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The Los Angeles Times reports this morning that the International Brotherhood of Teamsters has complained to California Attorney general Bill Lockyer that Costco is violating state law by asking employees to solicit signatures that would force a referendum on Gov. Arnold Schwarzenegger's workers' compensation reform initiative.

The Teamsters accuse Costco of forcing employees "to engage in political activity on behalf of an employer," noting that the California Labor Code "strictly prohibits an employer from adopting any policy which has the effect of controlling or directing or tending to control or direct the political activities or affiliations of employees."

The union reportedly represents about 40 percent of Costco's 30,000 California employees, Mack said.

Costco replied that it isn't forcing anyone to do anything. "We've instructed our managers in every building in California that if any one of our employees is uncomfortable with soliciting signatures, they should go do something else," said Joel Benoliel, Costco's chief legal officer, told the LAT. "They're not going to suffer any adverse consequences whatsoever."

As reported earlier this week on MNB, Costco Wholesale Corp. CEO Jim Sinegal said that the company has ordered enough petition forms to gather up to 900,000 signatures - 300,000 more than it needs - that would force a referendum that would overhaul the state insurance program it blames for cutting into profits. About a third of Costco's work force is in California, but the state accounts for more than two-thirds of its workplace injury expenses."

California doctors reportedly have leeway to generously diagnose and treat injuries. One study suggests that injured California employees visit chiropractors twice as often as injured workers in other large states.

All this labor-related activity comes as Costco is being criticized by some analysts for paying its employees too much money, which cuts into the company's profitability.
KC's View:
We suspect even Costco would acknowledge that it is getting into potentially dangerous territory by introducing politics into the workplace…but clearly it feels that the "out-of-whack system" makes the risk worth taking.