Austin Legal Labor Relations Newsletter #6

Welcome to The Labor Leader – a weekly recap of the most valuable content on labor relations from an employer’s perspective. The National Labor Relations Act covers both union and non-union private-sector employers. This newsletter is a digest of my views on labor laws, the National Labor Relations Board, and unions.

______________________________

The Way Unions Organize has Changed Forever. So Too has the Face of Union Membership.

Workers are organizing unions at small and medium size businesses much quicker than at large ones.

But the large ones get all the media’s attention. And workers at other companies are following suit.

Apparently, no one wants to hear about unions at the local mom & pop store, the corner auto body shop, the neighborhood restaurant, or the company that employs most of the people in town.

Way more unions are organizing those places than behemoth, multi-site, international tech giants.

It’s a lot easier to get 3 out of 5 mechanics, or 17 out of 35 grocery workers, or 41 out of 80 press operators to vote in favor of a union than to get 251 out of 500 warehouse employees to do the same.

This is partly why Starbucks union organizing has gone rampant.

Even though Starbucks has nearly 140,000 employees (down from pre-Covid 350,000) in over 30,000 stores throughout the world, it operates like a local, corner coffee shop with about 20 employees per store.

Labor organizing should stay high for years as a once-in-a-lifetime confluence of factors have created the perfect storm, including the use of social media, a younger workforce, a labor shortage, and the self-proclaimed “most pro-union President ever.”

Money doesn’t drive workers anymore. Employees want a say in workplace culture, activities, and benefits. And they want to work from home if at all possible.

Unions used to have to host covert gatherings to reach potential new members. No one has time to attend covert gatherings anymore.

Unions know this and actively organize on Facebook, Instagram, and TikTok. A simple 20 second video can reach thousands of people instantly.

Micro-units are here. Electronic signatures on union authorization cards are valid. Card check is imminent.

Union organizing at small and medium size businesses will happen without the employer ever knowing.

 

There are 3 Types of Lies: Lies, Damned Lies, and Statistics – Mark Twain

Gallup recently published its annual labor union approval report.

71% of Americans approve of labor unions. This is the poll’s highest ever approval rating (poll started in 1965). Approval has only once dipped below 50% (2009).

I see pro-union pundits wrongly equate “approval” for unions with “desire to be in unions.” One such headline read: If America had Fair Laws, 60 Million Workers Would Join a Union Tomorrow.

Um, no.

People may approve of unions but do not want to be in a union. I approve of plenty of things that I don’t want to be part of.

The pro-union pundits usually fail to include that only 40% of union members say their membership is “extremely important” to them. This makes sense since most union members never voted to be in their union; they just happened to get a job at a company that already had a union.

58% of respondents said they were “not interested at all” in joining a union.

So how do pro-union pundits conclude that 60 million people want to be in a union when 58% of respondents said they were “not interested at all” in joining a union?

By, as Paul Harvey famously said, leaving out “the rest of the story.”

 

Union Activity is Up, but Nowhere Near Past Numbers

I recently posted about how the 71% union approval rating does not equate to 60 million Americans desiring to be in a union.

People seemed to like statistics. Here are some more that may be interesting to you.

For all the media coverage about union organizing and strikes in the United States, this activity is pretty tepid from years past.

Major Work Stoppages (1000+ workers)

• 20 in 2022.
• 16 in 2021.
• 200 in 1980.

Total Strikes

• 385 in 2022
• 270 in 2021

RC (Union Representation) Petitions

• 1,522 in 2022
• 954 in 2021
• 5,000+ per year in the 1950s

Percent of Workers in a Union

• 10.1% in 2022
• 10.3% in 2021
• 35% in 1954

In my opinion, technology is the biggest reason why today’s numbers pale in comparison to those of the past.

Technology has allowed companies to offshore more manufacturing or subcontract to staffing agencies.

Technology has allowed companies to replace workers. Car washes are automatic. Self-scan groceries. Manufacturing robots. And soon the widespread use of driverless trucks.

Technology has allowed more people to work for themselves. Uber, Lyft, Door Dash, Amazon deliveries.

The current National Labor Relations Board is frantically trying to keep up with technology’s impact on the workforce.

If successful in codifying its joint employer and independent contractor standards, we may see union density reach 20%.

But to do so would encourage companies to offshore more work, and that would prevent the density from ever reaching 1950s levels again.

