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The Changing Union Agenda

March 1, 1995
Related Topics: Labor Relations, Featured Article
On January 18, 6,600 workers went on strike at AC Delco Systems in Flint, Michigan, a General Motors Corp. plant that makes spark plugs, filters and electronic parts for the Big Three automakers. Manufacturing came to an immediate standstill, not only at that plant, but at nine other assembly plants that rely on Delco parts. Within a couple of days, 33,000 additional GM workers were told not to punch in. With no supplies, there simply was no work to be done.

Although the strike ended five days later thanks to intense, late-night negotiations between GM and the United Auto Workers, analysts estimate the walkout cost the giant automaker about $90 million-this on top of another $90 million that the company agreed to invest in the plant as part of the strike settlement. The final tally: Five days, ten plants, 39,000 employees and $180 million.

So you think unions have lost their punch? Think again. As the experience at GM painfully illustrates, although unions may be down in terms of membership, they're not out. And, like every other enterprise in the United States today, labor unions are reengineering the way they do business. Their demands are changing, organizing activities are on the upswing and a pro-union National Labor Relations Board is doing all it can to facilitate a resurgence in worker representation. Don't be lulled into a false sense of security that unions no longer are effective. Their agenda may be different, but they haven't gone away.

This doesn't mean all those stories you've been reading about declining union membership are wrong. Except for a brief uptick in 1993, union membership has been in a steady state of decline for the last 14 years. Today, only 16.6 million workers are members of trade unions, representing just 15.8% of the work force (see "Union Fact Sheet").

Unions have lost membership for two reasons. First, downsizing has eliminated hundreds of thousands of union positions, especially in the heavily unionized manufacturing sector. Second, many of the benefits and protections unions used to offer members-such as higher wages, better working conditions and job protection in the event of illness-are now covered by federal legislation. The Americans with Disabilities Act and the Family and Medical Leave Act are two recent examples.

Since 1960, in fact, 95 federal laws have been enacted to protect employees from workplace exploitation and discrimination, explains Ed Potter, president of the Employment Policy Foundation in Washington, D.C. "The remedy workers can get through private right of action is far better than they could get under collective-bargaining agreements," he says. "In lobbying for this legislation, unions have been almost too effective because they've nearly worked themselves out of a job."

For this reason, unions are no longer a threat in the "macro sense," says Michael Severns, director of labor relations for the Mountain States Employers Council in Denver, Colorado. Yet they remain a threat in the "micro sense." In other words, if your company is unionized or is the target of stepped-up organizing efforts, look out. Unions are still a force to reckon with.

So how is the union agenda changing? What new demands are unions placing on employers? Is all this talk about union/management partnership for real, or are unions still confrontational adversaries? What kinds of companies are the target of organizing activities? When are employers most vulnerable? And how can you protect your company from being surprised by a union election or a costly strike? At GM's Delco plant, worker-management relations had always been good, and there had never been a strike over local issues in the plant's 71-year history. As Delco's management discovered, however, unions can rally their workers at a moment's notice, and unless the HR department is paying attention to changing worker concerns, no company is immune.

New times stimulate new demands.
Up until very recently, the chief raison d'etre for many unions was to seek higher wages for their members. As the U.S. economy expanded, company profits grew and unions wanted to ensure their members shared these financial rewards. Simple enough. But let's face it: It's much easier to demand wage increases when there are plenty of jobs available. In this era of downsizing, slow economic growth and global competition, keeping a job has become much more important. As a result, job security is now at the top of the union wish list.

"Unions have entered into an era of enlightened self-interest," explains Dennis K. Allen, executive director of employee relations at BellSouth Corp., in Atlanta. After all, he says, unions are businesses which depend on revenues from membership dues to survive. When their members lose jobs, unions lose money.

So although collective-bargaining sessions still include discussions related to wages and benefits, you're more likely to hear unions asking for job protections than job enhancements these days. This shift in focus has many unions agreeing to longer contract lengths than ever before. Last year, for instance, Cummins Engine Co. in Columbus, Indiana, signed an unprecedented 11-year contract with the Diesel Workers Union. That's a far cry from the traditional three-year contract that unions used to demand as a way to seek higher wages and benefits if inflation was high, and to correct any problems related to work rules and regulations. Shorter contracts allowed any inequities to be fixed within a relatively short amount of time.

