Wheatsville's Frustrated Employees Call for Change

After two decades in the driver's seat at one of Austin's most iconic local businesses, last month Dan Gillotte resigned as Wheatsville Co-op's longtime general manager amid fallout from his song and video "Condoms Over Combs: White Girl Showing Black Dude Around the Grocery Store." While many who have viewed the video feel the song is stupid, not everyone sees it as racist – the lyrics apparently narrate a real experience at a co-op in another state – and even former employees critical of Gillotte have vouched for his non-racist views.

Nevertheless, after growing media attention to the video, a petition calling for his ousting and complaints brought to the co-op's board of directors, Gillotte's career at Wheatsville – already marked through the years by persistent complaints from employees – is over. Yet current and former Wheatsville staffers have shared their frustrations with the Chronicle recently about what they see as significant mismanagement and toxic working conditions that remain entrenched in Wheatsville culture. Most requested anonymity due to fear of retaliation.

The issues they raise are similar to those covered by the Chronicle in 2015, and indeed shared with the paper before that – an on-going theme in the 40-plus-year history of the co-op, whose stated mission is to promote a society based on "cooperation, justice, and non-exploitation." In addition to a toxic workplace culture, they express concerns about Wheatsville's commitment to the core elements of its vision – both as a cooperative enterprise and as a locally anchored business with Austin values. During this time of transition, they question whether Wheats­ville is ready to truly move forward.

Frustrations Abound

Just a few days after Gillotte resigned, this reporter met with a group of two former and four current Wheatsville employees, averaging five years' tenure in a variety of roles. They, along with another former employee of 11 years who we interviewed, agreed Gillotte should be gone for reasons that have little to do with his dumb video. They allege he enabled a culture of retaliation and ignored rampant staff dissatisfaction to protect himself and an inner circle of managers. However, the group also told me they expect many problems to continue under these same managers – now the interim leadership of the co-op – and the Wheatsville board of directors. They reached out to the Chronicle beginning earlier this year, saying they have tried internal solutions to no avail.

I also spoke with Bryan Butler, a former Wheatsville employee and board member who is now an owner of Salt & Time and Salumeria, and Johnny Livesay, a former Wheatsville employee and board member who helped found Black Star Co-op. Butler said that while he learned a lot during his years at the store, he saw many of these same issues and hopes Wheatsville can turn things around. Livesay said he had a mostly positive though "mixed" experience from 2002 to 2010, but never witnessed intentional retaliation.

All other current and former employees I spoke with described a tense and difficult working environment with high turnover. They say that despite the co-op having an internal "go direct" policy, management often refuses to meet with staff – while also reprimanding employees for not "going direct" to discuss unclear or contradictory communications and policy changes. They recount being told to stop complaining and "choose your attitude," and being unable to meet with management on important customer-facing issues so as to avoid "a bitch-fest."

The culture of retaliation at Wheatsville, as told by the employees, manifests itself throughout the workplace. Hiring and compensation decisions, staffing assignments, relationships with suppliers, and steps taken (or not) to protect workers from harassment by colleagues or customers are all influenced by managers' favoritism, resistance to feedback, and unprofessionalism. According to the group, one employee was fired a week after he offered to pay the co-op membership fees for co-workers so they could attend the board meeting focused on Gillotte's fate. Butler said he saw co-workers assigned bad shifts and given responsibilities that they weren't trained for once they got on a manager's bad side.

None of this, of course, is unique to Wheats­ville, but employees, customers, and owners alike have reason to have higher expectations of the co-op. "What Wheatsville is supposed to be about," Butler said, "is that we're smart enough and educated enough to work our way through issues and transform societies – as our root mission. But that was all just smoke and mirrors." Livesay describes Wheatsville's management team as "not compassionate" and found most of the allegations raised by the employees unsurprising.

When I reached out to interim management, they declined a phone interview and agreed to only a "store tour and chat" and to respond to questions via email. Shortly after I emailed them, they canceled my tour, saying their initial offer "was made in the spirit of helping you tell a professional and factual story." They then declined to answer any of my questions, address any of the accusations, or respond to any fact-checks. They later emailed to say the co-op has a written process that encourages employees to report discrimination, harassment and retaliation, and other concerns, and that staff surveys indicate satisfaction with this process. They also said they wouldn't participate in an interview in order to "not violate employee trust or the legal necessity of confidentiality."

The Workforce and the Board

A few years ago, Wheatsville implemented a living wage policy for its workers. According to the group, this has resulted in fewer people being hired, leading to overworked employees unable to take scheduled breaks and some being reprimanded for requesting overtime. Merit raises have gone away, and wage caps at certain hourly rates preclude some employees from receiving across-the-board cost-of-living raises. Wheatsville's new auto-ordering system, implemented "chaotically" with many technical issues according to the employee group, replaced higher-paid "buyer" positions. The group said because the system is so glitchy, workers are still fulfilling buyer duties at lower wages. "They continually try to find ways to squeeze more labor out of people without paying more, all while disrespecting the work they do by refusing to call it what it is," said a former worker.

In June 2019, Wheatsville unveiled a new attendance policy in which an employee is fired for missing four days in a quarter – even if those days are scheduled and approved paid time off. Being 10-120 minutes tardy, for whatever reason, counts as half a day; the only time this policy is waived is if workers can find colleagues on their own to cover their shifts. The group said this makes employees scared to call out sick and suspects the policy is a tool "to clean house."