These are my opinions. What do you think?

 

NLRB Seeks to Give Unions Easy Access to Corporate Finances

The law requires companies to open their financial records to the union representing their employees when the company says it cannot afford something during contract negotiations. This is called “pleading poverty.”

The NLRB General Counsel wants companies to turn over to unions their general financial information even if the company never puts its ability to afford the unions’ demands at issue.

This includes financial statements, tax returns, and records of compensation paid to managerial and supervisory personnel, among other records.

In the case PacifiCorp, during negotiations, the employer offered a wage increase that was roughly 3% smaller than what the union proposed. The company explained that demand declined during the pandemic and anything more would “have an effect on its ability to provide competitive power prices due to regulations relating to rate payers.”

In response, the union demanded the following financial records:

• All documents used in consideration of the employer’s “never changing” 1.5% wage increase, including but not limited to any financial records or calculations, budgets, sales records or sales projections that were considered in the making of this decision.
• All documents that substantiate the employer’s claim that it is unable to offer more than an increase of 1.5% for 2021 and 2.0% for 2022 or that it is unable to meet the union’s demand of a minimum increase of 2.5% average general increase over the next two years.
• All relevant documents describing the degree to which the company received any financial support, grant, concession, or financial relief from the federal government or from any individual state.
• A copy of the operating budget and annual compensation provided by the company to all non-union staff including supervisory and management staff.

The company – as most would – refused to provide that information. The General Counsel determined the company unlawfully refused to provide specific financial information to support its bargaining position.

The NLRB General Counsel seeks to use this case to change labor law.

If successful, employers will need to provide financial documents whenever raising profitability or competitiveness as a reason why it cannot meet the union’s financial demands.

I expect to see more of these cases over the next few months as layoffs continue across the country and unions want to test the length the General Counsel will go to force companies to share their confidential financial information.

Companies that say things like the following examples may be forced to open their finances to the union:

• We’ve had to cut positions. Offering more money (or paid time off) is not something we want to do now.
• We need to remain competitive. To do so means we need to allocate some resources away from wages.
• Agreeing to such a large wage increase would decrease our competitiveness in the market.
• Inflation is up. Costs of goods are up. Supply chain is running behind. Increasing wages to the level the union wants would put yet another layer of burden on the company.

Companies may be in a catch-22. If they explain why they don’t want to meet the union’s financial demands, they risk having the union audit their finances. If they simply say, “no, we don’t want to” they risk bad faith bargaining for not explaining their position to the union and trying to work towards a compromise.

This reminds me of the very first bargaining session I ever did on my own. I forget what the union’s request was – 20 years will do that to you – but I remember my response. I said, “there’s only so much money in the pot to go around.”

Back then, that was not “pleading poverty” although the union alleged that it was. I have never said anything like that since, and certainly won’t now!

 

Prisoners Plan to Join Unions and Strike

Did you know that prisoners who work while behind bars are organizing into unions and plan to strike?

I didn’t know this until last week.

The Incarcerated Workers Organizing Committee (IWOC) announced plans to organize demonstrations inside every prison, jail, and ICE detention facility in North America.

IWOC is part of the Industrial Workers of the World (IWW, aka “Wobblies”), a union representing 9,000 workers from all industries in the US.

Prisoner-led unions are not recognized by the NLRB. That’s probably why I didn’t know about them until last week.

The prisoner unions have four demands:

• Repeal of the Thirteenth Amendment
• Closure of most jails and prisons in all states, including federal prisons
• Closure of all private prisons
• Release of all political prisoners in US prisons.

These are lofty goals. I’m probably not the only one who thinks they are unattainable.

Repeal the Thirteenth Amendment, though? That’s the Amendment that abolished slavery. Why would they want to repeal that?

Because the 13th Amendment abolished slavery everywhere in the US except as a punishment for crime. I guess I never knew that second part. I certainly never equated prisoners doing time for their crime to slavery as we know it from the 1700s and 1800s.

Apparently 900,000 inmates work full-time in American prisons for little or no compensation. Most states don’t pay them anything. Of the states that pay prisoners, most starting wages are around 20 to 30 cents per hour.