Slow economic growth and the threat of foreign competition, however, has made companies less willing to grant costly wage and benefit increases, regardless of how often unions ask for them. For unions, there's less incentive for a quick return to the bargaining table if they can't easily come away with economic gains. Thus, in exchange for signing longer contracts, unions are asking for some promise of job security.

But given that no job is truly permanent, how do companies offer job security to union members? They do so in a variety of ways, depending on the industry, the union and the company. At Cummins Engine, where three-year contracts had been the norm for more than 20 years, the Diesel Workers agreed to the landmark 11-year contract in exchange for a commitment by management that all 1,800 represented employees would be guaranteed a certain number of hours of employment per year. Why 11 years? Because by the time the contract expires in the year 2004, all represented employees will be eligible for retirement. "You see, it isn't only about job security," explains Conrad Bowling, president of the Diesel Workers Union in Columbus. "It's about retirement security as well."

Job security demands by the union also have been met by management at four Whirlpool Corp. plants, according to Bill Chickering, director of employee relations at the company's North American Appliance Group in Benton Harbor, Michigan. Whirlpool didn't go so far as to guarantee employees a certain number of hours of work-"because there are no guarantees in life," Chickering says. The company did, however, commit to funding capital improvement and product-development projects that will contribute to the company's long-term growth potential. "We don't actually promise job security, we promise to pursue growth opportunities," he explains.

In exchange, the unions agreed to five-year contracts, which were the longest ever signed at the company. Ironically, longer contracts also contribute to the company's growth potential by eliminating the threat of a strike every three years, and increase customer confidence in doing business with Whirlpool. Also, a longer contract helps the company guarantee shipments on products ordered, Chickering says. Thus, customers place more orders, the company has more work and more jobs are secure.

The Communication Workers of America, the union which represents approximately 58,000 employees at BellSouth in Atlanta, was also very specific in its job security demands. First, according to Jimmy Smith, the CWA's assistant vice president, the most recent contract, signed in 1992, gives union employees the right to transfer from one facility or division to another, something they couldn't do before. If business takes a downturn, therefore, employees have the ability to move to potentially more secure jobs elsewhere in the company.

Secondly, the contract provides for enhanced severance packages to employees who voluntarily leave the payroll. "This improves job security for our younger employees," Smith explains. Third, and perhaps most importantly, the contract includes a commitment by BellSouth to invest in training and development for represented employees. "This industry is changing so fast, our workers have to continue to acquire new skills or they will become obsolete," Smith adds.

A key aspect of this is the "Employment Security Partnership," an ongoing commitment by the company to provide career planning and education assistance to union employees. Partnership, which is an outgrowth of a program developed in 1986 for furloughed non-union employees, includes:

  • An orientation to changes underway in the telecommunications industry, how those changes affect jobs, and how employees can respond by taking advantage of various career development options
  • A career/life planning workshop to help employees analyze their own values and career preferences
  • Resources to help employees pursue new skills and career aspirations, including career counseling, computer literacy courses, college tuition assistance and an internal job-posting system.

Under the terms of the three-year union contract, BellSouth is committed to spending $25 million, or $133 per employee, to provide these training opportunities.

The first cycle of Partnership, offered during the 1989 to 1992 contract period, had enormous appeal to represented employees. According to Allen:

  • 57,475 program orientations were delivered
  • 26,259 employees attended career-planning workshops
  • 5,332 employees took 29,263 college courses under the tuition aid plan, with 568 receiving college degrees
  • 15,442 employees took 21,142 courses under the training or retraining component.

The program was so successful the company reinstated it for the current contract period, which expires this year, and will likely include it in the next collective-bargaining session.

The new demands require closer partnerships.
Even this collective-bargaining process has changed significantly in recent years, according to Smith. "It's now more of a problem-solving process. Our objective is to make our companies the best in their industries because this is the only way to maintain jobs. We can now work together because management has the same goal."

Successful union/management partnerships, like the one underway at BellSouth, have been getting a lot of ink lately, particularly those in high profile companies such as Xerox and AT&T. That's because partnering with management fits in with the unions' single most important goal-and that's survival for their membership, says Nancy Capezzuti, vice president of HR for Southern Union Company in Austin, Texas. And in pursuing the goal of partnership, unions have begun to accept conditions from management they never would have considered before.

