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"The first time Nordstrom sales clerk Lori Lucas came to one of the many mandator

y Saturday morning department meetings and saw the sign Do Not Punch the Clock she assu
med the managers were telling the truth when they said the clock was temporarily
out of order. But as weeks went by, she discovered that on subsequent Saturdays
the clock was always broken or the time cards were not accessible. When she and s
everal colleagues hand-wrote the hours on their time cards, they discovered that
their manager whited-out the hours and accused them of not being team players. Co
mmenting on the variety of tasks that implicitly had to be performed after hours
, Ms. Lucas said, You couldn t complain, because then your manager would schedule y
ou for the bad hours, your sales per hour would fall, and next thing you know, y
ou re out the door. 1
Patty Bemis, who joined Nordstrom as a sales clerk in 1981 and quit eight years
later, told a similar story:
Nordstrom recruiters came to me. I was working at The Broadway as Estee Lauder s c
ounter manager and they said they had heard I had wonderful sales figures. We d al
l heard Nordstrom was the place to work. They told me how I would double my wage
s. They painted a great picture and I fell right into it. . .
The managers were these little tin gods, always grilling you about your sales. .
. . You felt like your job was constantly in jeopardy. They d write you up for an
ything, being sick, the way you dressed. . . . The girls around me were dropping
like flies. Everyone was always in tears. . . .
Working off the clock was just standard. In the end, really serving the customer
, being an All-Star, meant nothing; if you had low sales per hour, you were forc
ed out. . . .
I just couldn t take it anymore the constant demands, the grueling hours. I just sai
d one day, life s too short"
"Despite employee grievances such as those of Lori Lucas and Patty Bemis, top ma
nagement at the fashion specialty retailer acknowledged no serious problems with
its management systems. Jim Nordstrom, co-chairman of the company with his brot
her John and cousin Bruce, explained management s position in a statement to the p
ress:
We haven t seen any complaints from the union. . . . If employees are working with
out pay, breaks, or days off, then it s isolated or by choice.
A lot of them say, I want to work every day. I have as many people thank us for le
tting them work all these hours as complain. I think people don t put in enough ho
urs during the busy time. We need to work harder.
A lot of what comes out makes it sound like we re slave drivers. If we were that k
ind of company, they wouldn t smile, they wouldn t work that hard. Our people smile
because they want to"
"Background of the Current Situation"
"John W. Nordstrom founded Nordstrom in 1901 as a shoe store. Nearly a century l
ater, by the end of 1989, the company had grown to become the nation s leading spe
cialty retailer of apparel, shoes, and accessories. The company operated 59 depa
rtment stores in six states and was implementing a national expansion plan that
called for store openings in several additional states in the early 1990s. By th
e end of 1989, sales were approaching $3 billion and Nordstrom enjoyed one of th
e highest profit margins in its industry.
Nordstrom, which issued shares to the public in 1971, had always been run by mem
bers of the Nordstrom family, who still owned roughly half of the company. The t
hird generation of Nordstrom family managers, who had been at the helm since 197
0, upheld the management philosophy of the company s founder: offer the customer t
he best in service, selection, quality, and value.
Superior customer service was Nordstrom s strongest competitive advantage and cons
equently a major source of its financial success. The retailer had enjoyed nearl
y 20 years of uninterrupted (primarily double-digit) earnings growth before repo
rting a decline for the 1989 fiscal year. (Exhibit 1 provides a history of Nords
trom s financial performance.) With sales per square foot of $380 in 1988,4 Nordst
rom was among the most productive in the industry, generating roughly double the

1988 industry average for specialty retailers of $194 per square foot.5
Throughout the 1980s, Nordstrom s salespeople were the envy of the industry in ter
ms of their quality and productivity. The caliber of the company s sales clerks se
emed to withstand the pressures of rapid growth as the company s work force expand
ed geographically and grew from 5,000 employees in 1980 to 30,000 in 1989. The c
lerks heroics (as they called their exceptional customer service efforts) helped to
build the store s alluring image, its extremely strong customer loyalty, and its
lofty sales per square foot."
