Sheila Payne stands outside a Whole Foods Market in Durham, N.C. She hasn''t come to shop--she and three other activists are informing customers that the nation''s largest chain of natural food groceries has refused to sign a pledge supporting better wages and working conditions for California strawberry pickers, an industry centered in the Watsonville area.

All across the country are customers who are stunned to learn that Whole Foods won''t endorse the pledge for improved conditions, which has been signed by supermarket giants like Safeway and Lucky, along with most of the nation''s leading environmental and civil rights organizations.

Tim Gates, manager at the Monterey Whole Foods store, says the store''s policy "is set nationally." He points out the company "believes in organic farming" and actively supports small growers and sustainable agriculture through its purchasing policies. "But the UFW is trying to organize the farmworkers, and the farmworkers have said, we don''t want to be organized," he says, adding, "We''re not saying they don''t have the right to organize."

Faced with pressure to sign the pledge, Whole Foods responded by holding a "National 5 Percent Day" to donate $125,000 of its sales to organizations providing health care to farmworkers. But at stores across the country, the company also distributed a brochure supporting the industry and attacking the United Farm Workers, which drafted the pledge. Top executives make no secret of their opposition to the UFW--and to all labor unions.

Giev Kashkooli, national public action operations manager for the UFW, says Whole Foods was not the only store to refuse to sign the strawberry workers'' pledge, but it was the most disappointing hold-out. "The pledge is just symbolic, but we felt it''s important for stores to state publicly where they stand," he says. "Given Whole Foods'' image as a store that is socially responsible, many of its customers, who are also our supporters, were disappointed."

But Todd Loomis, former owner of The Granary in Pacific Grove and now an independent consultant to Whole Foods, says it''s short-sighted to focus on the company''s union stance. "The company is dedicated at the local level to working with farmers and farm laborers," he says. "The company is not willing to get involved in other people''s labor disputes. What the company does is more the point than what they don''t do."

In response to the UFW pledge drive, Whole Foods distributed a brochure at its stores across the country attacking the UFW and siding with the strawberry industry. The brochure noted that federal and state laws require farms "to pay minimum wage, unemployment insurance, and provide a clean working environment," and assured customers that "most large growers comply with the laws and go further by offering health insurance to their workers."

After several months, Whole Foods pulled the anti-union brochure from its stores and replaced it with a milder version. "Admittedly the tone in the first one was a little off-base," says Peter Roy, president of the company. "I probably wrote that at a point I was wanting to fight back."

Whole Foods has taken a similar hard-line stance against environmentalists working to protect sea turtles. An estimated 150,000 endangered turtles drown in shrimp nets each year, according to the Earth Island Institute, a San Francisco-based organization that led the campaign for dolphin-safe tuna. But when the group approached Whole Foods about carrying shrimp caught in nets certified to protect sea turtles, Whole Foods Chief Executive Officer John Mackey once again sided with industry and blasted the activists. "We will not be coerced by Earth Island Institute or anyone else to support advocacy programs against our will," Mackey e-mailed the group. "Your attacks on Whole Foods Market are strategic mistakes."

Earth Island has responded by picketing Whole Foods stores in California, Texas and Delaware. "I thought this would be right up their alley," says Todd Steiner, who directs the sea turtle program. "They claim to be really progressive, but their seafood counters are a big part of their profit margin. They''ve determined that this won''t help their bottom line--and their bottom line is more important to them."

Such an anti-activist attitude puts Whole Foods at odds with many of its customers, who believe that organizations like the UFW and Earth Island represent important forces for social justice and ecological well-being. People shop at Whole Foods not just because it offers organic produce and natural foods, but because it claims to run its business in a way that demonstrates a genuine concern for the community, the environment and the "whole planet," in the words of its motto.

Love, Joy and Happiness?

Whole Foods prides itself on being a different kind of grocery store. The company promotes organic farmers and educates consumers about agriculture and nutrition. It donates 5 percent of its after-tax profits to community organizations each year. It fills full-time positions only by a two-thirds vote of workers in the department that''s hiring, and fosters a diverse workforce that employees say is fun, friendly, and accepting of a wide range of lifestyles. In January, Fortune magazine named Whole Foods one of "The 100 Best Companies to Work for in America."

Much of that philosophy stems directly from Mackey, who opened a struggling health food store called Safer Way in Austin, Texas while in his 20s. In 1980, he got together with Craig Weller and Mark Skiles, owners of the Clarksville Natural Grocery, to open Whole Foods Market in Austin, the country''s first natural foods "supermarket."

