Labor Relations INK March 2022

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Subject: Labor Relations INK March 2022

March 31, 2022

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Is 2022 Big Labor’s Flint Moment?

Labor Relations Insight by Phil Wilson

This week I was on a call when someone with an appreciation for labor history asked, “With all of the high profile organizing in the news, are we in a Flint moment, or is this just a moment?” Great question.

The Flint sit-down strike was one of the most important events to spur the world of organized labor we know today. It resulted in a labor agreement that legitimized the United Autoworkers, who struck to gain recognition by General Motors. What started out as a quixotic battle in two small (but critical) plants ended up gaining the UAW official recognition which they rapidly turned into signing up hundreds of thousands of members and later the unionization of the entire auto industry.

After decades of declining membership it is a great question - have we reached another Flint moment? Or is this massive increase in organizing an anomaly?

With the first quarter of 2022 in the books, this is clearly a year in organizing like we haven’t seen in more than a decade. Just look at how first quarter 2022 stacks up against the last five years:

Note that there are still two days of petitions not added to the 2022 bar. I anticipate we’ll have at least 60 petitions above 2017, or about a 12% increase.

I mentioned last month that the biggest explanation for this increase is Starbucks. Starbucks locations had 164 petitions filed this quarter (and there will certainly be a handful more before the calendar flips over to April). Clearly the numbers overstate the total amount of organizing happening across the US. If you take away Starbucks, organized labor would consider this quarter a major disappointment.

At the same time, there are some interesting comparisons to Flint. There was a strong pro-labor President, Franklin D. Roosevelt, who managed to get the National Labor Relations Act adopted just over a year earlier. The country was trying to pull out of a depression, the labor market was in flux, and it was about to be put into even greater flux by World War II. The result was a massive increase in worker leverage. Companies were eventually able to absorb increased labor costs due to the fact that America became the defacto supplier to the world during the aftermath of the War. The conditions couldn’t have been better for organized labor.

There are important similarities and differences between 1937 and today. At the outset I’d point you to the book Pendulum that I’ve referenced many times before. Its basic point is that there are meta trends that repeat over generations, swinging from an apex of “me” (greed is good) to an apex of “we” (witch hunts), before swinging back the other way. The last time we were at an apex of “we” was around the same time as the Flint sit-down strike. The next apex of “we” is in 2023. All you have to do is look around to see example after example of “we” oriented behavior in our world, but one of the tell-tale signs of an apex of “we” is increased populism, protests, and labor unrest.

The labor market and worker leverage dramatically shifted throughout the pandemic and in ways we are just beginning to understand. I pray we can avoid another World War, but even without a major conflict the labor market and supply chain issues (along with inflation and other economic pressures worldwide) are not going away quickly or without more pain. And there is every possibility that the pandemic will continue disrupting our lives and economy for the next few years.

All of this disruption has created another moment for organized labor. How that plays out remains to be seen. Unions are opportunistically taking advantage of the moment. When I look at the Starbucks campaign I see a lot of organic organizing much more akin to a Saul Alinsky campaign than an SEIU campaign.

I don’t think over the long term this dynamic is great for unions. For unions to “win” in this moment they ultimately need to bargain contracts that deliver real benefits to lots of workers who see enough benefit to justify paying dues. And organizing 30 baristas at a time whose goal is to topple capitalism is a lot different than the situation in Flint in 1937. While the SEIU has won nearly all of the Starbucks elections, the latest ones are being decided by a handful of votes with low voter turnout. How engaged will these workers - who aren’t even participating in the initial elections - be when it comes to bargaining a contract for more than a year? My guess is not much.

The frustrations that led to this moment for unions will eventually turn against the promises, myths, and misconceptions unions perpetuate about what they deliver for working people. That doesn’t necessarily mean workers will no longer want to change the rules or the economic system, but it doesn’t necessarily bode well for organized labor. I wouldn’t be surprised to see general strikes (May 1st is just around the corner) and other protests. But I’m skeptical that this is organized labor’s Flint moment revisited.

