Austin Legal Labor Relations Newsletter #8

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.

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Gen Z is Busy Organizing Unions

Companies with young workers need to hear this: Gen Z has been busy organizing unions.

There is a new, younger generation replacing Millennials at work. Anyone born in 1997 or later is in Generation Z. For all the discussions about Millennials, they were not the union organizing force that Gen Z is becoming.

While reasons behind each union organizing drive is unique to each company, Gen Z workers are leading the charge.

The Center for American Progress found Gen Z’s approval rating of unions is 64.3%, compared to 60.5% for Millennials and 57.8% for Gen X.

Younger workers are overrepresented in retail. According to federal data, about 24% of retail workers are under 24, compared with 12% of workers overall. And 46% are under 34, compared to 35% of workers overall.

Gen Z will not work retail forever. They will change jobs and work in all industries. Whether their pro-union philosophies will travel with them is unknown.

Experts opine that Gen Z’s interest in union organizing and workers’ rights stem from their childhood. They have lived through the Great Recession, the Covid pandemic, enormous inflation, and are hearing that the U.S. economy is headed for another downturn.

They watched as their parents and grandparents were laid off, got sick, couldn’t afford to maintain their lifestyles, have crushing debt, and are uncertain about the future.

This makes Gen Z less tolerant of high CEO salaries and corporate profits. They believe they should have a bigger piece of the pie. They distrust leadership because leaders created the problems that shaped their philosophies. They are used to having an equal say about things in their lives.

Social media has erased the corporate ladder to them. They believe they should have a direct line to decision makers and be involved in decisions impacting their employment.

They are connecting with union organizers across the county to amplify their efforts. Union representation petitions and unfair labor practice charges were up last year resulting in the NLRB’s largest single-year increase of both since 1976.

 

Employers: Prepare to Negotiate Work From Home Policies

I’ve said it before (and I will likely say it again) – unions negotiating collective bargaining agreements in 2023 will seek to solidify work from home commitments for employees who worked from home during the Covid pandemic.

While I’m sure some unions have not made this proposal, in my experience, they are in the minority.

Companies that cobbled together a way for employees to be productive from home are often surprised when employees represented by a union demand to make work from home a permanent part of their work experience.

Employers are capitulating to these proposals to avoid strikes or replacing employees in this tight labor market.

Thompson-Reuters Corp. is a recent example of this. It reached agreement with its unionized US journalists that allows most journalist to work from home three days per week. This was agreed to about a month after the journalists voted to authorize a strike.

Thompson-Reuters workers accepted much lower wage increases than they initially demanded; but they get to work from home indefinitely.

Companies need to look critically at those union positions that worked from home during Covid. While companies thought work from home was temporary, employees want them to be permanent.

All those nuances of working from home that unions let slide during the pandemic must be agreed to or companies risk grievances or unfair labor practice charges.

For example, will the employer pay for or reimburse the employee for home internet, computer, monitor, desk, chair, office supplies, electricity, etc. If the employee has two monitors or an ergonomic chair at work, will the employee have the same at home?

How will the employer monitor employees to ensure productivity remains high and employees are paid appropriately for all hours worked to comply with the FLSA? The NLRB has already spoken out against cameras, GPS, keyloggers, software that takes screenshots, and audio recordings throughout the day.

What payroll taxes will be deducted from the employee’s paycheck? Is there a different deduction requirement because the employee works in a different city than where the office is located or because the employee receives direction from a supervisor who lives and works in a third different city?

Codifying work from home parameters in a collective bargaining agreement is much more than: who can do it and when can they do it? Savvy negotiators must think several steps ahead about the nuanced impact work from home has across several areas of the company.

 

Strike activity is expected to increase significantly throughout 2023

2022 saw a resurgence of employees striking, especially when trying to organize a union.

Last year had about 380 strikes, involving more than 200,000 workers. 22 of these strikes were “major work stoppages” involving 1,000 or more workers.

By comparison, 2021 had 43% fewer major work stoppages, strikes, and strikers: 16 major work stoppages, and 265 strikes involving 140,000 workers.

2023 has already seen several strikes, including more than 7,000 nurses at two New York City hospitals and the largest strike in the history of higher education when 48,000 academic workers went on strike at the University of California.

150 major union contracts are set to expire in 2023 involving more than 1.5 million workers. Union employees are generally only permitted to strike when their contract expires. If employers do not meet union demands at the bargaining table, I expect additional, significant strikes.

More importantly, non-union employees can strike at any time (except for healthcare workers).

Non-union employers are most at risk because labor laws and strikes are not on their minds, and “they don’t know what they don’t know” about strikes.

Employers whose collective bargaining agreements expire this year or who have union organizing activity must have a detailed strike contingency plan. Detailed is key. The one I use is about 80 pages of fill-in-the-blanks that leaves no contingency behind.