"At Nordstrom s, it was common practice for sales clerks, or Nordies as they called
themselves,
to:
drive to another Nordstrom store to retrieve a desired item in an out-of-stock s
ize or color;
drive to a customer s home to deliver purchases;
call up a valued customer to alert her of newly arriving merchandise;
help a customer assemble a complete outfit by retrieving items from several diff
erent departments; and
write thank you notes to customers for their purchases.
Sales clerks were also known for performing such heroics as changing a customer s
flat tire in the store parking lot; paying a customer s parking ticket if his or h
er shopping time outlasted the parking meter; lending a few dollars to a custome
r short on cash in order to consummate a purchase; and taking a customer to lunc
h.
By performing these extraordinary services which were often performed outside of a
sales clerk s scheduled time on the selling floor sales clerks earned their custome
rs praise, gratitude, and loyalty. (Exhibit 2 reproduces a typical customer lette
r.) In addition to customer loyalty, industrious clerks could earn over $80,000
a year. The average Nordstrom sales clerk earned $20,000 to $24,000 compared to
the national average for all retail sales clerks of $12,000 a year.6
During the 1980s, more and more rivals such as R. H. Macy, Bloomingdales, and Ne
iman Marcus began to emulate Nordstrom s service-oriented strategy. According to o
ne industry expert:
All retailers in America have awakened to the Nordstrom threat and are strugglin
g to catch up. Nordstrom is the future of retailing. . . . [It] is the most Darw
inian of retail companies today.7
At the end of the decade, Nordstrom s much heralded reputation was formally acknow
ledged with the 1989 National Retail Merchants Association s Gold Medal considered b
y many to be the most prestigious award in the industry"
"Policies, Practices, and Measurement Systems".
"In the mid-1960s, to support its high-service strategy and motivate its salespe
ople, Nordstrom had introduced an innovative commission system revolutionary among
specialty retail and department stores. Top management combined this incentive
compensation system which was driven by sales per hour (SPH) with other distinctive
policies to guide, motivate, and measure the performance of its sales staff. Alt
hough its established set of management systems and policies had proven very eff
ective for over 20 years, problems began to emerge at the end of the 1980s."
"Sales-per-Hour Incentives".
The following account9 describes the mechanics of Nordstrom s commission-selling s
ystem as well as the explicit and implicit ways in which it affected employees:
Interviews with a dozen current and former Nordstrom employees in California ill
ustrate the contradictory pressures that workers can experience in a system that
tries to give equal emphasis to service, profitability, and middle- managerial
autonomy.
Most of those interviewed said no manager ever formally told them to go off the
clock, an order that would flatly violate state and federal fair labor standards
laws. Rather, they said, it becomes clear to most Nordstrom salespeople soon af
ter they are hired that the store s commission-selling program effectively penaliz

es any salesperson who insists on getting paid for every hour worked.
The reason is that Nordstrom carefully evaluates salespeople on their sales- per
-hour ratio. Each employee is given a target SPH ratio a quota based on his or her b
ase hourly wage and store department. The actual SPH for the past two weeks sales
minus merchandise returned by customers, divided by hours worked appears on each
paycheck stub.
If the actual SPH is higher than the target SPH, the employee is paid a 6.75% to
10% commission on net sales, depending on the department. If the SPH is below t
he target, the employee is paid the base hourly wage [roughly $9.00, with variat
ions by department].10 Failure to meet the target SPH often results in decrease
d hours or, in some cases, termination. Meeting or surpassing the target SPH mea
ns more working hours including better hours when the shopping is heavier and a bett
er chance of promotion to a department manager job.
Stories of some Nordstrom workers making $40,000 to $60,000 or more a year thank
s to hefty commissions are widespread. But critics of the system say rank-and- f
ile salespeople are often torn in this environment."
"To chalk up the most impressive SPH ratio, salespeople must be on the floor sel
ling. But to carry out the Nordstrom credo of being a team player or a Nordie, they
also must be available to run themselves ragged meeting each customer s needs, whi
ch can take considerable time. Time also must be spent in routine merchandise st
ocking, store display activities or attending numerous sales staff meetings. The
se hours, if formally recorded, lower the SPH.
