Guitar Center: "Sign This Or You're Fired!"

Guitar Center is at it again, bullying employees into signing an agreement that would strip them of the right to sue the company in class action lawsuits over wage violations, workplace discrimination and unjust firings, among other disputes, according to the Huffington Post.

Employees at the Las Vegas store were told that they had to sign the agreement by the end of Friday or their jobs would be terminated.

Arbitration is a tactic used my many big companies today to keep down the legal costs that a court case may involve during a dispute. Instead the case is referred to a third party arbitrator for settlement.

While on the surface that might seem fair, many times the arbitrator maintains a cozy relationship with the company, resulting in favorable rulings, as outlined by an article in the New York Times. The big difference here is that GC is requiring employees to sign the agreement after they've been hired, while usually the agreement is signed when they're first hired.

Keep in mind that GC is still involved in a labor dispute with the Retail, Wholesale and Department Store Union regarding 3 GC stores electing to unionize, but the company failing to reach a contract agreement with any of them. A decision hasn't been issued by the arbitrator in that case yet.

While its unclear whether Guitar Center's current actions violate a law since the court has ruled multiple ways in the past, the union is considering additional legal actions.

Things just get worse for GC employees, which means that it won't get any better for customers either.

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Guitar Center Charged With Unfair Labor Practices

We all like the convenience of Guitar Center, especially when it comes to product selection, but one of the things that most customers dislike is the service. Most floor salesman don't stay very long (especially if they're any good), and that high turnover rate leads to a generally inexperienced and sometimes inattentive and undertrained staff that can sometimes be frustratingly unhelpful.

The reason why employees don't stay very long is that they're not treated very well by the company, having to work long hours for low pay and few benefits for the "privilege" of having a day job connected to the music that they love. Even store managers have a real grind that takes over their lives.

Many thought that situation might turn around last year when three GC stores in New York, Chicago and Las Vegas won elections to become part of the Retail, Wholesale and Department Store Union (RWDSU), with two other New York stores voting against installing the union.

Now the RWDSU has filed unfair labor practice charges with the National Labor Relations Board alleging that Guitar Center has stalled in bargaining talks and attempted to punish workers who voted for union representation. The reason? Although the union was voted into the three GC stores, it has yet to reach a  collective bargaining contract with the company and seemingly has no interest in doing so.

The powerful AFL-CIO labor federation has even gotten involved and accused the company of dragging its feet as a tactic to warn other employees to back off from any attempts at unionizing.

Here's the bottom line - A strong Guitar Center is good for the entire music business, especially at the moment. Happier and better trained employees would lead to more satisfied customers and stronger sales, which once again, is good for everyone.

The company is now being run by Ares Management, who recently took over from Bain Capital, two investment firms that have demonstrated their interest more in bottom line profits at any cost rather than happy employees and customers (here's more about that in a previous post).

What we're seeing is some long-standing union busting management tactics because Ares/Bain needs to squeeze every dollar out of the company. Simply stated, both companies are very upside down in terms of their return on investment in GC, so the last thing they want to see is an increase in labor costs and benefits due to unionization. Meanwhile GC, the manufacturers, employes and customers suffer, with no glimmer of hope on the horizon.

Unfortunately, this is another lose-lose situation where no one benefits. A strong Guitar Center is currently very important to our industry, but this course of action does little in taking it there.

You can read more details here.

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