Theo makes some damn fine chocolate, but at $4 for a three-ounce bar, it's not an everyday extravagance. Still, the premium price buys more than just a better-tasting chocolate.

Seattle-based Theo Chocolate proudly touts its social conscience, promoting its products as both organic and "fair trade." That "Fair for Life" logo must account for something, right?

According to a new report alleging union-busting at Theo's Seattle factory, not all that much.

"Fair trade should mean fair trade for all workers," says Brenda Wiest, a union organizer for Teamsters Local 117. "If I'm going to pay $4 for a friggin' chocolate bar," Wiest admonishes, "then some of my four bucks should go back to the workers here in Seattle."

The dispute stems from a 2010 attempt by Theo workers to unionize. Labor organizers claim Theo management countered with a campaign of hostility, intimidation, and retaliation. Theo management would not comment for this story, but in a statement CEO Joe Whinney categorically denies these allegations, dismissing much of the report as "sensational" and its methodology as "fundamentally flawed." It's a classic "he said, she said." But what seems clear from the claims and counterclaims is that a union-organizing effort that started with majority support from eligible workers quickly fell apart in the face of opposition from management—opposition that was counter to the spirit of the fair-trade movement.

"This is about Theo claiming to be fair trade," says Wiest, when they're really just "selling consumers a bill of goods."

According to an October 2012 report issued by the International Labor Rights Forum (ILRF), a Washington, DC–based pro-labor advocacy group, the troubles started in 2009 when Theo signed a distribution contract with Whole Foods, a deal that required a substantial increase in production at its Seattle plant. The report alleges that accelerating production resulted in several injuries and deteriorating working conditions (in a statement posted to the Theo website, Whinney counters that only one injury claim was filed with the state Department of Labor & Industries in all of 2009). According to the report, 12 workers decided to explore the prospect of forming a union, an action they believed to be consistent with Theo's avowed commitment to fair-trade principles. The workers approached Teamsters Local 117 for help and advice.

Over several meetings attended by more than half of Theo's non-management employees in February of 2010, workers reportedly shared their grievances, including safety concerns, onerous workloads, short notice for shift and furlough changes, mandated overtime (Whinney insists overtime was always "optional"), and the suspicion of wage discrimination against non-English-speaking workers.

And "a dental plan," emphasizes Wiest. The most concrete monetary benefit that Theo workers wanted, says Wiest, was "access to affordable dental insurance." Not an unreasonable demand for workers at a high-end candy company. By early March of that year, 19 of the 30 Theo workers legally eligible to form a union had signed cards authorizing union representation.

That's when the chocolate hit the fan.

According to the ILRF report, Theo managers responded with a campaign of "emotional manipulation, guilt, [and] intimidation," confronting union supporters and disrupting organizing meetings. Then Theo brought in the big gun, hiring David Acosta from American Consulting Group (ACG), an out-of-state firm specializing in "union avoidance strategies," whose website boasts of "unparalleled success in designing preventative programs that continues to keep thousands of our clients union-free."

Whinney says that Acosta was merely hired to answer workers' questions, and claims to "have no visibility into whether Mr. Acosta has ever been affiliated with ACG." Wiest says she is well familiar with Acosta, having faced off against him in previous unionizing efforts.

The report claims that over the next few weeks, managers allegedly engaged in what workers described as "emotional blackmail"—sometimes crying in front of workers, sometimes angrily accusing organizers of selfishly hurting the interests of the poor farmers who supplied Theo with its cocoa. "You can't imagine how hard life is in Africa—your situation pales in comparison to theirs," the report quotes one senior manager telling a union supporter.

"There was a lot of crying," says Wiest. She had warned workers to expect such tactics, but most thought that Theo would welcome the union. By summer, the report alleges, several union supporters had quit.

Whinney strenuously denies any accusations of discrimination or retaliation, and he points to an October 2010 letter signed by Theo employees denying the criticisms later laid out in the ILRF report and stating that "the majority of us were not interested in a Teamsters union." But that was after eight months of anti-union agitation. "Theo could have voluntarily recognized the union" after a majority of workers signed union cards in March, Teamsters spokesman Paul Zilly explains. "Instead, the company hired a known union-busting law firm and cracked down on union supporters."

"There's nothing they can say in response to the fact that they hired an anti-union consultant at $300 an hour," says Wiest. I e-mailed Theo vice president of sales and marketing Debra Music to "confirm or deny that Theo opposed the unionization effort, and that management hired David Acosta to assist with the company's union avoidance strategies." She did not respond.

And that gets to the heart of the Teamsters/ILRF complaint: that Theo mounted a union-avoidance campaign in the midst of its "fair trade" certification process. At the time it certified Theo as "Fair for Life," the Institute for Market Ecology's own standards explicitly recognized the right of workers to "form a trade union of their own choosing and to bargain collectively."

"If you won't even apply the international standard of freedom of association to your own workers in the United States," asks Wiest, "what does fair trade mean for your company?"

Not nearly as much as customers shelling out $4 for those "fair trade" chocolate bars might think. recommended