In this issue:
- Laboring Towards 2020
- UAW Strike Precursor To A Mid-West Recession?
- Still Mobbed Up?
- Healthcare Strike Threatened by Kaiser Union Coalition
- UAW Corruption Scandal
- Scoreboard, Insight, and more…
The bottom of each story contains a link to the individual post on our site.
Labor Relations Insight By Phil Wilson
A Wag-The-Dog Moment For The UAW?
The UAW and General Motors are reportedly near a tentative agreement to settle the historic strike the UAW called over a week ago. Nearly 50,000 UAW members have lost pay, health benefits (and probably a lot of sleep) over the strike. It remains to be seen how much different the tentative agreement will be from the last offer by GM, or whether members will ratify any eventual deal. But the company offered some significant concessions in an effort to prevent or at least delay the strike. The strike is reportedly costing GM over $400M per day.
The UAW says the strike is about making GM pay members back for major concessions made during the negotiations that pulled the company out of bankruptcy 10 years ago. They point to massive profits ($30 billion per year is commonly cited) to say that it’s time for GM to pay. They point to announced plant closings to say it is time to protect job security for members. They want to eliminate the two-tier wage system they were basically forced into during the last recession.
GM for its part points to the fact that even with the two-tier system their “all-in” labor costs are nearly 25% higher than competitors outside of the Detroit 3. As they forecast business conditions over the next several years there’s not much optimism. The plant closings they’ve announced are positioning the company for an expected downturn in the global economy along with massive changes in consumer demand for vehicles. Winter is coming.
None of these claims from the UAW or GM are completely right or wrong, and this round of negotiations was bound to require some big moves by GM to avoid a work stoppage. But many of those moves were made. Still 50,000 UAW members are on the street. Why?
I’ve got a theory. Have you ever seen the 1999 dark comedy Wag the Dog? Just days before his next election the President of the US is caught in a sex scandal that is all but certain to end his political career. But a political spin doctor hatches a brilliant plan. They will create a fake war in Albania that will divert attention from the scandal. Then the President will swoop in to heroically “end” the war, just before the election. The war hero President wins re-election and the problem is solved.
This strike feels a lot like a Wag the Dog situation to me. In case you haven’t kept up the UAW is in a crisis like we haven’t seen since Hoffa Sr. was running the Teamsters. The Justice Department has already gotten guilty pleas from numerous UAW officials and just days before the GM strike the FBI raided two homes, including sitting UAW President Gary Jones. Millions of dollars that were supposed to benefit UAW members were skimmed and used to line the pockets of UAW officials. This scandal reaches all the way to the top of the UAW, who may soon join the Teamsters under federal trusteeship. That’s a club you don’t want to join.
The scandal isn’t just impacting the crooked UAW officials (and, to be completely fair, numerous Detroit 3 company officials) who are about to be perp walked. It is devastating to the reputation of the UAW while it desperately tries to stop bleeding current members and hopes to convince new ones to join. The crisis is demoralizing to its membership. If anyone ever needed a Wag the Dog moment, it is the UAW now.
What better way to change the subject and divert attention than a historic strike? This new “crisis” puts a huge number of members on the street, going to war against a common enemy. It galvanizes the demoralized. Perhaps this even serves as an example of the “power” of unions the next time they try to organize a new location.
GM employees come out the big losers in this situation. After this contract gets settled make sure to read between the lines of the press releases. Exactly what improvements are gained that weren’t on the table before? Plus remember that many times the last-minute offers pre-strike don’t get publicized so members never know what they really gained by sacrificing their pay and benefits.
There is no question that the UAW leadership is corrupt. I just hope their corruption isn’t what led 50,000 workers out on a needless strike. Those members are just the beginning. A strike of this magnitude impacts many other businesses and communities. Some even believe this strike could be the tipping point into a recession in the Midwest. That could create further damage to these families and communities.
Anyone asked to join today’s UAW should seriously consider whether they want to put their livelihood into the hands of “leaders” like this. You probably guessed my answer is no.
Autonews.com posted this timeline infographic - click on the image to see the source and review all the related stories.
Union Bailout Update
The micro-unit strategy abetted by the Obama-era NLRB just took another blow when the Board ruled against it in the recent Boeing case. The 2017 PCC Structurals case began to unravel the micro-unit strategy by restoring the Board’s prior standard for determining the appropriateness of a petitioned-for bargaining unit. In Boeing, the Board further clarified the required analysis for this determination, using a three-step process:
- Step One: Shared Interests Within the Petitioned-For Unit.
