Labor Relations

Many expected news about EFCA coming out of the AFL-CIO’s national convention in Pittsburgh and they were not disappointed.  In an interview with the Washington Post yesterday, Arlin Specter outlined many of the key components of his revisions to EFCA, which he expects will pass before year’s end. Key parts of Specter’s revisions include:

• Keeping the secret ballot so employees will be able to vote privately
• Sharply reducing the time between petitioning for election and the vote
• Guaranteeing union access to employees, on company time & company property,  if they are required to attend anti-union meetings
• Tripling employer fines for unfair labor practices
• Baseball arbitration after an undefined period of contract negotiations

There are still a number of questions left unanswered.  How long will a company have to run an election?  What will trigger arbitration?  Will organizers be allowed to visit employees homes?  Will triple penalties apply to employers only or will unions come under the same penalties?

At this point, smart employers will focus on training their management team to avoid unfair labor practices and teach them how to talk with employees about unions.  Employers should also survey their employees and conduct threat assessments to identify issues and address them before an organizer attacks on those vulnerable areas.    Finally, employers should work with their leadership team on exercising best practices when dealing with their workforce.

Remember, in the vast majority of union elections, employees do not vote for unions, they vote against management.

The Teamsters, right now, are descending on Washington DC and pushing every Senator to support the Employee Free Choice Act.  An email went out this morning from the Teamsters.  In part it said:

“Our Day of Action JUST started – we need your help!

Do your part to fight greedy CEO’s and corporate lobbyists who are trying to kill the Employee Free Choice Act.

DIAL 1-888-650-9715 and tell your Senators to support the Employee Free Choice Act!

A year after Lehman Brothers, AIG, and the rest of the finance industry nearly brought the U.S. economy to its knees, CEO’s are back at it, lining their pockets and hurting the American worker.

That’s why we need the Employee Free Choice Act – a bill in Congress that would help more people negotiate for better wages, health care, and working conditions by forming a union.

As you read this, over 300 state leaders from around the country, including Teamster volunteers, are descending on Capitol Hill for a massive Day of Action to meet with Senators and urge them to support this important bill………..”

The real fight over EFCA has now started.

If you were a union organizer how would you pick your next target?  I would look at the stats below and figure it out from there.  As you will see, manufacturers with less than 50 employees have the highest union win rate and currently have the most union activity.

Many times, small business owners think they do not have to worry about union organizers.  The numbers below seem to indicate that isn’t the case. Recently, a group specializing in training union organizers published a study to help future organizers pick their targets.  Use these to help determine your risk of your business becoming a prime target for a union organizer:

Number Employees               <50             50 -99           100-199           200-500          >500

% Union Elections                 65%             16%                 10%                     6%              2%

% Union Wins                        58%             47%                40%                   38%            38%

What industries are unions targeting?  The same union organizer trainers also published this:

Industry     % Union Elections    % Union Wins

Business Svcs            6%                          65%

Health Care               16%                         63%

Entertainment          2%                           62%

Other Svcs                 8%                          61%

Construction             10%                         54%

Transportation          13%                          53%

Hotels                         2%                          51%

Trade                        12%                           50%

Telecom/Utils            6%                           49%

Manufacturing          25%                        41%

Like the old saying goes, the numbers don’t lie.  Where does your organization fall in the two sets of numbers above.  Are you prepared?  Are your leaders trained?  Have you told your employees what your stance on unions is?  Remember the Boy Scout Motto – Be Prepared.

Recently, a nationally known pro-union web site, Strategic Organizing, attacked Metreks as a “union buster who’s first tactic is to drive a wedge between supervisors and employee.” I laughed out loud when I read it. They were responding to my recent post on “How To Win A 5 Day Union Campaign.”

The post discusses how companies CAN stay union free even if EFCA passes in the next few weeks. The part the union felt was “driving a wedge between supervisors and employees,” was where I said that the first thing a company should do is to educate their management team on how to improve labor relations and union avoidance basics.  The point of Metreks’ training is to cover topics every supervisor should know such as:

• Tell employees to get “union promises” in writing
• Remind employees of their rights to privacy even when unions ask for personal information or tries to visit them at home
• Explain that a union card is a contract between the union and the employee and when signed, gives that union power of attorney to represent that employee in future bargaining actions
• Talk about how Unions are in business to make money and they make money by collecting dues, fines, and assessments from union members

What part of this is “driving a wedge between supervisors and employees.”  Teaching the truth and instructing supervisors how to legally conduct themselves in an organizing effort is not driving a wedge but spreading the truth and helping to stop needless legal actions that costs companies millions every year.

If this is what unions call “Union Busting”, then I’m guilty.  Then again, can anyone think of one instance where a union did anything other than harm companies they organize?  What if we called unions “Company Killers.”  How does that help employees?  Think I’m wrong?  Look at the record.  Ask anybody who use to be a member of a union if they would rather work for a company that is unionized or union free and see what they say.

One final point.  When you are in the business of helping companies stay union free, and you get attacked by a union, you must be doing a good job.  Thanks for the endorsement!

President Obama will be speaking in Pittsburgh twice in the upcoming weeks. As you would expect, he is speaking at the upcoming G20 meeting.

Probably as noteworthy, but somewhat under the radar, is his planned speech to the AFL-CIO Convention. He will be pushing health care reform as well as other pro-labor agenda items.

I’m sure he will touch on EFCA but I bet he won’t mention the $10 Billion that unions would receive under the current health care reform to bail out many of their pension funds that are under water.

It is amazing how nobody is talking about the possibility of giving big labor $10 billion buried in the proposed health care reform legislation. Of course, giving unions a $10 billion carrot is one way to get them mobilized and behind a bill. We’ll see if it turns out like the President and Big Labor hopes.

