Opinion ID: 717843
Heading Depth: 2
Heading Rank: 3

Heading: AutoZone's Pay Adjustment Process and Surrounding Conduct.

Text: 7 AutoZone uses a pay increase procedure that includes an annual pay adjustment for the employees at its various distribution centers, each having its own wage scale. The annual increase is determined separately for each distribution center by its local management and is not guaranteed. In fact, the increase is granted only if a wage survey shows a given distribution center's payscale is not competitive within its geographic area. Once the information is collected, Vice President Roberts reviews it and then makes a recommendation to AutoZone's president. In 1991, AutoZone began conducting its wage surveys and analysis in December, with wage adjustments being made in January 1993. 8 On a routine visit in November 1992 to the Greenville Distribution Center, Roberts was approached by several employees, asking about a wage increase and if so how much. Roberts replied to the best of his knowledge that he expected a wage increase between 4 to 5 percent, but this figure was not yet confirmed. About two weeks later, Roberts returned to Greenville, where both he and management met with small groups of employees to convey the same information about the wage increase. In addition, they added that AutoZone was awaiting the results of a labor market analysis being done in its Phoenix, Arizona distribution center by the Hay Group. If the Phoenix survey showed AutoZone's wages not to be competitive there, AutoZone would then assume its other distribution centers were also not competitive and initiate wage surveys in those areas. 9 In mid-December 1992, Vice President Roberts received a copy of the Hay Group survey, which indicated that AutoZone's pay was no longer competitive in the Phoenix area. In response, Roberts issued instructions to begin wage surveys for all distribution center areas, including Greenville. Having received all the data for AutoZone's distribution centers, Roberts reviewed the material and passed on his wage increase recommendations for all the distribution centers, except for Greenville. Roberts placed the Greenville wage data aside; he did not perform his analysis or finalize a recommendation regarding a pay adjustment for the Greenville Distribution Center. On January 11, 1992, AutoZone's president approved Roberts' recommendations with some modification. 10 According to the data from the wage surveys at the other distribution centers, the wage adjustment at Greenville, had it been made, would have been greater than 5 percent. Furthermore, if the adjustment had been implemented at Greenville, it would have been effective for the pay period beginning January 3, 1993. 11 On January 22, 1993, Vice President Dennis Roberts and Manager Rick Ferguson made a joint speech to the Greenville employees. After a few introductory comments, Ferguson emphasized that We do not want the teamsters or any other union in our operation!!. He added, We are completely and entirely against this union getting in here and we will take every legal step available to keep it out!!. Roberts, delivering the second half of the speech, stated: 12 The other issue I want to discuss has to do with the status of pay increases at this [distribution center]. A number of you have asked when or if the 4 to 5 percent increase we had mentioned back in December would be going through. You need to understand that the numbers we mentioned in December were a tentative forecast only. After that time, we decided to re-evaluate the pay situation in this market. Before we were able to gather all the data we needed and reach a final decision, however, the Teamsters' petition came in. Our understanding of the law is that we cannot make changes in the pay or benefits once a petition comes in, unless the decision had been finalized beforehand. We very much regret that the union's poor timing has now tied our hands, but we do not intend to violate the law. The thing to keep in mind, though, is that once the union is beaten in the election--and we feel confident that is exactly what is going to happen here--then we will be able to move forward, free of the restrictions that we now live under. We're sorry we cannot be more specific than that now, but we wanted you to understand the legal status of your pay increase at this time. 13 AutoZone then conducted a question-and-answer session following this speech. In response to a question concerning pay increases at the other distribution centers, Ferguson responded that the average increase was between 12 and 15 percent.