- Step Two: Shared Interests of Petitioned-For and Excluded Employees.
- Step Three: Special Considerations of Facility, Industry, or Employer Precedent.
Read here for details on how this played out in the Boeing case, which dismissed a proposed micro-unit of 178 employees out of the 2700 total production and maintenance employees at Boeing’s South Carolina plant.
Although the issue of independent contractor status is far from resolved, a bit of good news was released by the NLRB. In Velox Express, the Board determined that independent contractor misclassification is not a stand-alone violation of the National Labor Relations Act.
Social media policies received scrutiny again when CVS Health’s policies went under the microscope. Two of their policies were found to run afoul of the Section 7 rights. First, CVS required employees to identify themselves by their real name when they discussed the company and their work on social media. An advice memo released in the case stated, “The board has recognized that requiring employees to self-identify in order to participate in collective action would impose a significant burden on Section 7 rights.”
CVS also restricted employees from disclosing “employee information” on social media. In response, the advice memo stated, “While the employer has a legitimate business interest in keeping customers’ and employees’ personal and medical information confidential, it has no legitimate interest in preventing employees from sharing contact information or discussing wages, working conditions or employment disputes.”
The Board just made it easier for an employer to make changes to the terms and conditions of employment without first receiving permission from the union. In MV Transportation, the Board adopted the “contract coverage” standard followed by the D.C., First and Seventh Circuits. If the collective bargaining agreement can be said to “cover” the change, the employer can act unilaterally.
The Department of Labor has proposed reinstating the Form T-1, requiring more financial disclosure by unions. The reestablishment of the use of the form would block the use of trusts by unions to circumvent reporting requirements in the Labor-Management Reporting and Disclosure Act. As the recent UAW training center scandal indicates, the move couldn’t come at a better time.
Two members of the NLRB have signaled that they are ready to reconsider an over 40-year precedent regarding employers’ off-duty employee access rules. The third condition of the 1976 Tri-County Medical Center ruling is problematic for employers because it does not even permit an employer to maintain a rule that allows an employee to return to the workplace for innocuous reasons, such as to pick up a paycheck. Board members Kaplan and Emanuel wrote a footnote in the recent Southern Bakeries decision that they were prepared to reconsider this third condition in “an appropriate case.”
Laboring Toward 2020
Obviously the best case scenario for Big Labor would be for the Democrats to take the presidency and sweep Congress. It may seem a pretty big pendulum swing from where we are right now, but with today’s political scene, you can’t rule out anything! With that in mind, it may be useful to take a look at what such a sweep could mean to labor policy.
Here is a list of legislation supported by most of the Democrat contenders:
- The Protecting the Right to Organize Act, which would ban “right to work” laws that allow employees to opt out of paying union fees in unionized workplaces, even though they get the benefits of collective bargaining.
- The Schedules That Work Act, which guarantees predictable schedules for workers, or extra pay if they have to work irregular schedules.
- The Paycheck Fairness Act, which would bar employers from using an employee’s salary history to determine wages, ensure that workers have the right to discuss wages without retaliation, and require employers to justify any pay discrepancies.
- The Family Act, which guarantees up to 12 weeks of paid family leave to workers, funded through a payroll tax on businesses and employees.
- The Healthy Families Act, which would require most businesses to provide full-time workers with at least seven days of paid sick leave.
- The Domestic Workers Bill of Rights Act would essentially amend federal labor laws to include domestic workers. But it would also extend new benefits to them, such as guaranteed paid time off, privacy protection, and a written employment contract.
- The Raise the Wage Act, which gradually raises the federal minimum wage to $15 an hour and indexes future increases to wage growth. It also abolishes the sub-minimum wage for tipped workers.
One strategy that has emerged in the debate over “labor reform” is sectoral bargaining. SEIU President Mary Kay Henry appealed to the 2020 Democratic candidates to think beyond just amending the rules to make it easier to organize, and instead to consider totally revamping U.S. labor law. In promoting sectoral bargaining, Henry explained, “Bargaining by industry, where workers from multiple companies sit across a table from the largest employers in their industry to negotiate for wages and benefits, is standard practice in almost every developed country in the world.” Although this is really a stretch, both Bernie Sanders and Pete Buttigieg have folded sectoral bargaining into their labor platforms.
To see where each candidate stands on these and other issues, review their individual labor platforms here.