Over the recent weeks, as the debate over health care has raged on, you may have noticed that big labor has come out strongly supporting the new health care legislation. The question is why.

Why is are the country’s biggest unions coming out so strongly for health care reform? If you’ve ever dealt with a union you know that health benefits are a big part of what they go after and they are pretty successful at getting it in the labor agreements. Many trade unions have very good benefits.

So if unions have such good benefits, why are they supporting health care reform? For the good of the common man? To punish the greedy insurance industry? To support the Democratic agenda?

No, that isn’t why.  Big unions are supporting health care reform because buried deep within the 1,000+ page health care bill is a provision giving retirement health funds, many of which are union-run, $10 billion to bailout their ailing funds.

The Detroit News reports:

They’re both talking about a $10-billion provision tucked deep inside thousands of pages of health care overhaul bills that could help the UAW’s retiree health-care plan and other union-backed plans.

It would see the government — at least temporarily — pay 80 cents on the dollar to corporate and union insurance plans for claims between $15,000 and $90,000 for retirees age 55 to 64. Big businesses with union workers are twice as likely to offer retiree benefits as nonunion ones.

According to the News, the UAW’s pension fund has only 30% of the funds necessary to pay the 850,000 members. Unions are working hard to pass health care reform so they can get bailed out, just like many banks and car companies have.

As Paul Harvey use to say “Now you know the rest of the story. Good day!”

Human Resources is one of the most important departments within any organization. HR responsibilities can range from policy administration, to hiring, to labor relations, benefits, and beyond. HR departments are like….. uh… noses.  Everyone has one but they can vary greatly.

My experience has been that there are three kinds of Human Resource Departments:

1. Bureaucratic – They are more interested in filling out the right form than they are helping people
2. Road Block – Their job is to stop management until they ask nicely and always remind everyone of the risk of a legal suit that the company will lose, through no fault of theirs.
3. Advocate – These HR professionals recognize that their job is to champion the cause of their employees and help management apply policies in a fair, firm, and consistent manner.

You often hear about the “culture” in a company.  The HR department has more to do with defining that culture than most think.  If they work WITH management to help them achieve their tactical and strategic goals, while filling their role as employee advocate, the culture will be norished and will thrive.

If Human Resources is contantly at odds with Operations or serves employees only by filing forms and effectively shutting the “open door”, the culture is undermined both in the board room and on the shop floor.

HR impacts every part of every organization.  If you have a “culture” issue in your company, look first at how the Human Resource Department interacts with the rest of the organization.  If there is no upward communications from the shop floor, or rampant law suits, or union organizing efforts going on, don’t ignore HR’s role in helping create the situation while on your way to fire the VP of Operations.

Human Resources must be your finger on the pulse of your people.  They have to maintain a balance between supporting management and “protecting” your employees from unfair decisions or work place abuse.  HR can be a company’s greatest tool or it’s weakest link.  Like everything else, it comes down to leadership.  If Human Resources is not walking the talk, you must take action or a ripple could turn into a tsunami.

According to the recent McKensey Quarterly, India leads the world in providing offshore services in business and technology, with revenues of $58 billion in 2008, out of a global total of $80 billion. McKinsey estimates this is just the beginning: the global market for offshore business and technology services could grow to about $500 billion by 2020. Yet even with this growth, the industry will still serve less than 1/3 of the potential market for these services, which McKinsey estimates at $1.65 trillion to $1.80 trillion in 2020.

Source: Strengthening India’s Offshore Industry

Growth of domestic outsourcing continues to outpace GDP growth also. Why?

The answer is simple. Outsourcing non-core competencies cost less than developing and/or supporting inefficient, poorly run in-house functions.

The perception of many is that outsourcing costs more but that is usually because they don’t count all the internal costs of sub-par production, and often over look costs of supporting a poor in-house model.

If you do not have thought leading executives with core competencies in support functions such as systems, supply chain management, or call center operations. You should seriously look at outsourcing.

If you don’t have the critical mass for these functions, outsourcing could leverage an expert provider’s base, resulting in significant cost reduction.

If flexibility, dynamic growth, or restricted capital are realities you face, often times, outsourcing is a great strategy that will result in dramatic bottom line improvement.

Because of these and many other reasons, most of the Fortune 1,000 companies outsource / off shore significant pieces of their core functions.

According to a new Proofpoint study of 220 leaders at American companies with over 1,000 employees, 38% employ staff to read or otherwise analyze the content of outgoing email, compared to 29% last year. Why the big increase in surveillance? 34% said their businesses had been affected by the exposure of sensitive or embarrassing information, up from 23% in 2008.

ON a related note, the NLRB reversed a ruling that said employers could consider internal emails encouraging unionism as an abuse of the company property. With this reversal, employees are now protected if they use company email to encourage unionism. The message is that we all should be careful what is put in emails and we should not spy on employees to see if they are promoting a union by reading their emails.

Treat your team with respect and treat them like you would like to be treated. Do you let them read your emails? Then don’t read theirs. If you do that and you have a positive uplifting culture, you won’t have to worry about what your people are saying about you, NLRB violations, or union organizers.

SEIU sent out emails today urging all members to sign up for mobile alerts so the SEIU can immediately rally their members “When your Senator or Congressman needs to hear our voices on the health insurance reform, Employee Free Choice, or immigration debates.

When our members — your brothers and sisters — require support at the workplace, the state capitol, or in the streets.”

This is more evidence of big labor investing and building infrastructure to sway political opinions and organize non-union businesses. Like the old song says, “these times, they are a chang’n”. Is your business keeping up? Do you have a Strategic Labor Relations plan to deal with all the legal changes, threats, and union tactics? If not, you need to take action now. The times may be changing, but time stands still for no man.