardo Icaza. “In both Mexico and the United States, the company has silenced employees’ voices and trampled their rights, and we believe an international solution is necessary to this international problem.”

Chedraui is Mexico’s third-largest retail chain with 35,000 employees in more than 200 stores throughout the country.  Through its 83 percent ownership stake, Chedraui controls California-based Bodega Latina Corporation, which does business as the El Super grocery chain. El Super has 50 supermarkets employing more than 5,000 workers in California, Arizona and Nevada.

The joint complaint has implications for the upcoming Congressional review of the Trans-Pacific Partnership.

“President Obama is pushing for TPP approval in the face of strong opposition from unions and others who see it as a giveaway to multinational companies that will only intensify inequality and downward pressure on jobs and wages,” said University of Maryland international labor law professor Marley Weiss, who was formerly chair of the U.S. National Advisory Committee on the NAFTA labor agreement.  “If the administration fails to take strong action in this Chedraui case, critics will see it as a signal that the United States is falling short on linking trade, investment and labor rights.”

The OECD complaint calls for a halt to El Super’s aggressive, multi-year campaign of coercion against workers seeking a living wage, adequate sick days and affordable health insurance. After a series of unfair labor practice charges, the U.S. federal government sought a rare injunction to force the company to rehire a wrongfully fired union activist and reinstate unlawfully changed benefits, and return to the bargaining table.  The Federal Court issued injunctive relief and as a result of the government’s actions the company agreed to return to union contract negotiations with the UFCW.  However, the company has continued to ignore its obligations under the National Labor Relations Act and the two sides remain far apart in bargaining.

The NAFTA complaint alleges that Chedraui has cultivated dozens of sham unions in Mexico through so-called “protection contracts” that represent the interests of management, not workers, and prevent the formation of independent unions. Union officials said they are examining additional claims related to the NAFTA labor agreement’s strictures against child labor, discrimination, health and safety hazards, and wage and hour violations.

This filing is the first time complaints about a company’s international labor abuses have been simultaneously submitted under both the OECD and NAFTA complaint mechanisms. The groups filing the complaints believe this approach will produce results tailored to the situation in each country. The Los Angeles Alliance for a New Economy (LAANE) and the Project on Organizing, Development, Education, and Research (PODER) in Mexico co-filed the complaints with the UFCW and FAT.

About the organizations


Naomi Klein Block


The UFCW represents 1.3 million workers in retail food, drug stores, packinghouses, food processing plants and other industries. Local 770 Local 770 has been representing the interests of retail workers in Los Angeles County for 76 years and has 33,000 members, including El Super employees.

The FAT (Authentic Labor Front in English) is an independent federation of labor unions, worker owned cooperatives, and farmworker and community organizations.

The LAANE is a national leader in the effort to address the challenges of working poverty, inadequate health care and polluted communities. 

The PODER is a regional non-governmental organization whose mission is to improve corporate transparency and accountability in Latin America and to strengthen civil society stakeholders of corporations as long-term accountability guarantors.

Additional information on the filing process

The UFCW, FAT, LAANE and PODER filed the NAFTA complaint with U.S. Department of Labor. The NAFTA complaint seeks an investigation into Chedraui’s practices in Mexico and an evaluation of what the unions say is ineffective labor law enforcement by the Mexican government. The U.S. labor department has 60 days to decide whether to accept the NAFTA complaint for review, and it could ultimately lead to fines and other penalties.

Information on the NAFTA labor agreement (formally the North American Agreement on Labor Cooperation or NAALC) and its complaint mechanisms is available at the website of the Department of Labor’s Bureau of International Labor Affairs (ILAB) at http://www.dol.gov/ilab/trade/agreements/naalcgd.htm

The same coalition filed a complaint against El Super in the United States under the Guidelines for Multinational Enterprises of the 34-nation OECD. The organization adopted the guidelines in 2011 to promote good corporate citizenship by firms investing in other member countries. On industrial relations, the guidelines require good faith collective bargaining, respect for workers’ organizing rights, and fair pay and conditions. 

Each OECD country maintains a National Contact Point (NCP) to receive complaints about labor abuses by foreign investors.  Based in the State Department, the U.S. NCP has three months to decide whether to act on the unions’ complaint against Chedraui’s El Super chain. It can offer a mediation process that aims at resolving the dispute within six months.

Information on the OECD Guidelines and the U.S. National Contact Point is available at the US NCP website at http://www.state.gov/e/eb/oecd/usncp/index.htm. U.S. NCP confidentiality rules do not allow disclosure of the text of the unions’ complaint. However, information on El Super’s conduct is available on the union website at http://www.ufcw770.org/content/contractupdate-el-super

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UFCW LOCAL 770 represents workers in the retail food, meat, drug stores, packinghouses, food processing plants, pharmacies, laboratories, as well as barbers and beauticians.

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