Initially your feeling is, I ve got to punch in for every minute I m there, said Joel
Kirk, who worked as a salesman and a men s clothing manager for several years in N
orthern California before leaving Nordstrom last summer to return to college. The
n you find you re at the bottom on SPH, or near it. Then someone nudges you. It s th
ere but it s not said. It s an underlying factor that everyone eventually realizes."
" There is pressure on (department) managers to get people with the biggest SPH in
to the most hours. You re not told that if you don t (go off the clock) you ll get you
r hours cut. It becomes an inferred thing. The more you sell per hour, the more
hours you get, said Kirk, who spoke on the condition that his real name not be us
ed.
As a result, critics of the system say, people making blue-collar wages and gove
rned by hourly wage laws find themselves having to make time-management decision
s usually reserved for white-collar professionals who are paid much higher weekly
salaries and, in exchange, are expected to work some uncompensated hours.
Nordstrom says to salespeople, This is your own business, treat it like your own
business, but it s not said outright that you re going to have to do all these extra
things, said Kirk, who emphasized that he has no hard feelings against the compa
ny. They don t sit you down and say the calling of past customers for new business
is important, the thank-you cards are important, taking things to the customer s h
ouse is important, running things out to a local tailor when Nordstrom s tailor is
backed up is important.
To honor those who thrive, Nordstrom awards its top sellers annual membership in
the company s Pace Setters Club, entitling them to 33% discounts on merchandise.
The posting of SPH figures creates peer pressure that is regarded by retail anal
ysts as a strong motivator.
However . . . dissident salespeople
complain
about intense competit
ion between individual salespeople. Often cited is the court case in King County
, Washington, where a jury last fall awarded $180,000 to a former Nordstrom sale
swoman who claimed that she was wrongfully dismissed because co-workers wrote an
onymous letters claiming that she stole from them by falsely crediting herself w
ith their commissions."
"Examples of Compensation Determination"
"The following two examples, one for a sales clerk generating $8,000 in weekly s
ales and one for a clerk generating $5,000 in weekly sales, illustrate the incen

tives built in to Nordstrom s SPH compensation system:


"As in the first example, the sales clerk stands to gain financially by reportin
g all hours worked. If the clerk does so, however, the SPH drops substantially b
elow his or her target level. According to employees descriptions of the system,
a substandard SPH can result in fewer scheduled hours, worse shifts, and if such p
erformance persists for several pay periods termination, not to mention stressful
peer pressure. Again, employees may opt to work off the clock rather than report
all hours.
The lack of a clear distinction between selling time and non-sell work time exacerba
ted the pressures on employees. For example, an hour of extra work defined as non
-sell (e.g., annual stock-taking) by Nordstrom entitled an employee to the guaran
teed base wage with no effect on his or her SPH. If the same hour was considered
selling time, his or her SPH would be affected negatively. Moreover, the clerk
was considered to be fully compensated for all selling hours through commissions
(assuming targets were exceeded) and was therefore not entitled to any extra pa
y for reporting the extra hour worked. (Exhibit 3 reproduces an internal memo di
stributed by top management in an effort to clarify its system of differentiatin
g between selling and non-selling time on the job.)"
"Additional Elements of the Management System"
"Although SPH monitoring was the heart of Nordstrom s distinctive management strat
egy, the SPH system was complemented by other organizational factors. For exampl
e, the composition of the sales force was well-suited to the competitive work en
vironment. Nordstrom sales clerks tended to be young, often college-educated peo
ple looking for a career in retailing. They were willing to work hard in exchang
e for the retailer s relatively high salaries and opportunities for rapid advancem
ent.13 The company s policy of promoting only from within also enhanced the overal
l level of Nordstrom experience within middle management and helped to motivate
ambitious and hard-working employees.
