Subject: UAW and Allison Transmission: Averting 2024's First Major Strike: LRI INK

January 11, 2024

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UAW and Allison Transmission: A Hard-fought Deal Averting 2024's First Major Strike

By Michael VanDervort

In a display of tough labor negotiations, UAW Local 933 has reached a tentative agreement with Allison Transmission in Indiana, averting what could have been the first significant strike of 2024. The agreement, resulting from months of intense bargaining, highlights the complex interplay of labor demands and corporate management in today's industrial landscape.


The Details of the Agreement: A Closer Look

The tentative agreement, forged on November 22, 2023, reflects a mix of union demands and company concessions, according to a post by Local 933 on X that listed some of the main achievements of the new tentative agreement, including:

  • End to Wage Tiers: A significant shift towards wage parity, albeit one that might challenge Allison Transmission's payroll strategies.

  • Wage Increases: A predictable outcome given UAW's historical focus on wage hikes, though it poses questions about long-term financial sustainability.

  • Retirement Benefits Enhancement: A step forward for employee retirement security and a potential future financial burden for the company.

  • Juneteenth as a Paid Holiday: A symbolic addition reflecting broader societal changes and the union's expanding social agenda.

While meeting several of UAW's objectives, this agreement also underscores manufacturing companies' increasing pressures in balancing employee benefits with operational efficiency.


Negotiation Dynamics: A Tense Journey to Agreement

The path to this agreement was marked by UAW's assertive negotiation tactics and allegations of unfair practices by Allison Transmission. The potential strike, looming with a January 5, 2024, deadline, highlighted the stakes for both sides – a disruption in operations for Allison and a demonstration of union power for UAW.


Beyond the Agreement: Implications for the Manufacturing Sector

The averted strike and the resulting agreement are more than a resolution to a stand-off; they represent the ongoing challenges in the manufacturing sector. The UAW's ability to push through its agenda sets a precedent, but it also raises questions about the impact of such deals on the industry's financial health and competitive edge.


A Realistic Perspective on Labor Relations

From a broader perspective, this agreement reflects the current state of labor relations, where unions like UAW leverage their bargaining power, often pushing companies to their limits. While successful in achieving short-term goals for workers, this dynamic also necessitates a conversation about the long-term implications for business strategies and industry competitiveness.


Though a relief in preventing a significant work stoppage, the deal is a critical case study in the delicate balance of power between labor unions and corporate management in today's business environment. The UAW will undoubtedly continue to leverage these contracts in its ongoing efforts to organize non-union automotive companies in the United States. 

The Workfront: UAW's Aggressive Campaigns, SpaceX vs. NLRB, and a Planned Parenthood Deal

By Michael VanDervort

It's that time of the week when we look at some of the rapidly developing stories on the weekly Workfront.


UAW holds onto the headlines: As we ended 2023, the UAW had held the headlines for most of the fourth quarter driven by their weeks-long "stand up strike," the resulting labor agreement with the Big 3, and finally, their announcement of a sweeping new campaign aimed at organizing any and all non-union auto manufacturers operating in the United States. Toyota was the initial target of the campaign, but Volkswagon and BMW have since been drawn into the fray with active card-signing campaigns. They also reached a tentative agreement with Allison Transmission in Indiana, averting what could have been the first significant strike of 2024. Keep an eye on Shawn Fain, as he seems intent on remaining highly active in 2024. We will have a deeper dive into these efforts next week.


SpaceX launches lawsuit aimed at NLRB: SpaceX, under Elon Musk's leadership, has filed a lawsuit challenging the authority of the National Labor Relations Board (NLRB). The lawsuit claims the NLRB's in-house courts are unconstitutional and questions the agency's enforcement power. This action follows a complaint by the NLRB against SpaceX for allegedly firing employees who criticized Musk. SpaceX argues that the NLRB's structure violates the separation of powers and seeks an injunction to halt the NLRB's case while constitutional concerns are addressed. The lawsuit could significantly impact the NLRB's ability to oversee workplace issues if successful. We discuss it here.


A first contract at Planned Parenthood: 430 Planned Parenthood workers across five Midwestern states and Planned Parenthood North Central States have reached agreement on a first contract. The agreement, which is pending ratification, includes a minimum 11.75% wage increase over three years, with the lowest-paid employees receiving a 17% raise in the first year. The deal also reduces health insurance costs and contains provisions on harassment and racial justice. However, some union leaders expressed disappointment, citing insufficient raises and inadequate contract language on equity and racial justice.  First-time CBAs are notoriously difficult to negotiate, often taking more than a year, so this is a notable event.

Healthcare Headaches: Senior-Living Facilities, The New Joint Employer Standard, And The Tasks Ahead

By Kimberly Ricci


It’s no secret that the healthcare industry still faces a long recovery from provider burnout and worker shortages. Hospitals and related employers certainly do not need any more labor-related challenges, but the NLRB has other plans. This ailing industry will soon be required to adhere to a broader joint employment standard – meant to streamline unionization processes at greater cost to businesses – that will increase employer liability. 

 

The board’s new Final Rule has been nudged back to a Feb. 26 effective date amid legal challenges. If the rule survives, two businesses only need to share the ability to control one of many “essential terms and conditions of employment,” including hiring, scheduling, compensation, workplace rules, and more (regardless of whether they execute that control) to be classified as joint employers. 

