One of those improvements is said to be reducing labor costs. How that will be done, the executives didn't say.Participating in an April 2nd conference call with other Rite-Aid executives and media analysts to report on the company's 4th quarter (closing February 28th 2009), Rite-Aid President and Chief Operating Officer John Standley made several comments with regard to the company's performance together with forecasts for the remainder of 2009 and 2010.
Among the various number-crunching that traditionally is a part of such exercises, Standley references "outstanding performance in labor control by our operations team which is particularly impressive given that several of our key initiatives designed to improve store productivity won't be rolled out until second quarter of fiscal 2010."
What those initiatives are, the Rite-Aid COO does not say specifically. However he goes on to say that "labor improvement was in both front end and pharmacy and is the result of dramatic improvement in adherence to our labor standards and use of our labor scheduling tool."
Standley did not identify what the labor-scheduling tool is.
However, according to an article that appeared in a recent edition of Washington Monthly, Rite-Aid employed productivity software called ProRep at its warehouse and distribution facility at Lancaster, California. An employee of Rite-Aid at the time described the software as "awesome," but at the same time accused Rite-Aid Corporation of unfairness and being inflexible with regard to the way the software was implemented.
An example of this might be the loading of boxes. In an example of the Lancaster center as described by Washington Monthly, ProRep might consider the pulling and loading of 100 boxes an hour as an example of desired productivity. The weight of the boxes would not matter—they could be 20 pounds, or 50.
The software would measure an employee's performance according to weekly totals, as opposed to daily summaries. There were no allowances made for sick days, for example. When an employee needed to take a day off, that person's quota for the week was missed.
There were other events on the labor front at the Lancaster distribution center that suggest current hard feelings over Rite-Aid overtime and the current allegations before the courts, may have a basis in a change in management at the facility in 2004. Prior to the management change, employees were high on Rite-Aid and how it was run. They were more than content with the hours, the rate of pay and the benefits.
In 2004 at Lancaster, that all seemed to change. Along with the introduction of the productivity software, mandatory overtime was introduced—a situation that was great for employees who needed the extra money, but not so for parents with children who needed predictable hours.
There were other accusations in the ensuing years pertaining to Rite-Aid's alleged filibuster of an attempt by workers to organize. It has been reported that various tactics were used to prevent a union from coming in, followed by various stalling tactics to arrive at a first contract.
The current disagreement with Rite-Aid Corporation with regard to overtime centers on assistant managers who feel they have been improperly classified as exempt from overtime, even though they perform many of the same functions as non-exempt employees over a majority of their workweek.
There was no reference to the litigation in the April 2nd Rite-Aid Q4 conference call as archived on SeekingAlpha.com. However there were various revelations which play well to market analysts, but may not make it easier for current Rite-Aid employees. For example, it was revealed that Rite-Aid has reduced its 'headcount' in stores, administrative offices and distribution centers by 6,500 people, or 6 percent since August. They have also closed at least two distribution centers. These changes, it is assumed, would increase efficiencies for Rite-Aid but may put greater stress on its remaining employees.
READ MORE RITE-AID LEGAL NEWS
In the April conference Call Rite-Aid CEO Standley made references to a new, low volume store-operating model "including changes to store labor…" What those changes might involve, Mr. Standley didn't elaborate.He did say that it was Rite-Aid's goal to find ways to make Rite-Sid stores run better, improve the shopping experience for Rite-Aid customers "and make our stores a better place for associates to work."
How that statement might impact the current Rite-Aid overtime pay class action, or any future litigation remains to be seen. The bottom line, of course is the ability for Rite-Aid Corporation—now combined with the former Eckerd Corporation—to weather the current economic storm and improve its position. What role Rite-Aid employees will have in the company's evolution and the impact on them beyond the current Rite-Aid overtime class action has yet to be determined.