UAW Strike Precursor To A Midwest Recession?
As the UAW strike entered its ninth day on September 24th, GM was forced to lay off 1200 workers at other facilities not represented by the union. If nothing else, the strike has provided Democratic presidential hopefuls the chance for a little grand-standing solidarity in an attempt to earn union support.
The Teamsters of course jumped on the bandwagon already, refusing to deliver any GM products. The two unions have a history of supporting each other’s strikes. GM said it had plenty of inventory, but industry analysts have said they believe that will only remain true for up to two weeks.
Estimates of the financial damage to GM range from $25 million for the first week of the strike, to $400 million per day by some analysts. Closer to home, the $250 per week of strike pay for striking employees doesn’t come close to the approximately $630 per week earned by temporary workers.
Some analysts predict that if the strike continues for very long, the midwest could be plunged into a recession as the impact is felt by the 10,000 other U.S. companies that supply GM. Some economists expect 300,000 job losses due to the 50,000 striking workers.
With GM’s termination of paid employee health benefits to the strikers, the UAW has stated it’s intent to either pay benefits via COBRA, or make sure basic health needs are met. In addition to the weekly pay, having to make COBRA payments for almost 50,000 workers could quickly drain the strike fund.
Only about 2% of the contact language was in place by the September 14th strike deadline. Major unresolved issues involve the wages and status of new workers and temporary workers, who now account for up to half the workforce in the U.S. auto industry.
Labor Solutions Corner
Challenge: A tight labor market for specifically skilled workers, combined with a high demand for product, led this industrial company with facilities across the country to use a talent firm to bring in extra employees. They were concerned the pay disparity could lead to organizing.
Solution: LRI developed a two-pronged approach to reduce the risk. First, a deep-dive risk assessment using focus groups and LRI’s Multi-Dimension Interview strategy measured the level of internal risk. Second, LRI focused on training supervisors on two crucial front-line leadership processes. The more immediate need was to prepare supervisors to have specific conversations with employees about the talent acquisition issues. The deeper and more long-term focus involved strengthening the employee relations environment by training these leaders in the behaviors of approachability, through LRI’s Approachable Leadership Workshop and online follow-up reinforcement.
Company management was so pleased with the results that they decided to extend the learning of approachability throughout the company.
Unions In Media
Most of the time, when we’ve seen media or tech workers unionize, it’s been with an organization like the Newsguild, maybe the Communication Workers. The Steelworkers though? Times must be hard for the USW.
This week, eighty Google contract workers voted to join the United Steelworkers Union. They will organize under the name Pittsburgh Association of Tech Professionals.
First thing on the new union’s agenda? Probably pushing for employee status for its members, which is what just happened at New Yorker magazine. Subcontracted fact-checkers and editors, a common practice in the industry, just earned employee status at the 94-year-old magazine.
It’s All Academic
The NLRB delivered a major blow to graduate student unions this month when they proposed a new rule that says graduate students are not employees, and thus do not have the right to organize.
This is the first time the NLRB has proposed a rule on this issue. In the past, and in particular the last couple of years, the Board has approached this situation on a case-by-case basis.
Members of the Chicago Teachers Union are understandably upset at their organization after a group of CTU members took a trip to Venezuela on what appeared to be a “state chaperoned propaganda tour.” More here.
Still Mobbed Up?
It seems anachronistic to talk about unions as havens for the Mafia, and most folks think of the more industrial unions like the Teamsters or the Laborers when they thinking about a union being “mobbed up.” The recent sentencing of Vincent D’Acunto, former secretary-treasurer of UFCW Local 2D in Brooklyn, dispels the myth that mob influence is a thing of the past.
D’Acunto conspired with Genovese family soldier Vincent Esposito, son of the notorious late Genovese boss Vincent “The Chin” Gigante. In a racket run from 2001 to 2017, the conspiracy ring, which included several other Genovese soldiers and the secretary-treasure of another UFCW local, extorted millions of dollars of union funds from an unnamed Local 2D official.
Who are the winners (and losers) of the labor movement? Don’t guess, just check the LRI Scoreboard
View this month’s scoreboard (archives also located here).
Healthcare Strike Threatened by Kaiser Union Coalition
80,000 Kaiser Permanente workers in hospitals and medical facilities across the country are due to walk out on strike beginning October 14th. Management claims to have offered a deal better than one that SEIU-UHW touted as an example at another healthcare provider, and included guaranteed wage increases of 3% across the board each year through 2022, preserve an existing pension plan and creating a $40 million workforce development fund. But while the negotiating team was still at the table, the SEIU-UHW used the strike announcement as an aggressive bargaining tactic to get more than other Kaiser unions have received.
