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CHICAGO -- CtW Investment Group, a branch of Change to Win, a coalition of labor unions, is urging the board of directors at Whole Foods Market, Inc. to immediately name an independent chairman "who can quickly establish credibility with regulatory authorities and shareholders."
According to a report in the Wall Street Journal, the investment group, which is affiliated with union pension funds, wrote a letter yesterday to John B. Elstrott Jr., the lead independent director at Whole Foods, asking for John Mackey to step down as chairman of the natural-foods chain, as it comes under investigation for anonymous comments Mackey posted on Internet stock-market forums.
Union pension funds affiliated with CtW own some 900,000 shares of Whole Foods, according to the letter. That's less than 1 percent of the Austin, Texas-based company's outstanding shares.
Whole Foods' board said last week it had formed a special committee to launch an internal investigation into Mackey's online statements, which, among other things, touted Whole Foods and put down his rivals.
The U.S. Securities and Exchange Commission has begun an informal probe into the matter.
The investment group said even if Mackey didn't violate the law or the company's code of conduct, however, his "poor judgment has already damaged his credibility" and jeopardized the company's proposed purchase of rival Wild Oats Markets, Inc. It said the creation of a special committee alone is “not sufficient to restore investor and regulatory confidence in the company and its management."
Labor unions have historically been critical of Mackey, as he has opposed efforts to organize workers at Whole Foods stores and criticized the broader labor movement.