Stephen, J. Cabot blog

While the telecommunications industry has not been plagued by union organizing efforts, a disquieting trend seems to be afoot. Since July 2005, the Communications Workers of America has been able to convert 16,500 former AT&T Wireless workers into union members at Cingular Wireless retail stores and call centers. The fact that many Cingular stores are in the South, where organizing efforts have historically met with resistance, is even more disquieting.

While Cingular has an almost completely unionized workforce, the percentage of unionized workers at utility companies has dropped to 21% from 42 % over the last twenty years. The wireless industry has about 225,000 workers, including managers, and approximately 39,000 of them belong to a union. Just about all of those unionized workers are at Cingular.

All of Cingular’s wireless competitors have successfully avoided the threat of unionization. Unions, utility companies, and Wall Street are examining the situation at Cingular.

The attitude of unions is that success at Cingular means they can succeed in organizing other telecom companies.

Other utility companies are keeping a watchful eye on the unions, wondering when and if they will be targets for unionization. They should have action plans in place for dealing with such threats.

On Wall Street, telecom analysts have taken a “wait-and-see” position. So far, there has not been a negative effect on earnings at Cingular, but a unionized workforce is a more expensive one than a non-union workforce, and labor costs eat into a company’s profitability.

The telecom industry is one that all labor relations professionals should be watching carefully, for organizing efforts at targeted companies may very well portend a future of numerous such efforts, especially from the unions that broke away from the AFL-CIO
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The National Labor Relations Board (NLRB) has decided that once workers vote for a union, they and their employers must abide by their contract, even if the workers have changed their minds.

The YWCA in Springfield, Massachusetts was told by the NLRB that it had to honor a labor contract that was ratified nearly a year ago, pay back dues to all workers, and honor negotiated settlements. The NLRB’s 29-page decision rejected the non-profit agency’s contention that the workers had changed their minds about the union after it was certified.

David Goldman, of the NLRB, wrote that “an employer may not rely on a union’s subsequent loss of support to justify withdrawal of recognition….”

This is an example of why it is essential for management to have a winning strategy for dealing with union organizing efforts. And with the advent of new militant unions that have broken away from the AFL-CIO, it is now more important than ever for Corporate America to have effective strategies in place and not wait to appeal to the NLRB.

On Monday, a large number of union critics, along with a 15-foot inflatable dinosaur, picketed the headquarters of the AFL-CIO in Washington, DC. They were protesting the “criminal practices of the labor movement.”

The protestors were from a newly formed group known as the Center for Union Facts (CUF), and it is using the dinosaur to make the point that unions are pre-historic and should be extinct. The dinosaur’s use was inspired by the large inflatable rats that unions use to embarrass companies that will not meet their demands.

The CUF announced that it has launched a multimillion dollar “educational campaign,” that includes a website that lists the salaries of union heads as well as the amount of money that unions donate to political action committees.

The website, www.unionfacts.com lists information about more than 100 labor organizations, and it enumerates unions’ unfair labor practices reported to the NLRB.

The creation of CUF is a direct response to the growing militancy not only of the AFL-CIO, but also a response to the unions that have broken away from the AFL-CIO. It is apparent that the heyday of unions is over; they have played an instrumental role in the decline of important industries. Dinosaurs indeed!

In Seattle, Washington, state workers have lost their jobs because they refused to pay union dues. According to a labor agreement between Washington state and the Washington Federation of State Employees, the union can collect dues from employees who are not only members, but also from those who choose not to join the union.

The WFSE compiled a list of nearly 800 state employees and sent their names to the state Labor Relations Office. The office, in turn, told agency employees that they would be fired sometime after Christmas if they didn’t pay their dues.

The effort to enforce the union security clause began in November, when the WFSE sent the names of 799 non-compliant employees to the state Labor Relations Office. The office advised the agencies employing those workers to tell them they would be fired after Christmas if they didn’t pay their dues or fees.

While most of those employees grudgingly paid the dues and are appealing the decision, nearly 300 have simply refused to pay the dues.

This is another example of unions making sweetheart deals that give them the kinds of power that workers are loath to accept. If unions are given a free hand to do what they want, they will exercise their power very much as autocrats.

According to a ruling by the National Labor Relations Board, drivers for FedEx in Worcester, Massachusetts cannot be classified as independent contractors, instead they are employees. As such, they have the right to vote for union representation in a secret ballot. This is a victory for The Teamsters Union which has been trying to organize FedEx truck drivers.

While the drivers had originally signed agreements with FedEx that they would operate as independent contractors, they are now re-classified as employees because they cannot choose their delivery routes, cannot negotiate compensation, and must abide by company rules and regulations.

FedEx has achieved success because it has operated at an extremely high level of efficiency and offered attractively competitive prices to consumers. One only need look at the inefficiencies of the US Postal service and compare its operation to the streamlined operation of FedEx. If unionization occurs at FedEx, prices will rise along with inefficiencies that are frequently caused by a multiplicity of burdensome workplace rules imposed by a union.

One of the major problems faced by the US auto industry (and virtually every sane person agrees) is that its decades of acquiescence to the United Auto Workers has resulted in pension and health care benefit costs that are unsustainable. For each car that GM manufactures, it must spend $1,500 for employee health care costs! Regardless of what one may think about the competitive value of GM cars compared to Honda and Toyota, GM cannot afford to compete with Japanese auto makers as long as its labor costs stretch into the stratosphere.

It’s no wonder that GM and Ford are laying off approximately 60,000 workers and closing one manufacturing facility after another.

Yet, at the same time, Japanese and Korean auto companies are building new plants in right-to-work states and are hiring as many employees as GM and Ford are terminating.

Without the burdens imposed by the unions, the Japanese and Korean companies will produce the finest quality cars at a cost significantly lower than costs in Detroit. And the situation will become even more dire for Detroit when China introduces a $10,000 car into the US market next year.

If an example of the negative effects of run-away unionization were ever needed, the Detroit auto industry has presented such an example in spades!