Even as SEIU-UHW is attempting to show their “muscle” to union members while at the bargaining table, they are going behind those member’s backs to attempt to suck more “dues” out of their paychecks. SEIU-UHW President Dave Regan is trying to slide a “partnership tax” of $.25 for every hour worked into the new contract, ostensibly for an education fund to be controlled by Regan.
UAW Corruption Scandal
The UAW’s corruption scandal with Fiat Chrysler over the last couple years was just the tip of the iceberg. Since then, federal investigators have been led deeper and deeper into the bed of UAW corruption.
Recent updates include:
- The investigation into the misuse of training funds has expanded to General Motors.
- Former UAW official, Michael Grimes, plead guilty to wire fraud and money laundering.
- Late last month, the FBI actually launched a series of raids into six locations involving UAW officials, including the home of UAW President Gary Jones.
- In addition to investigating bribes, kickbacks, and phony labor negotiations, the FBI, the IRS, and the Labor Department are investigating whether the union made money from “tax-exempt nonprofit organizations connected to the UAW.”
At this point the investigation into corruption at the UAW has gone so deep that federal agents are considering charges under federal Racketeer Influenced and Corrupt Organizations laws. If RICO convictions take place, it could lead to a federal takeover of the UAW union.
So far, eleven people have been charged.
Back in May, a California Bill, AB 5, passed the state assembly. This bill expanded last year’s Dynamex decision that requires employers to perform the ABC test when determining whether a worker should be classified as a contractor or employee.
Since then, employers who work in the gig sector have been scrambling in an attempt to earn “exempt” status for their business models. Professions that earned exclusion from the bill include doctors, dentists, lawyers, architects, insurance agents, accountants, engineers, financial advisors, real estate agents, and hair stylists.
Professions that did not earn exclusion, despite major lobbying against the campaign in general — ride-sharing apps. And now that Governor Gavin Newson officially signed this controversial bill into law last week, companies like Uber and Lyft (as well as other tech firms in Silicon Valley) have some major considerations to make…and lawsuits to tend to.
In other gig news, yoga teachers are trying to organize.
A new Arizona law requires the state to calculate additional costs to the state government when cities and counties raise the minimum wage above the state rate. If the state has to pay more for government-funded services in these communities, then the legislature may require local governments to cover the additional cost.
New Hampshire Governor Chris Sununo vetoed a bill to increase the state’s minimum wage to $12 an hour by 2022 just one day after it passed the State Senate.
The unintended consequences of raising the minimum wage are already being felt in Oregon, the bastion of progressivism in the northwest. Fast food and grocery companies accelerated the implementation of self-checkout options to shed labor costs. In turn, the AFL-CIO submitted paperwork to put the Grocery Store Service and Community Protection Act on the 2020 ballot. The measure would limit the number of self-service checkout lines in grocery stores to two.
The Massachusetts House passed a bill this month that allows public sector unions to charge non-members fees for representation when filing grievances. H. 3854, a response to the U.S. Supreme Court’s 2018 Janus decision, directly overrides an August veto by Massachusetts Governor Charlie Baker. The bill also gives unions access to personal contact information for all employees, member or not.
Also this month, the NLRB ordered Auto Worker officials to reimburse dues deducted from an individual’s paycheck after he resigned from the union and revoked his authorization of dues deduction.
Labor Around the World
UK universities are on the verge of strike action after an increase in required employee pension contribution. Union members at 69 universities have until October 30th to submit their ballot in favor of a work stoppage. If approved, this will be the second university strike over pensions in two years.
Meanwhile, a new report points out that union bosses in the UK saw an average pay increase of 10 percent from 2017 to 2018 and taxpayers aren’t happy about it.
Current charges or sentences of embezzling union officials:
- Brian Ahakuelo - IBEW: $1,400,000
- Rober Peter - APWU: $34,500
- Thomas Popillo - CWA: $37,569
- Dana Pullman - State Police Assoc. of Massachusetts: $75,000
Labor Relations INK is published semi-weekly and is edited by Labor Relations Institute, Inc. Feel free to pass this newsletter on to anyone you think might enjoy it.
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Contributing editors for this issue: Phillip Wilson, Greg Kittinger, and Meghan Jones
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