The availability of desirable merchandise in appropriate colors and sizes was cr
itical to Nordstrom s success. Department managers worked closely with buyers and
often had direct buying authority. Since the sales-per-hour commission system re
warded turnover, Nordies were committed to working with their department manager
s to anticipate customer buying patterns and ensuring adequate stock.
Throughout the chain s rapid growth, top management endorsed a decentralized syste
m of operations; department, store, and regional managers were relatively free t
o make their own decisions.14 Moreover, they were eligible for bonuses tied to
the achievement of their budget goals. Thus, decision-making responsibility and
rewards were delegated directly to the front-line salespeople who were closest
to the customer. At the same time, however, such decentralization limited top ma
nagement s control over the application of sales force management systems. Such sy
stems were originally centralized when the organization was much smaller. Withou
t meaningful control over their use, however, these systems which supported sales
force scheduling, compensation, and promotions could be vulnerable to abuse.
Another aspect of the Nordstrom s work environment that had both positive and nega
tive ramifications was the role of group recognition and peer pressure. At month
ly store meetings, managers read aloud customers letters of praise. Sales staffs
responded with applause and cheers. The salespeople who elicited such written pr
aise were honored as Customer Service All-Stars and their pictures were usually di
splayed by the customer-service desk. The All-Stars also received added discount
s on clothing and had their efforts documented in their personnel files.15
The pressure to become an All-Star, however, could result in undesired behavior,
such as sharking the term Nordstrom employees used to describe stealing credit for
sales made by other staff"
"Competition was also promoted on the sales floor via various types of sales con
tests. For example, a free dinner might be awarded to the employee who generated
the most multiple-item sales to individual customers. Such public fanfare helpe
d to keep Nordstrom s sales clerks motivated and its incentive system alive on a d
ay-to-day and hour-to-hour basis. Peer pressure was also strong among management

ranks where an elaborate and very public goal-setting process transpired. Every
year the company s managers gathered in large meetings where they individually pr
oclaimed their store or departmental goals for the next 12 months. Then, immedia
tely following each announcement, the boss of the particular manager stood up to
unveil his or her previously hidden goal for that manager. Again, cheering and
howling was a common accompaniment.
One last ingredient that helped to support Nordstrom s sales force management stra
tegy was the use of automation: salespeople were able to track their performance
on computer printouts available in back offices. The printouts listed individua
l sales by employee identification number so "that clerks could compare their pe
rformance to both their own targets and their peers performance. The ease of acce
ss to such information helped employees at all levels to determine precisely the
ir achievement relative to their peers.
Nordstrom management believed their system worked. The company claimed that empl
oyees earned one of the highest base pay rates in the industry as much as $10 an h
our and especially industrious employees could make as much as $80,000 a year. Mor
eover, Nordstrom s corporate policy of promoting only from within and its policy o
f decentralization combined to give managers unusual freedom to make decisions t
hat would enhance customer service.16
From a Local Union Dispute to Class Action Suits.
In the second half of 1989, the same company policies and compensation systems t
o which much of Nordstrom s success was attributed became the target of a barrage
of employee complaints, union allegations, law suits, and regulatory orders that
tainted the company s reputation and blemished its financial performance. By the
spring of 1990, the escalating accusations and events remained under dispute and
it was not yet clear whether Nordstrom s change of fortune was temporary or long
term.
In the summer of 1989, a discontent minority of Nordstrom s sales clerks chose to
risk their reputation as the most helpful and cheerful in the industry and voice t
heir grievances against the company. Angered by management s actions during contra
ct negotiations, the United Food & Commercial Workers (UFCW) Local 1001 began a
publicity campaign against Nordstrom, challenging the legality of the company s la
bor practices. Local 1001 was based in the state of Washington and represented r
oughly 1,500 of Nordstrom s nearly 30,000 employees. Local 367 represented another
200 sales clerks in the state. The Washington employees were the only unionized
members of the Nordstrom work force; no other Nordstrom employees were unionize
d. "Representatives of Local 1001 complained that the company coerced employees
to work off the clock without being paid.