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NLRB Still Searching For Traction

As efficient and committed as NLRB General Counsel Jennifer Abruzzo is at greasing the path for Big Labor, the overall picture of the rest of the Biden administration’s labor team seems like a clown scramble in a three-ring circus.

In the six months since the Democrats secured a majority on the NLRB they have yet to hand down a major precedent, though Abruzzo targeted 40 Trump-era decisions for reconsideration. Officials have found a plethora of excuses for inaction: lack of funds, the pandemic, and the legacy of those danged Republicans (including Peter Robb and William Emanuel).

If Big Labor was hoping for more muscle in their corner from Biden’s Supreme Court nominee, Judge Ketanji Brown Jackson has shown that when it comes to business and labor cases, she may not default to the liberal position. “She’s as likely to rule for a corporation in a race discrimination claim as she is for the plaintiff,” said Ted Ruger, Dean of the University of Pennsylvania Carey Law School.

A year after rolling into Washington, Biden is still stumping for his stalled PRO Act via his state of the union address. Attempts to secure some of the provision piecemeal using other legislation like the Build Back Better bill have also failed.

Keep an eye on Abruzzo - she is wicked smart and wholly committed, and she is orchestrating a “comprehensive administrative blitzkrieg” designed to succeed where the PRO Act languishes.

In an era where non-union employee work action is becoming the norm, it pays to remember that no union need be involved for such actions to be protected by the National Labor Relations Act, as Pain Relief Centers, P.A. discovered when five employees walked off the job after one of them was berated by a manager during an argument.

In at least one recent definitive decision, the NLRB ruled that seasonal stage technicians working in a New York City park were allowed to unionize.

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Organizing Drives Step Outside The Box

Labor’s tentacles seek to spread far and wide into industries previously imagined to be invulnerable. That’s especially the case as unions hope to recover from waning membership with a mere 6.1% of private-sector employees currently paying union dues.

A few key developments made prominent headlines, particularly in the retail industry:

Cannabis worker organizing campaigns chalked up 60 union victories in 2021, nearly double the figures of both 2020 and 2019. In fact, cannabis legalization is the overriding reason why retail unionization is on the rise. Naturally, the Teamsters and the United Food and Commercial Workers Union both want to get a leg up on this trend as states increasingly greenlight marijuana use.
REI (paywall) employees in SoHo, Manhattan voted to join the Retail, Wholesale and Department Store Union as the company’s first unionized location in the U.S.
Outside of retail, banks and credit unions appear to be a major target for unions to drum up more membership numbers. The goal of capturing parts of the financial industry could be an employer vulnerability, other than (per the NLRA) when it comes to supervisors and managers. The Communications Workers of America (CWA) counted recent successes including New York’s Genesee Co-op joining the union in January 2022. This follows multiple banks on the West Coast who saw successful CWA drives in 2020.
Unions (with support from VP Kamala Harris) will aim for future organization of companies in North Carolina, despite its Right to Work status (employers can’t make union membership or dues mandatory to hold a job). Worth watching.
On a brighter note, the Teamsters did get the boot from sanitation workers in New Jersey and New York, who “overwhelmingly” voted to decertify the union.

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The Coffeehouse Saga Keeps Brewing

Starbucks’ hole in the dike already hit flood status, which is spreading amongst the coffeehouse industry. Two Storyville Coffee locations petitioned to unionize under the United Food and Commercial Workers Union, and the NLRB recently recognized the Milwaukee-based Colectivo Coffee Roasters as unionized under the Teamsters.

Over at Starbucks, developments continue to come fast and furious with three more stores (in Buffalo, New York) voting to join Starbucks Workers United in one afternoon. While the total number of unionized Starbucks currently stands at fewer than 10, it’s worth noting that the total number of organizing locations tops 130 (the trend is spreading to Canada), although that’s still only a fraction of the chain’s 9,000 locations.

Trouble’s still brewing as much as the coffee, though. The NLRB issued a formal complaint (paywall) against Starbucks after complaints from Arizona employees who alleged suspension and termination over their union support. Buffalo employees accused the coffeehouse giant of threatening to close down stores that are plagued with union activity while allegedly barring organizing employees from meetings.