Of course, all of this comes at a time when public approval for unions is at an all-time high (71%), we have the self-proclaimed “most pro-union president ever,” and NLRB doing all it can to change the landscape of labor law to dramatically favor unions.

 

Union Authorization Cards Irrevocable Even if Employee Does Not Know What She Signed

This is a typical story that I hear several times per year. And it ended exactly the way I expected it to end.

Employee Baro attended a presentation by the Lake County Federation of Teachers Local 504. A union representative outlined how much dues would cost and gave each teacher a union membership application.

The union rep did not say membership was mandatory (or that it wasn’t mandatory). There is no law that unions need to tell potential members anything, not even the truth. Baro assumed it was mandatory and signed the application without reading it.

The application read, “this voluntary authorization shall be irrevocable” and that it was “signed freely and voluntarily and not out of any fear or reprisal.”

A few days after signing the application, Baro learned that membership was optional. She tried to revoke her membership and recoup her dues.

The union denied her revocation and refused to reimburse the dues. She sued.

The Seventh Circuit Court of Appeals ruled in favor of the union holding that the “I got duped” defense didn’t work. OK, the court didn’t say that, I did; the court is more professional.

This is an interesting win for organized labor.

The union did not have to tell Baro that her membership in the union was voluntary. But isn’t a union supposed to operate in the best interest of an employee? Wouldn’t a union acting in the employee’s best interest have told her membership was not mandatory? Apparently not. Seems that the union just wanted her dues money.

 

This is a Textbook Example of Why Employees Join Unions

Clinicians of a start-up in the behavioral health market are organizing a union. The company is like many other companies in several industries: a venture-backed, software-focused, start-up.

I see these companies in every industry. Some of them are my clients. This company is not.

These companies start off as small mom and pop shops. Then private equity money comes in. Virtually overnight, the companies grow exponentially. Gone is the mom and pop feel and the way things used to be.

According to the founder of the start-up, this union organizing drive came out of the blue.

It did not come out of the blue.

Unionization is easy to sell to employees who no longer recognize the company where they work. When a company is sold or a major change happens at the company, unionization risk is high.

Here, the unionization efforts were in response to how the company handled communications and negative feedback, and changes to how clinicians got paid, among other things including significant business decisions and growth strategy.

For example, in early summer 2022, the Company rolled out new measurement-based software for patient care. Several clinicians took issue with a lack of clarity around the rollout. Aggressive policing by the company of internal chats deepened their frustration.

A month later, in July 2022, many clinicians signed a letter detailing their dismay with how management handled the situation. The company’s responses did not help and was identified by the clinicians as the first steps toward organizing.

In August 2022, a group of clinicians approached unions for support. Employees signed authorization cards. The rest is history.

Employers, please listen: Employees vote for union representation because they don’t feel like they have a voice at work. They look to unions to be their voice.

If employees formally send you a letter detailing issues they have with working at the company, take that letter seriously. It really is one of the first steps to union organizing.

 

Far-Reaching Impact of NLRB GC’s Proposed Rule on Replacing Strikers

The NLRB General Counsel wants to undo a 60-year law and put strict limitations on when companies may permanently replace strikers.

Currently, employers can permanently replace workers who strike to obtain economic concessions so long as hiring the replacements was not for an “independent unlawful purpose.” The GC has the burden of proving the employer violated the Act.

The GC no longer wants this burden. She argues that permanently replacing economic strikers is “inherently destructive” of employees’ right to strike, bears “its own indicia” of unlawful intent, and “violates the Act absent a legitimate and substantial business reason.”

According to the GC, simply hiring a permanent replacement during an economic strike violates the Act. The burden would then shift to the employer to prove it had a substantial and legitimate business reason for its actions.

This change places the employer’s motive at the heart of the decision. Yet, Hot Shoppes (1964) made the employer’s motive for hiring replacement workers immaterial.

So why this change after 60 years?

For support, she cites the “steady growth of a flexible contingent workforce” and “easier access to temporary workers” for making it easy for companies to continue operating during strikes without permanently replacing the strikers.

To me, this aligns with the Board’s obsession of finding joint employer status between primary employers and staffing agencies. Forcing union employers to hire temporary workers through staffing agencies seems likes a backdoor way of organizing unions inside staffing agencies.

The timing of this also coincides with increased strike activity in the United States.

👉 The number of strikes in 2022 was 43% higher than in 2021.

👉 2023 has seen the largest higher education strike in history.

👉 The UAW just increased weekly strike pay by 25%.

👉 Several major collective bargaining agreements covering 1.5 million employees with a history of striking expire soon.

While this is on the GC’s wish list, it is not yet law. Regional Directors will apply it when investigating unfair labor practice charges regarding replacement workers. I expect a complaint to issue soon against a company that hires permanent replacements and fails to convince the Board of its “business justification” for doing so. The current NLRB will then rule against the employer, and this becomes Board law.

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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.