They maintained that Nordstrom neither r
ecorded nor compensated employees for all the time they spent performing certain
duties that were not directly related to selling such as delivering packages to c
ustomers homes, attending department meetings, writing thank-you notes to custome
rs, doing inventory work, and general bookkeeping. Moreover, the union claimed t
hat Nordstrom s use of sales per hour as a performance measure for determining which
employees were eligible for commissions (versus hourly wages), which were assig
ned the most and best shifts, and which were at risk of being fired implicitly enc
ouraged employees to work off the clock.
In an effort to quantify their claim, Local 1001 s union officials distributed bac
k-pay forms to the unionized sales clerks on which they could calculate and subm
it their individual claims. By late November 1989, the union reported to the pre
ss that they had collected $1 million in back-pay claims from several hundred sa
les clerks.
In November 1989, Local 1001 filed a formal complaint with the Employment Standa
rds Section of the Washington State Department of Labor & Industries. (Exhibit 4
reproduces the Department of Labor summary of the complaint.) At the same time,
members of the union also"
"voiced their complaints through pamphlets, pickets, and the press, demanding th
at management reimburse employees the millions of dollars of back pay which they
were owed.
Nordstrom management denied the allegations and dismissed them as a union ploy to
drum up support for their cause at the bargaining table. (Contract negotiations

had been at a stalemate since July 1989.) A company spokesperson said that the c
omplaints were unsubstantiated and maintained that the company policy had always
been to pay employees for the time that they ve worked. 18
At the same time, the company was also forced to respond to a variety of charges
filed against them by the National Labor Relations Board (NLRB).19
The NLRB
claimed that Nordstrom s bargaining tactics with the UFCW violated federal labor
laws and that management had failed to provide the union with requested wage-rel
ated data and time card records.
The union complaints triggered a three-month investigation by the Washington Sta
te Department of Labor & Industries. On February 15, 1990, the department releas
ed its findings, which concurred with several of Local 1001 s allegations. The adm
inistrative ruling stated that Nordstrom systematically violated state wage and
hour laws in its failure both to record all hours worked and to pay sales clerks
for performing certain services. The state regulatory agency ordered the compan
y to bolster its record-keeping operations, to pay two years of back pay to all W
ashington employees affected by the charge, and to pay employees in the future f
or time spent on such tasks as deliveries, meetings, and writing thank-you notes
. The regulators did not specify the number of employees affected or the dollars
involved in the back-pay reimbursements. (Exhibit 5 reproduces the department s c
onclusions and its order.)
Local 1001 President Joe Peterson estimated that Nordstrom could be liable for a
s much as $30 million to $40 million in back-pay claims from its Washington empl
oyees alone, and for several hundred million dollars if the union followed throu
gh with a nationwide class-action suit on behalf of all Nordstrom employees.20
By mid-February, the union said it had doubled its November back- pay collection a
nd held individual claims totaling over $2 million from roughly 400 sales clerks
in Washington, California, and Oregon. According to media reports, the sales cl
erks who submitted claims worked an average of 8 to 10 hours per week off-the-cl
ock. Peterson asserted, Nordstrom is doing a disservice to its reputation, employ
ees and stockholders by continuing to deny that they have a culture. . . that re
quires employees to work without pay.
