Sunday, May 11, 2008

An Interesting Union-Managment Agreement

Seiu Eric Fink at Debris Blog has posted on a recent Wall Street Journal story describing an interesting arrangement between the SEIU & UNITE HERE and several employers.  The agreements speak volumes about the current state of unionism in the U.S., as well as the potential for these two unions in particular to create headaches for certain employers.  According to the WSJ:

Two of the nation's largest labor unions have struck confidential agreements with large employers that give the companies the right to designate which of their locations, and how many workers, the unions can seek to organize. . . . A summary document put together by the unions says it is critical to the success of the partnership "that we honor the confidentiality and not publicly disclose the existence of these agreements." That includes not disclosing them to union members.

The agreements involve workers who provide food, laundry and housekeeping services on an outsourced basis. The employers are Sodexho Inc. and the Compass Group USA unit of London-based Compass Group PLC. . . . The unions defend the agreements and their secrecy, saying they've helped workers join unions in growing industries at a time of declining union membership in many sectors. . . . The agreements have "resulted in tens of thousands of workers getting unions" and been a major advance for the labor movement, said the president of Unite Here, Bruce Raynor. He defended keeping them confidential, saying the companies involved insisted on that for competitive reasons. . . .

The SEIU's president, Andy Stern, said the unions sought the agreements after realizing that traditional organizing campaigns at individual sites were proving ineffective. "The old ways aren't working, and we're trying to find different relationships with employers that guarantee workers a voice," he said. He dismissed the idea that the new agreements are undemocratic. "These workers have no unions; that's where we start from," he said. In 2005, the SEIU and Unite Here created a partnership to represent workers that provide food and housekeeping services. Then they approached the companies individually. Since 2005, the unions have organized about 15,000 workers at Aramark, Compass and Sodexho, which collectively employ more than 300,000 people in North America, according to an SEIU spokeswoman.

A key question in the agreements is determining at which sites a union can organize. Unite Here's Mr. Raynor said specific sites where unions can organize are selected jointly by the companies and the unions. The agreements reached with Sodexho and Compass in 2005 give the companies "the right to designate the sites" where unions may try to organize workers, according to a confidential summary of the agreements reviewed by the Wall Street Journal. The companies wouldn't comment on how locations were selected for organizing. The agreements, which expire at then end of 2008, stipulate the number of employees that the unions can try to organize: 11,000 Sodexho workers and 20,000 Compass workers.

The unions gave up the right to strike and to post derogatory language about the companies on bulletin boards. With Compass, the unions agreed to these restrictions "anywhere in the world." In exchange, the companies agree not to oppose union organizing at the designated locations. But limits are also set. "Local unions are not free to engage in organizing activities at any Compass or Sodexho locations unless the sites have been designated," says the confidential summary. Mr. Stern said that if workers wanted to join a union at a location the companies had ruled out, having these agreements would enable a union to negotiate on the matter. "If workers want a union we can discuss that," he said. "Trust me, a lot more workers are coming in than being excluded by the agreement." . . .

The SEIU has added more members in recent years than any other labor union. But resentment against Mr. Stern has been building among some in the union, who see him as too close to management and too insistent on centralizing power. Some argue that the SEIU is adding new members at the expense of current ones.

Eric wondered whether these agreements were lawful.  I'll admit that I can't think of any past case that is on point (I'd be interested to know if others have).  My general sense is that they're lawful.  Although I could construct an argument that the agreements violate Section 8(b)(1)(A) by interfering with employees' Section 7 rights, I wouldn't want to argue it in court.  Unlike a case like Magnavox, where an incumbent union agrees to restrict employees' ability to discuss union matters, these agreements exist at workplaces with no unions and do not change the status quo.  Perhaps more important, no union has a duty to organize a certain workplace.  It's not unheard of for a small unit to unsuccessfully seek representation by a union and this seems no different.  In sum, you can argue the wisdom of these agreements and whether the unions are selling out some employees for others, but I don't think they're illegal.

For what it's worth, I'm sympathetic to the unions' strategy here.  I doubt that Stern and Raynor view this as the ideal situation, but American unionism is in such dire straights, I find it difficult to fault them for expanding their membership by making strategic agreements with employers.  But, I'm generally pragmatic and have no doubt that I'll be hearing from others with a different view (I hope so!).

Finally, kudos for Robert Bruno (Univ. Illinois--Chicago) for his quote in the WSJ article.


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Jeff is probably right about the legality of the agreements, but they pose significant risks. It would be all too easy for the employers to cross the line to help one union or to discriminate against another.

The risk almost came to pass recently in Ohio when SEIU was about to have a sweetheart election at one medical facility. Its dissident West Coast group, NNA/NNOC, showed up with a lot of anti-SEIU literature. Apparently that was enough to make some of the employees back away from SEIU. (Competition has a way of making people consider their options, which is of course why SEIU didn't want any). Had the employer gone just a step further under the agreement, it would have found itself with an unfair labor practice charge.

In the event, SEIU gave up the sweetheart election. Instead, it went around attacking CNA/NNOC as "union busters." It even went so far as to bring in busloads of SEIU members, organized by SEIU staffers, to try to crash a dinner at the recent Labor Notes convention, thereby giving itself a very bad image among many unionists who knew nothing of the internal SEIU split. (The videos of the battle are all over youtube.) But that's another story. . . . The point is that facially legal agreements like these could nevertheless cause problems.

One related question that I haven't seen answered is why the employers would agree to these proposals. Perhaps they so limit the union that they make economic sense (give up a small minority of the employees and the union will promise not to organize the vast majority). I had thought it might be because the employers feared that the union had enough clout to win major organizing campaigns, but if that were true, then why would the UNION agree to limit itself? If John Raudabaugh reads this post, perhaps he can suggest another reason.

The precedent is not encouraging for unions. Many years ago, when the textile workers finally succeeded in organizing a couple of J.P. Stevens plants (with the help of big contempt penalties enforced by the court of appeals), the union was so weak that it signed an agreement promising not to organize any other plants. As a result, the union had no negotiating leverage (Stevens could make its product in its nonunion facilities) and never organized another Stevens facility.

Posted by: Dennis Nolan | May 11, 2008 6:44:05 PM

Glad to have Jeff's perspective on this. I suspect he's right about the legality, though this seems different than a union merely exercising its prerogative to decide not to organize a unit.

As for the strategic value, I'm still skeptical. The argument in favor implicitly presumes that fewer workers would be organized without these agreements, so the trade-off is worthwhile. But that premise raises a question. Presumably, the employers believe there's some value in bargaining for the ability to declare certain locations/workers off limits. But if the agreements result in more organizing that would occur absent the agreements, what's in it for the employers?

Posted by: eric | May 11, 2008 7:31:54 PM

"But if the agreements result in more organizing that would occur absent the agreements, what's in it for the employers?"

Avoidance of an obnoxious, dishonest, and probably unlawful corporate campaign.

Posted by: Mike | May 12, 2008 5:54:25 AM

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