For example, at Southern Union Gas, the Austin local of the International Chemical Workers of America agreed to consolidate union job positions into wider salary bands, a process known as broadbanding. The company pursued broadbanding because it allows employees to take responsibility for expanding their job skills, enables employees to train in other areas without having to take a pay cut, and allows Southern Union to transfer employees in the same band more easily. Like other companies that have implemented a broadband salary structure, Southern Union pursued this strategy in an effort to create a more flexible, responsive and highly trained work force.

According to Capezzuti, unions traditionally have been strongly opposed to broadbanding because every union contract has been built around very specific job descriptions. This kind of pigeonholing has helped unions be accountable to and for their members. For example, when represented employees took on responsibilities outside of their job descriptions, it provided a basis for the union to ask for more training and higher wages. But when training is offered and employees have the ability to increase their own wages by taking advantage of that training, the need for union representation diminishes.

So what was it, exactly, that made the Chemical Workers agree to this new salary structure? Again, back to job security. "Broadbanding allows employees to create their own job security by acquiring new skills," Capezzuti explains. "Because it enables people to be proficient in multiple areas, we won't have to send them home when there isn't enough work to keep them busy. Instead, we can send them to an area that has a shortage of employees."

Don't be fooled into thinking that unions have become so conciliatory that they'll bow to any management demands to keep their revenue stream intact. "Partnership doesn't necessarily mean friendliness or agreement," Capezzuti says. "What it means is openness and honesty." The adversarial nature of union/ management negotiations still is very much alive and always will be, adds Allen. "Unions exist to serve their members," he says. "To do that effectively, there must be healthy adversity. I call it manageable tension."

In fact, in the minds of many negotiators, tension and distrust still reign supreme at the bargaining table, with some unions reluctant to buy into this partnership idea at all.

"Employers say they want to empower employees and work with us to give them a greater role in business decisions, but with rare exceptions, these programs are a bunch of crap," says Bob Wages, president of the Oil, Chemical and Atomic Workers Union based in Denver, Colorado. "Unions and their members are quick to cooperate, but it's obvious management still wants the final say. I really don't think corporate America takes its human resources seriously. They aren't seriously committed to improving the quality of life at the work place." Furthermore, he adds, companies that neglect these quality issues leave themselves vulnerable to union activities.

More specifically, says Martin F. Payson, a labor and employment lawyer with Jackson, Lewis, Schnitzler and Krupman in White Plains, New York, "the contemporary workplace issues that can get a company into trouble are what I call sex, drugs and rock-'n-roll issues. Whenever an employer ignores these concerns, unions have the opportunity to claim new territory."

Payson explains that sex issues have to do with the unfulfilled legitimate needs of women in the workplace. These include sexual harassment complaints that go ignored, glass ceiling issues that block a woman's professional progress, and work/family concerns that create stress for women at work.

Drug issues include invasion-of-privacy matters, such as drug testing, electronic surveillance and questions about an employee's lifestyle-like whether or not they smoke-which are ostensibly designed for the purposes of determining benefit coverage. And rock-'n-roll issues refer to the fact that a growing number of employees-particularly Generation Xers, those people born between 1965 and 1981-regard work merely as one component of their lives, not the primary focus. "The reality for these workers is that their private life is just as important as work," Payson says.

In fact, quality-of-life issues were the reason the United Auto Workers struck the GM plant in January. The union maintains that GM violated its union contract by refusing to hire up to 500 additional workers to reduce overtime for Delco employees, and union managers believed the long workdays and workweeks were creating health and safety hazards for its members. As Al Woodham, a GM autoworker for 31 years explained: "Most of these guys have been working a lot of overtime. They're tired."

The strike was settled when GM agreed to hire 663 additional workers to reduce the workload of existing employees. No mention was made of any wage or benefit increases. "As our culture has changed, economic issues have become less important than the quality of work life," explains Wages. "Where we've been able to organize successfully has been in companies where workers are seeking dignity and greater recognition for their efforts."

Organizing efforts are targeted for small, public sector establishments.
Unions are taking this message about dignity and quality of work life to those places where workers are apt to be the most responsive and most easily organized. These include smaller workplaces with large numbers of women and younger employees. More specifically, much of the union organizing activity that has taken place in recent years has been in the public sector, particularly among teachers. In fact, government employees are the most unionized sector of all, with 38% of local, state and federal workers represented by a union.

This doesn't mean the private sector is being neglected, however. Companies in the service industry are especially vulnerable today, particularly those that have between two and 100 employees. "The smaller the unit, the more likely a union will win an election," Payson says. The organizing success rate is 54% at firms with fewer than 50 employees, but only 27% at companies that have 500 or more.