"In response, company co-chairman Bruce Nordstrom affirmed management s intentions
to fully comply with the law and to review their record-keeping procedures and pa
y practices for any weaknesses.22
Management announced that it was refinin
g its time-keeping procedures to correct for any shortcoming. But, at the same t
ime, Bruce Nordstrom denied that there was a pattern of abuse "and maintained that
complying with the law would not alter our culture nor affect our continued comm
itment to customer service. 23
As part of their efforts to illustrate their good intentions, Nordstrom manageme
nt vowed to compensate employees for any past errors in its record-keeping and p
ay practices. To do so, they set up a procedure by which all employees nationwid
e could submit claims for back pay. The procedure offered employees the opportun
ity to collect a lump sum payment based on their choice of either length of serv
ice or their own detailed individual claims. In the former case, the payment was
for $300, $700, or $1,000, depending on an employee s length of service. Initiall
y, this back-pay offer was mailed only to current employees outside of Washingto
n because management had to consult the State Labor & Industries Department and
the local union before extending the offer to Washington employees.24 Manageme
nt was also designing a process by which former employees entitled to back pay c
ould collect from the company. To fund the back-pay claims program, Nordstrom vo
luntarily established a $15 million reserve which had a substantial effect on four
th quarter earnings.25
In addition to setting up the back-pay fund, management took steps to improve th
e existing system and restore its integrity. They first sent a memo to employees
detailing company pay policies and reassuring sales clerks that they would be p
aid for all store meetings, inventory work, and deliveries. They also initiated
several procedural changes, including the adoption of sign-out sheets. Under the
new system, sales clerks who planned to do extra work at home or on the way hom
e (i.e., deliveries) could punch out on the time clock at the end of their shift
but also indicate on the sign-out sheet that they were doing work after hours.

The next day they would submit a time sheet showing the amount of extra time wor
ked.
Local 1001 President Peterson argued that this arrangement was placing the burde
n on employees to keep records, when it was Nordstrom s responsibility.26
Peterson
also criticized another Nordstrom policy: the classification of tasks performed
off the sales floor into selling and non-selling activities. By continuing to class
ify certain behind-the-scenes tasks as selling duties, time spent writing thank-you
letters and similar activities would remain in the denominator of sales-per-hour
performance measures. Consequently, Peterson contended, employees would continu
e to feel pressure not to report all their hours spent on these tasks.
"On February 27, 1990, Nordstrom became the target of another unhappy constituen
cy. Immediately after fourth quarter earnings were released, three individual No
rdstrom stockholders filed a suit against the company (for unspecified damages)
in Seattle s King County Superior Court. They claimed to have suffered financial l
osses due to Nordstrom management s failure to disclose adequately their labor pro
blems and the early claims for unpaid work. The suit requested that it be made a
class action suit on behalf of Nordstrom s more than 75,000 stockholders.27
(See Exhibit 6 for a history of Nordstrom s stock price.)
Within a two-day period, Nordstrom became the target of a second class action su
it. On February 28, 1990, UFCW Locals 1001 and 367, together with five individua
lly named plaintiffs employed by Nordstrom filed suit on behalf of approximately
50,000 current and former Nordstrom "employees (union and nonunion) nationwide.
The lawsuit accused the company of numerous violations of state and federal wag
e and hour laws and requested that the King County Superior Court order Nordstro
m to improve its record keeping and award damages equal to twice the amount of u
npaid wages (plus additional damages determined at trial and attorneys fees). Exh
ibit 7 reproduces the union s alleged facts. Union officials had decided to launch t
he suit because they considered Nordstrom s response to the Washington State order
, both the policy changes and the $15 million provision for back pay, inadequate
.28
Reaction to the suit among employees was mixed. Many remained loyal to Nordstrom
and came to its defense. Several employee-organized rallies took place outside
stores in Seattle and California featuring signs and chants such as We Love Nords
trom, My Job is #1, and I Love Being a Nordie. The demonstrators resented the local u
nions assertion that the union spoke for all Nordstrom employees.
Nevertheless, the national publicity elicited by the suit brought into question
the image and systems that Nordstrom s competitors had sought to emulate. Accordin
g to one retail consultant, the company long considered the epitome of retailing
excellence and superior service had actually enjoyed an unfair advantage by not
paying fully for employees work. If the apparent means of Nordstrom s success prov
ed true, he believed, other retailers would probably become less eager to replic
ate the Nordstrom retailing model.
In the spring of 1990, Nordstrom management was defending itself on multiple fro
nts.
First, on March 16, 1990, Nordstrom s lawyers petitioned the court to void the Was
hington State Department of Labor & Industries ruling (dated February 15) on the
grounds that the department s investigation and release of findings had violated N
ordstrom s constitutional rights to due process and equal protection. (The Labor &
Industries Department subsequently filed a counter- claim in defense of its act
ions.) If Nordstrom and the agency could not resolve their differences directly,
the agency would have to take Nordstrom to court to enforce its ruling.