Dan Gillotte in 2013 (Photo by John Anderson)

At many businesses, chronic employee dissatisfaction with unaccountable management would eventually get handled by the owners – which, in Wheatsville's case, are 22,000 strong and include many reading this – who elect a board of directors to represent them. Board members did not respond to the Chronicle's repeated interview requests. Employees say they have gone to board members directly with issues for years, attempting to circumvent Gillotte and his control of information presented to the governing body, which Butler says may have contributed to the board's complacency. The employee group that contacted the Chron­icle said they have received only a template response after reaching out to the board.

According to one board member's 2015 resignation letter, she was reprimanded by her colleagues for meeting with staff. "The board has received numerous private communications from staff displaying evidence of cronyism, negligence, incompetent or retaliatory management practices, and more," reads the letter. "Despite the relevance to our core business, the board has consistently ignored requests to come to a deeper understanding of staff dissatisfaction."

Corporatizing the Co-op?

The employee group that contacted the Chronicle criticized Wheatsville's extensive involvement with the National Co-op Groc­ers Association, a co-op of 145 retail food co-ops across the country. NCG, whose board Gillotte chaired until his resignation, receives annual dues and a percentage of sales from Wheatsville (about $36,000 in 2017-18). The group, as well as an NCG business partner, describe it as a "virtual chain," and it is thus developing a bad reputation among those who yearn for that grassroots and unique local co-op feel of the earlier days.

Being an NCG member gives Wheatsville access to group discounts and national purchasing and promotional programs, which means the Austin stores have come to rely on NCG branding, trainings, and staff resources shared with many other co-ops. Butler says that while NCG's involvement helped increase Wheatsville's sales during his time there, it created an "extremely corporate" operations environment, from the way meetings were run to managers' terminology and strategies, reminding him of his stint at a Walmart Supercenter.

One controversial aspect of NCG is its lucrative deal with United Natural Foods Inc., a publicly traded corporation with $10.2 billion in annual revenue that has bought out many smaller distributors. The contract makes UNFI the main wholesale distributor for all NCG member co-ops, allowing them to get UNFI products at lower prices, which can be beneficial. But a current Wheatsville employee said that management is trying to make local vendors switch to using UNFI as their distributor. "Some of these vendors were then dropped because they couldn't make the change," the employee said. (Livesay and Butler said the store still carries a good amount of local products.)

A group based in Santa Fe called Take Back the Co-op, formed to oppose what it saw as "corporate takeover" of its local food co-op, says a related group called CDS Consult­ing, now called Columinate, also pushes co-ops to sell UNFI products over local goods. The Take Back the Co-op website (www.takebackthecoop.com) details how CDS/Columinate allegedly encourages boards and general managers to depend upon it for hiring decisions as well as governing advice and materials. While Wheats­ville management wouldn't respond to questions about its current relationship with the consultancy, CDS played a major role in revising the co-op's bylaws and articles of incorporation in 2007 and 2008. Rose Marie Klee, who has been Wheatsville's board president for 12 of the last 14 years, is a paid consultant for CDS/Columinate, according to its website.

NCG, meanwhile, owns a subsidiary that advises and encourages co-op development and expansions – sometimes for failing stores that NCG then purchases – as well as a bank that offers loans to these co-ops. Though management also wouldn't respond to questions about Wheatsville's financial situation, and its annual reports omit much of the information that helps one assess a company's financial health, a review of past annual reports shows that Wheatsville received millions of dollars in loans from NCG's bank for its "refresh" of the Guada­lupe store and its second location on South Lamar.

Though the interest rate on these loans wasn't disclosed, according to Wheatsville's most recent annual report the co-op refinanced the NCG bank loan in 2016 with another lender "at much better terms." The South Lamar location, which opened in 2013, seems to be successful, but the Guadalupe location is continuing "to have negative year over year growth." Though the report states that the co-op's finances are in "fine condition," interim management recently told staff it has "much work ahead ... to move the co-op toward critically needed improved financial performance."

Don't just pack your yams and go! One employee tells us "I really want to have a wake-up call to our owners" – Wheatsville's 22,000 co-op members – "to be more engaged ... paying attention, asking questions, showing up to board meetings." (Photo by John Anderson)

Looking for the Way Forward

A few days after meeting with the employee group, I asked a close friend about her time at Wheatsville about six years ago to see how her experiences compared to the others, who she doesn't know. "Employees buy into the idea of a co-op – it aligns with so many good-hearted people's values," said Olivia Radke, now a senior customer service manager for Under Armour. "But then on the inside, it's extremely demoralizing." Livesay suspects that some co-ops, like Wheatsville, run into problems because they hold themselves to such high ideals while recruiting and attracting workers who value that ethos. But then the reality of running a retail business can be harsh.

The group says that moving forward, they'd like to see the co-op hire a new general manager who is local, an owner, and knows the community. Butler, meanwhile, thinks hiring somebody with extensive grocery experience could be a good route. They also stressed the importance of having significant changes with management and the board, as well as owners. "I really want to have a wake-up call to our owners to be more engaged," said one current employee and co-op owner. "Whenever we have our board elections – we have 22,000 owners – and apparently less than a thousand end up voting. I want to see our owners paying attention, asking questions, showing up to our board meetings."

I couldn't help but ask the group's current employees: Why stay at the store if it's so bad? Though some are considering leaving, they also said the imperfect benefits are better than some other service industry jobs in Austin and spoke of strong friendships with many customers and co-workers and the importance of supporting Wheatsville's community mission to "be at the forefront of a transformed society that has a thriving community centered on hospitality, kindness, and generosity."

"We really are one of the last local grocers that is supposed to be about the community," said a current employee. "I don't want to give up on that. This is a special institution here in Austin. That's why it's so important to keep fighting."