The most organizing activity is taking place in the Northeast and Midwest, where labor unions have traditionally had a strong presence. The industries experiencing the greatest amount of organizing are nursing homes, computer manufacturers and "paperwork factories," such as claims processing centers, says Steve Nobil, founding partner and labor law attorney with Millisor & Nobil in Cleveland.

Unions also are seeing growing support from groups of employees whose unique needs have long been neglected by mainstream corporate America, groups such as immigrants, racial minorities and gays and lesbians. And why not? Attracting disenfranchised workers has always been part and parcel of the union philosophy.

Although unions appear to be going after smaller targets, they're going after more of them. According to F. Stuart Keene, president of PTI Labor Research in Houston, Texas, organizing activities have jumped 30% in the last two years. Part of this is because of efforts underway by the Organizing Institute in Washington, D.C., which the AFL-CIO and 14 unions opened in 1990.

At the heart of the Institute is a rigorous training program to develop future organizers. In recruiting organizers-to-be from college campuses such as Yale, Smith, Harvard and Sarah Lawrence, the Institute looks for students from working class, union or poor families. Diversity is also a priority: 70% of trainees are female or people of color. In addition to cultivating the talents of these young adults-200 of whom had been trained by last summer-the Institute has trained more than 1,000 people at regional organizing conferences.

So what does all this mean to HR executives? It means look out and keep a close watch on employee needs, especially during times of workplace upheaval. All the restructuring and reengineering underway today makes companies especially vulnerable because bottom-line issues tend to push employee needs to the back burner. Management changes, mergers and acquisitions, and major product expansions are some of the situations that cause employee insecurity. As Jimmy Smith of the CWA says: "During times of unrest, employees see unions as their only hope." It sounds cliche, adds Nobil, but companies are most vulnerable when they least expect it.

Unions are gaining support from employees whose needs have been neglected, such as immigrants, racial minorities, and gays and lesbians.

The president of a 50-employee steel processing company in Ohio was shocked upon being informed that a petition had been filed for a union election. The reason had nothing to do with wages and benefits. Workers simply were tired of the perceived favoritism toward certain workers and lack of communication from management. The president of the company said he didn't realize the extent of employee unhappiness until it was too late. The union has since been decertified because employees discovered that in exchange for union representation-and the required monthly dues-they would actually have to give up some benefits. Still, the company president learned a valuable lesson.

Are there some warning signs he and other employers should take as an indication of employee unrest? Yes, and they include changes in workplace attitudes, changes in communication patterns-such as when employees start asking argumentative questions-and an increase in tension between workers and management. Graffiti that includes barbs against management also is a good indication. Employees grouping together in unusual locations is another. "Unions have become skilled at planting organizers," Payson adds, "so be on the lookout for new employees who don't fit the model and who ingratiate themselves with other workers."

Ideally, of course, you shouldn't wait until these signs of unrest appear. Smart companies will engage in progressive union awareness programs, Payson says. A "vulnerability analysis," for example, will give you an indication of the issues employees are concerned about. It includes an in-depth assessment of personnel policies, programs, practices and procedures to bring to light employee issues that your company may not be addressing: issues such as lack of advancement opportunities for women. "Look at yourself the same way a union would," Payson suggests. Then, once you spot areas of vulnerability, you can begin to address them.

To thwart organizing attempts before they begin, Payson adds that companies should, as a matter of routine, engage in good HR practices, train first-line supervisors in leadership and communication skills, and make sure HR policies are well communicated to employees.

"Don't use the fact that your employees are already unionized to justify not making changes," adds Capezzuti, because unions can make your life difficult in other ways. For example, many companies have seen an increase in the number of grievances filed by represented employees. "There's less willingness on the part of unions to tell employees that they don't have a case," Severns says. "In fact, they're taking more of these cases to arbitration for political reasons, that is, to prove to members that unions still have worth."

Although unions probably aren't at the top of the list of issues employers are most concerned about-wrongful discharge, the EEOC and compliance with federal legislation are more pressing-HR professionals shouldn't be complacent about them. "My advice is to be aware of the fact that unions are still out there," Severns says. "They aren't dead and they'll definitely react to and jump on every opportunity there is to organize. If employees have problems that you aren't addressing, unions will."

Personnel Journal, March 1995, Vol. 74, No. 3, pp. 42-49.

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