Monday, March 15, 2010

International


10/02/2009
 

The High Price of Cheap

German Discount Clothing Chain Exploits Staff and Suppliers

By Nils Klawitter

Part 4: Snooping into Employee Histories

For example, in an unsavory practice that made headlines in May, Kik continues to use the credit agency Creditreform to snoop on the creditworthiness of its employees.

According to a Kik spokeswoman, the company is no longer systematically gathering information on its employees but rather only in cases where there is a legitimate interest. However North Rhine-Westphalia's data-protection commissioner remains unconvinced of the legality of the company's appetite for information. In fact, she has filed an official complaint that has led the state prosecutor's office to launch an investigation into the matter.

In an internal e-mail from last May, the company justified its queries, saying that they would serve to "protect employees." The idea is to prevent people with negative marks on their credit histories from being given positions in sensitive areas, such as the checkout lane. Given the widespread reports of spying and eavesdropping by Lidl and Deutsche Bahn, Germany's national railway operator, Kik has been quick to distance itself from "the scandals of the competition." In any case, the company denies that it conducts regular, across-the-board inquiries into its employees.

But a different message was conveyed in an internal memo to all district and sales managers dated Jan. 4, 2008, informing them that Creditreform offers database checks that allow the company to "inquire about every active employee and, thereby, also identify possible negative characteristics among long-term employees." Rather than "protecting employees," that sounds a lot more like searching for reasons to fire them.

The company stated in the memo that, as of Jan. 7, 2008, "all employees on the payroll will be automatically" checked four times a year. The memo also indicates that, at least until early 2008, all job applicants were screened before being hired. Over roughly the past 18 months, Kik has contracted Creditreform to conduct 49,000 credit checks. But the company has declined to comment on this and many other issues.

On Internet forums, dozens of employees at Kik and its spin-off Tedi -- a low-end discount chain also founded by Heinig -- have reported being interrogated by supervisors, forced to conduct unpaid nightly inventory counts and subjected to high levels of psychological stress.

Moreover, they have also complained of unbearable working conditions. When it comes to air conditioning, for example, Heinig is proud his stores don't have it, claiming that a/c units are far too expensive. But a Tedi team leader from near Aachen says that, on hot summer days, she can hardly breathe when she enters the store in the morning. She says the air is stale and smells slightly sweet, and that the first thing she does is drag the rack with the plastic clogs outside in front of the store. Likewise, only a year ago, the environmentally oriented consumer-testing magazine Öko-Test reported on the dangers of high concentrations of plasticizer in a wide range of similar products -- of which there are large quantities at Kik.

Lip Service

Whenever any doubts arise about the quality of its products, Kik proudly refers to its own quality-control unit in Bönen. With its staff of 30, this department is charged with proving just how seriously Heinig takes the company motto, "the customer is king" ("Kunde ist König"), whose initials lend the company its name. But for Kik customers, it remains to be seen whether the ultimate price they pay will be much higher than what they handed over to the store's cashier.

As one former employee describes it, Kik's quality control unit was nothing more than a "lip service department." Granted, products were tested for their tear resistance and color fastness. But there were also some produces that were explicitly not tested, such as the red employee shirts that caused a number of people to break out in a rash.

A number of Kik products can also be found on the RAPEX list, a kind of EU rapid-alert system for dangerous consumer products. For example, just last August, there were warnings about women's jeans that had been treated with too many chemicals. A week before that, there were felt-tip pens laced with benzene. And, in February, Kik recalled baby bibs that could lead to "health impairments."

But when things go wrong, the company prefers to handle things its own way. Whenever there is yet another imminent risk, the branch employees are warned in the morning via the cash register system. "Attention!!! Attention!!!" is printed at the top of the cash register slips. This is followed by brief directions in Kik's typically officious tone. It might have to do with defective crayons or a pearl on a bra. Sometimes only individual components, but often entire products, have to be immediately removed from the shelves. Employees are usually ordered to "urgently" dispose of the products "outside their stores." A former employee says that Kik does this in an attempt to avoid having to properly dispose of "problematic" refuse.

One such warning concerned tainted animal food for Australian parrots and pygmy rabbits. In this case, according to the warning on the cash register slip, it was imperative to act swiftly: "These instructions must be carried out immediately and completely." Still, Kik rejects all allegations of improper disposal. The company says that there is no waste or quality problem and that the responsibility is not shifted to the employees.

However, it appears that even Kik's managers have realized that something is not quite right in their own system. On the cash register slip, it said that the animal food problem was urgent "because we expect external product checks."

Translated from the German by Paul Cohen

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Graphic: Growth in Kik sales



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