Also, the NLRB maintained their charges that Nordstrom had illegally circumvente
d the union in communicating with its employees. If the agency could not persuad
e Nordstrom to settle out of court, it planned to bring its allegations before a
n administrative judge. "In addition to dealing with state and federal regulator
y agencies, Nordstrom remained embroiled in the dispute surrounding both the sha
reholders and the union s class action suits against it. In May 1990, 60 Minutes, t
he popular CBS news magazine show, televised a 20-minute segment on Nordstrom s in
centive systems and related problems.
According to the assistant director of the Washington State Department of Labor

& Industries:29
We re looking at what is likely to be the highest wage claim in the history of the
state. These are employment practice patterns the company engaged in, not isola
ted incidents."
"The Jury Was Out
In Nordstrom s 1989 Annual Report, released in March 1990, the company s executive c
ommittee summarized its position:
We are disappointed that there is now litigation regarding the payment of retroa
ctive wages and related issues. Our policy has always been to pay our employees
for the work that they perform, and this policy has not changed over the years.
Employee initiative and enthusiasm has always been important in servicing the ne
eds of customers, and we appreciate the efforts of our employees. They are the f
oundation of the Company s success. Some mistakes have been made in compensating o
ur employees, and we are in the process of correcting them. We believe, however,
that our sales employees are the highest paid in our industry. And we also beli
eve that they will continue to provide the customer service that they have becom
e known for because they enjoy selling for the Company and because they are rewa
rded for their efforts through commissions on their sales.
As of April 1990, there were no indications of emerging consensus among Nordstro
m s 50,000 current and former employees as to the seriousness of the problem. Whil
e over a thousand employees had mailed in to Local 1001 back-pay claims (averagi
ng $5,000 each),30 hundreds of other fiercely loyal Nordies came to management s def
ense. Some loyalists expressed their sentiments by signing a petition to decerti
fy the union and some participated in pro-Nordstrom rallies.
Confusion around the merits of Nordstrom s management systems and culture was evid
ent in the contradictory claims of outspoken current and former employees. Some
of these were negative:
We have the sworn testimony of a supervisor. He said it was routine in this depa
rtment that people would come in and do the markdowns in preparation for a sale
on their own time, on their day off, off the clock. If they didn t get it done in
time, he d punish them by not scheduling them to work on the first day of the sale
. This is no petty violation, and it goes far beyond customer service. It goes r
ight down to the core of the business."
"It was like a snake pit. They d throw you into the arena, and the strong would su
rvive.32
*****
The system fosters a lot of pettiness and jealousy. . . . It s fear that provides
great customer service.33
Other comments, however, were positive:"
"I ve never been asked to work overtime or make deliveries or do anything I didn t f
eel in my heart I wanted to do for many reasons. And my paycheck reflects that s
ervice I give. Everything I do, I m compensated for in many, many ways.34
As the crisis escalated, national newspapers began printing letters to their edi
tors which expressed opinions on the Nordstrom grievances. One letter challenged
directly a basic assumption of the union grievance action:
When I worked at Nordstrom s Anchorage and Spokane stores, I was paid to the minut
e for all the time I was in the store as an hourly employee. When I was in manag
ement, I received a salary and bonus structure that rivaled that of many other p
rofessionals. The awards and sales incentives were fair and generous.
The people dismayed with the long hours required do not grasp a fundamental of r
etail: The shopkeeper must be available to the customer at the customer s whim, no
t to suit the employees or owners desires.35
When confronted by reporter Morley Safer during a 60 Minutes interview on the pr
oblem, Bruce and Jim Nordstrom summarized Nordstrom management s beliefs:
The system is to have self-empowered people who have an entrepreneurial spirit,
who feel that they re in this to better themselves and to feel good about themselv
es and to make more money and to be successful. That s the system.
[We have] expectations on our people. And when people apply for a job anyplace,
they want to work hard and they want to do a good job. That s their intention. And
our intention is to allow them the freedom to work as hard as they want to work

"