 

The danger to healthcare: Businesses might be jointly liable for unfair labor allegations from workers whom they don’t even employ. Under the new Board rules, companies can be forced to collectively bargain with a union that doesn’t represent its own workers in certain circumstances. Healthcare providers stand to be disproportionately impacted due to the heavy use of contract workers and temp workers (especially in short-staffed times), along with outside companies like dining services.


Seniors are most at risk in this industry: Senate Republicans have expressed concern that the Final Rule will cause the most harm to senior living facilities, which frequently rely upon staffing agencies and outside specialists to offer 24/7 residential care to patients. Some facilities even operate as franchises under umbrella corporations, which could be required to bargain with a union that organizes a single location. 


What can be done to limit joint employment findings? Unfortunately, long-term care facilities might need to alter their operations and working conditions substantially. They must also carefully evaluate all existing contracts with outside services to determine potential liability. Facilities might even cut ties with outside agencies and limit services, which would lead to a decline in the overall quality of care.


An alternative strategy: Facilities might choose to cede all control and oversight over groups of workers regarding specific functions -– including hiring, firing, scheduling, payroll processing -– to an outside vendor to avoid a finding of joint liability. This isn’t ideal, yet it might prevent undue risks.

 

A complicated affair: Each employer must carefully consider their own circumstances to decide the level of risk they are comfortable with during cases of joint employment. Healthcare providers will also need to achieve a meeting of the minds of outside agencies and contractors to decrease potential liability for all parties.

 

An inevitable outcome: Sadly, this Final Rule will lead to some healthcare providers offsetting increased liability costs by cutting jobs in an already short-staffed field. It doesn’t take any imagination to realize that this could quickly impact patient and worker safety in a negative way.

 

Also, a joint employer finding adds the risk of being impacted by an outside union’s whims to strike. Here are only the latest notable healthcare walkout updates:

  • A 7-day strike began at four Los Angeles-based Prime Healthcare hospitals.

  • A 3-day strike will soon begin for nurses at Cedars-Sinai Marina del Rey Hospital.

  • A 2-day strike has been planned for nurses at Saint Louis University Hospital. 

The new reality: Risk management could soon feel like your own second language as employers size up their workplaces to tackle the latest curveball from Biden’s NLRB.

Minimum Wage Concerns In 2024: California Fast Food Workers Are Feeling The Union Burn

By Kimberly Ricci

California is poised for a dicey labor development amid already rough inflationary times. After much back and forth last year, lawmakers passed AB 1228, which will boost most fast-food to $20 per hour on April 1, 2024. The state legislature, spurred into action by unions, including the SEIU, lauded this bill as boosting wages for 500,000 workers. This legislation may instead have some unintended consequences.


As reality would have it, however, this bill will set many of these workers back financially as businesses struggle to cope with a new financial reality: higher labor costs with little recourse to make up for the added expenses. 


Make no mistake, too, the increased costs are substantial. The overall California minimum wage is currently $16 per hour, and the consequences of boosting fast-food workers up to $20 per hour are no joke. Workers are not blind to the plight suffered by their employers, either, and one social media response lamented the situation as such: “The fast food model doesn’t work if you have to charge $20 for a meal.”


Here’s how an estimated 30,000 different restaurant locations – including Chipotle, McDonalds, and Starbucks, along with Taco Bell, In-N-Out Burger, Shake Shack, and more – are buckling down ahead of April 1:


  • Pizza Hut is already laying off delivery drivers, with an estimated 1,200 expected to lose their jobs. The chain is expected to refer customers to Grubhub and Uber Eats for delivery options.

  • Jack in the Box is planning to boost menu prices by 6-8%, which won’t cover the entire bill for these raises and will undoubtedly lead to falling customer demand and eventually lost jobs.

  • Wendy’s, Del Taco, and Carl’s Jr. are leaning into automation by test-driving order kiosks, “salsa processing equipment,” and even drive-thru AI chatbots to offset increased labor costs.

 That’s only the beginning of what will add up to a cruel April Fool’s Day when this law goes into effect. Angry workers took their concerns to the California Globe while blaming lawmakers: “I want to tell them who they are hurting.” Another absolved their employer of blame: “I saw how this wasn’t, like, corporate greed or anything. They were just getting squeezed.”


As sad as this whole situation is, this would have been an arguably preventable mess if lawmakers had heeded workers who protested smaller minimum-wage boosts in other states while arguing that they would be hurt in the process. Still, dues-hungry unions persuaded California lawmakers to take this leap into the void, even as workers express fears over layoffs.


Unions will almost certainly try to spin this undesirable outcome by blaming companies for layoffs and using that as an excuse for further organizing efforts. If they are successful, any collective bargaining agreement will supersede AB 1228 and its Council recommendations.

Meanwhile, other states are watching to see if this trend spreads since what happens in California never stays in California. And once unions’ tentacles are in place, removing their influence is hard, which is an overriding reason to nip organizing activity in the bud before it takes root.

Links For This Week:


Welcome Back to the Office in 2024! Don't Forget What the NLRB Did Over the Holidays

Link


Realigning Workplace Chakras: Easing Into 2024’s Labor Challenges

Link


The Weekly Workfront: Labor Relations Whirlpool

Link


Union Logos And Political Messaging At Work: A Legal Grab Bag

Link


Ranking Member Cassidy Releases Troubling Report Detailing Weaponization of NLRB Against American Workers, Demands Accountability

Link


Ex-SpaceX workers seek to intervene in company's lawsuit against NLRB

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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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