With respect to prisoners joining unions, this law was settled nearly 45 years ago when the United States Supreme Court held that the First Amendment does not afford incarcerated workers the right to unionize. See, Jones v. North Carolina Prisoners’ Labor Union, Inc. The Court noted, “It is clear beyond argument that no association of prisoners may operate as a true labor union pursuant to the NLRA.”

So basically, while interesting, this is much ado about nothing.

 

Is This the Case that Redefines Joint Employer at the NLRB?

A company that works for YouTube’s parent company Alphabet, Inc. has allowed many of its employees to work from home since spring 2020 when the Covil-19 pandemic began.

All employees supposedly knew the jobs were based in the Austin, Texas office location and that working from home was temporary. Yet, some workers chose to move away and continue working from home.

Along came a union to organize the workers.

Per the union, once organizing began, the company abruptly ended the work from home policy. The timing, to the union, seemed suspect.

Employees who choose not to return to the office will be terminated for job abandonment.

The NLRB will determine if the timing of the return-to-work policy is lawful. Considering the decision makers, let’s assume the timing is unlawful.

Let’s also assume some employees are terminated for not returning to work. This converts the unfair labor practice from a non-economic one that requires a notice posting to an economic one that triggers all the new NLRB compensatory damages.

A change in the joint employment standard would find Alphabet, Inc. to be a joint employer and jointly liable for the economic damages to the other company’s employees.

Moreover, if the Board determines that the union had authorization cards from a majority of workers, it could bypass a union election and order the parties to negotiate a union contract.

Some of this analysis is speculative. But the NLRB has been looking for a case to hold that a major tech company and its contractor are joint employers.

But, the NLRB may not use this case to change the law. Alphabet, Inc. has deep pockets to litigate for several years. The NLRB wants the law changed now.

Perhaps the NLRB waits for a case against a smaller company that does not have the resources to litigate for years.

But then again, we live in a headline world, and a headline that Google / YouTube / Alphabet, Inc. violated labor laws gets more cache than a small company no one has heard of before.

What do you think? Is this the case that changes the law?

 

I Agree with the Unions on This Issue: Keep Manufacturing in the U.S.

I have written before about how unions are successfully organizing electric vehicle battery manufacturers. And how they plan to organize workers at battery factories across the south very soon.

Part of the “Inflation Reduction Act of 2022” (IRA) did away with the “cap” on the number of electric vehicles that qualified for the full $7,500 tax credit.

Initially, this was good because more cars could get the tax credit.

But the devil is in the details, and there was a lot of detail in the IRA.

• The IRA eliminated incentives for EVs over $80,000.
• Maximum adjusted gross income for credit is $150k for single filers, $225k for head of household, and $200k for joint filers.
• The cars and batteries must be built in North America.

The third bullet is worth repeating: the cars and batteries must be built in North America.

So, basically, you only get a tax credit if your electric car costs less than $80,000, you earn a certain level of income, and everything is made in the U.S.

This upset the European Union because it has companies that make EV batteries. The EU has lobbied the Biden administration to eliminate this prong.

Unions have been lobbying the Administration to keep this prong.

I don’t plan on ever buying an electric vehicle. So, the tax credit prongs are irrelevant to me.

But I’m on the side of the unions on this one. I’m all for bringing and keeping manufacturing in the United States.

 

Is Apple Hiring its First People Officer a Response to Union Organizing?

Excerpts from Bloomberg article (Feb. 8, 2023)

Apple, Inc. is hiring its first chief people officer and shifting human resources duties from its head of retail, overhauling the way the tech giant hires and supports employees.

This hire marks a significant shift for Apple’s management team. In addition to giving more clout to the HR role, it should free up [Deirdre] O’Brien [Sr. VP Retail + People] to handle an increasingly challenging retail operation.

From Matt: In 2022, the Communications Workers of America union started helping Apple retail store organize. The campaign is part of the CWA’s CODE initiative focused on the technology sector.

Apple has seen union organizing drives in Atlanta, New York, Louisville, Oklahoma, Baltimore, St. Louis, and my hometown, Columbus, Ohio.

Link to the article from Bloomberg is here.

______________________________

Click here so Subscribe to Austin Legal’s Labor Leader Newsletter.

______________________________

Matt Austin is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.

Matt also runs Austin Legal’s HR Legal Compliance Program that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.

Matt’s experience is deeply rooted in helping manage many aspects of his clients’ businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.

You can reach Matt via email at Matt@MattAustinLaborLaw.com.