Whole Foods'' fortunes took off slowly, and then soared. By 1988, they had just five stores, all in Texas. In 1988, they bought Whole Food Company in New Orleans and Mackey renamed his company Whole Foods Market, Inc. In 1989 the first California store opened, in Palo Alto. In 1992, Mackey bought out the third-largest natural foods chain, Bread & Circus, which was based in New England.

Thus began Mackey''s acquisition spree and the company''s development into what Time magazine calls "a billion-dollar juggernaut." Whole Foods now has 86 stores in 19 states, including its newest store in Del Monte Center, Monterey. Ten more will open next year, including the first stores in Georgia, Washington and New Mexico, and nine more are scheduled for 2000. The company has acquired Fresh Fields, Mrs. Gooch''s, Wellspring Grocery, Bread of Life and the Merchant of Vino chains, and has its own coffee company, vitamin company, bakeries, seafood wharf and "in house" line of food products.

According to the business press, Whole Foods sales in the last quarter alone shot up 25 percent to $325 million. The chain has grown 900 percent in the 1990s, and some analysts predict it will continue to grow 25 percent annually for the next five years.

Union Busting

However conventional his approach to growth, Mackey insists he has created an unconventional workplace. "Just as we are dedicated to providing excellent products and services to our customers, we are also dedicated to creating a positive, productive and enjoyable work environment," Mackey writes in the employee handbook. To promote participation, Whole Foods urges employees to think of themselves as "team members." Workers elect representatives to an advisory group, meet monthly to discuss concerns, and are invited to share their opinions with store managers and regional executives.

But when it comes to workers organizing themselves, Mackey sounds every bit the boss. He calls unions "parasites" that "feed on union dues," and compares them to "having herpes. It doesn''t kill you, but it''s unpleasant and inconvenient and it stops a lot of people from becoming your lover."

Whole Foods has repeatedly backed up its anti-union rhetoric with union-busting action. In 1988, the company refused to honor the United Farm Workers grape boycott and had union picketers at its Austin store arrested. In 1991, Whole Foods was forced to reinstate an employee in Berkeley after she filed a claim with the National Labor Relations Board saying the company had fired her in retaliation for her pro-union statements. Last November, the company bought two Westward Ho stores in the Los Angeles area and promptly replaced 70 union workers with non-union employees.

Whole Paychecks?

The conflict over strawberry workers came at a time when some Whole Foods employees were expressing strong dissatisfaction with their own wages and working conditions. Both wages and staffing levels are driven in part by a Whole Foods incentive program called "gain sharing." Under a complex formula, each department receives a monthly labor budget and sales goals set by management. If a department meets its goals without spending all of its budget, part of the savings is divided up among employees. The idea is to give employees an opportunity to increase their take-home pay by working more efficiently, giving them a vested interest in the performance of their entire team.

In reality, however, gain sharing winds up varying widely between departments: Those with smaller staffs and more profitable products, like vitamins or meat, tend to fare better than larger units like the kitchen or cashiers.

The wage situation is different in California. Nationwide, the typical Whole Foods employee earns an average of $20,600 a year. But each region has the power to set its own pay scale, and wages in the Northern California region are significantly higher than the rest of the country, reflecting our higher standard of living. Regional vice-president Will Paradise, who works out of the company''s San Francisco office, says employees in our region average just under $25,000 a year in straight salary, not including gain-sharing and other sales incentives.

Paradise says that while new employees with no job experience may receive $6.50/hour, new hires with two years'' experience typically start at $10-$12/hour. When you factor in the other benefits, Paradise says the Whole Foods employee package compares favorably with those offered employees at competing food retail stores.

Others disagree, saying that workers at local unionized supermarkets enjoy better wages and benefits. John Briley, president of Local 839 of the United Food and Commercial Workers union, which represents employees at Safeway, Nob Hill, Lucky, Albertson''s and Monte Mart stores in Monterey, Santa Cruz and San Benito counties, says that according to a newly ratified contract, the hourly wage of journeyman food clerks at these stores will be increased to $16.53 in November. That works out to $34,390/year for a regular fulltime position.

Still, many employees at Monterey''s Whole Food store say money isn''t the only issue, and that work conditions at Whole Foods are so much more pleasant than at these other supermarket chains, they wouldn''t consider switching (see accompanying article).

Workers at some Whole Foods stores have talked openly about joining a union. Labor organizing is a right protected under federal law, and Whole Foods says its employees are free to join a union if they choose.

At one Whole Foods store, though, workers say talk of organizing came to an abrupt halt when the company eliminated the job of an employee who raised concerns with top executives. An employee who talked with co-workers about the benefits of organizing was approached by a manager. "The word''s getting around you''re talking about a union," the manager said. "You better knock it off. John Mackey hates unions."

Additional local reporting by Sue Fishkoff

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