All of this is happening amid current Starbucks CEO Kevin Johnson announcing that he’ll retire (after serving five years in his position) with former CEO Howard Schultz returning in an interim capacity with further developments to come.

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Updates On The Changing Of The Teamsters Guard

As we previously discussed, James P. Hoffa left the Teamsters building after 23 years as the international president. Incoming president Sean O’Brien took office on March 22, and he has promised to rejuvenate the deep-pocketed union amid decreasing membership, down 9% in 2020 and currently standing at about 1.3 million members.

O’Brien, who has described himself as “militant,” could very well get strike-hungry in a big way. That could, as some fear, lead to conflict when the Teamsters’ current UPS contract expires in 2023. In other words, O’Brien holds the ability to trigger freight logjams, as was the case in the 1960s when Jimmy Hoffa controlled the U.S. trucking system. UPS employees haven’t gone on strike since 1997, but never say never, and O’Brien has made no secret of his desire to organize Amazon, something for which the AFL-CIO has taken notice and expressed a desire for Teamsters partnership.

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Score Board

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).

Download a PDF of this month's scoreboard

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The Union Corruption Fiascos Pile Up

Remember how we told you that these corruption union hits keep on coming? Play it again, watchdogs:

A former UAW secretary-treasurer didn’t learn from observing his colleagues (at many locals) heading to prison on fraud charges including embezzlement and money laundering. Timothy Edmunds (of Detroit) pocketed over $2 million in union dues, which he gambled away and lavishly spent on cars and guns. In doing so, he became the 17th defendant in the Fed’s ongoing criminal probe into the union’s misdeeds.
UAW President Ray Curry landed in an embarrassing, months-long investigation (launched as part of the federal corruption probe) over four college football tickets (totaling $1900), which he apparently acquired during the course of advertising, pre-presidential tenure. Curry was cleared, but nonetheless, the UAW put new rules (paywall) into place in an effort to avoid this type of fiasco.
Canadian auto worker union Unifor will investigate its former president, Jerry Dias (who’s credited with saving a Detroit GM plant), under accusations that he violated the union’s constitution during deal making and a negative PR campaign.
A disgraced SEIU California local president (Richard Louis Brown), who’s suspended and accused of stealing confidential documents, is still under the microscope. The warring sides made available an uncut video interview with Brown, along with the union’s request for a restraining order against him.

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The CWA Aims At Technology

The CWA union continues to attempt new belt notches. The union’s Alphabet Workers Union arm recently organized Google Fiber customer service workers in Kansas City. CWA now sets its sights on organizing Verizon employees (in two Washington cities) who are demanding higher wages.

On the Internet content front, around 100 G/O Media writers (who work for tech, automobile, and pop culture-focused sites) headed to the picket lines while the company and Gizmodo Media Group Union continue to meet at the bargaining table in an effort to substantially increase benefits and guarantee a higher minimum wage.

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Manufacturing Sees Conflict Aplenty

Union conflict remains plentiful in this industry, particularly where the United Steelworkers Union nearly lost their representation (they were only a few votes away from losing) of Exxon Mobil Refinery’s Beaumont Texas workers, 229 (out of 495) of whom voted in favor of decertifying them after an extended lockout.

The Seattle area’s concrete crisis continues with 330 striking Teamsters still off the job (since November) and companies deciding to forge ahead with members of other labor unions to get the necessary materials moving on construction projects. According to one business owner, at least 100 of his workers received layoff notices due to the strike; and the Teamsters continue to attempt organizing (and potentially disrupting) elsewhere, including port truckers who remain valuable assets within supply chains.

The automotive industry’s ever-shifting focus (to EVs) sees a new transition, as UAW VP Cindy Estrada (who leads the Stellantis Department) will soon retire. Her departure comes ahead of the Detroit Three’s labor negotiations that could bring big change (and possibly lost jobs) for employees and the unions who covet their dues.

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Bite-Sized Healthcare News

Earlier this month, we brought you news of many healthcare stories, so this round will stay short and sweet.

Employee safety and pay remain high priorities for healthcare workers, understandably enough, although methods for achieving those goals remains a fraught subject:

In California, a local SEIU chapter continues to push for a $20 hourly wage, a hefty ask given that this would be a $5 hourly boost;
In Washington, the State Senate didn’t pass a safety bill that would have lowered the nurse-to-patient ratio due to disagreements on funding;
Up in Washington, D.C., Biden devoted a few State of The Union lines to overhauling long-care facilities and nursing home conditions, although those changes realistically couldn’t arrive for several years down the line.

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The Gig Economy Remains Hard To Pin Down

The challenge of gig-work regulation has plenty to do with its rapid expansion (with at least 10% of U.S. workers counting it as their main income source) over the past five years. There’s also the sheer fact that rules differ by state and by country with various interests (and loads of platforms) hoping to cash in on the labor-rule ambiguity.

It’s clear, though, that gig-worker organization (and collective bargaining, strikes, and so on) aren’t the golden ticket (to higher pay, benefits, and more) that unions would promise (because taking on employee status generally translates into losing flexibility and making other tradeoffs). Still, unions will attempt to game this issue to increase their head counts (and dues-collecting revenue), all while states attempt to gain clarity on gig-worker classification.

In Washington state, for example, both the Senate (paywall) and House recently passed a bill (which must be reconciled before heading to Governor Jay Inslee) that grants some benefits to gig drivers (such as paid sick leave and agreements on pay rate) but doesn’t push them into full-blown employee status. Interestingly, the legislation boasts the support of not only Uber and Lyft but also the Teamsters-associated Drivers Union, yet at what cost? Some drivers insist that the protections don’t go far enough, and if these bills pass, the fight to gain employee classification would halt, barring federal intervention.

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Minimum Rising In A Tight Labor Market

The tight labor market already saw wages climbing over the past year, and it sure looks like inflation is kicking that trend into a higher gear. This, of course, adds to preexisting plans from states (after lobbying from unions), including Nevada, to incrementally raise minimum wage this summer.

The private sector is taking matters into their own hands with a supply-demand approach. Target’s starting wages, for example, will (depending upon local job markets) now range from $15 all the way up to $24 per hour. Given that these increases gear themselves toward hourly service positions, younger workers find themselves poised to disproportionally come out ahead while companies compete to fill scheduling gaps. Cyclically, this may only bring more inflation within our current economy.

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Labor Shakeups South Of The U.S.-Mexico Border

Last summer, we told you about how GM plant workers ousted the Confederation of Mexican Workers (CTM, one of the country’s most powerful) after 25 years while citing intimidation tactics. This development owed plenty to the U.S.-Mexico-Canada Trade Agreement (USMCA), which Trump signed as a regional trade deal to replace North American Free Trade Agreement (NAFTA).

The latest related development involves Mexico’s Tridonex auto plant, where workers voted on replacing their union amid claims that officials refused to fight for higher wages and benefits, all of which fell under the USMCA’s enforcement umbrella. In the end, these Tridonex workers chose to oust the CTM (thus ending a two-year battle against a notorious corrupt union) in favor of an independent union. It’s another early USMCA success, one that’s paired with reduced tariffs, which should translate to decreased production costs and higher profits for companies.

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About Labor Relations INK

Labor Relations INK is published weekly and is edited by Labor Relations Institute, Inc. Feel free to pass this newsletter on to anyone you think might enjoy it. New subscribers can sign up by visiting here.

If you use content from this newsletter please attribute it to Labor Relations Institute and include our website: http://www.LRIonline.com

Contributing editors for this issue: Phillip Wilson, Greg Kittinger, and Kimberly Ricci

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About Labor Relations Institute

LRI exists to help our clients thrive and become extraordinary workplaces. We improve the lives of working people by strengthening relationships with their leaders and each other. For over 41 years LRI has led the labor and employee relations industry, driven by our core values and our proven process, the LRI Way.

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Subject: Labor Relations INK March 2022