By Trey Kovacs and F. Vincent Vernuccio
AFL-CIO President Richard Trumka once called a corporate campaign the “death of a thousand cuts.” He was referring to a type of union organizing strategy that uses an arsenal of legal, political, and public relations attacks to wear down a company’s resistance to unionization. These tactics are intended to impose financial and legal liabilities on the target company, sully its reputation with its suppliers, shareholders and customers, and hurt its standing in the community by subjecting corporate officers to personal embarrassment.
The union’s goal is counter-intuitive. In effect, it aims to organize the employer, not the employees, by exerting public pressure on the employer to become a de facto partner in forcing union representation on employees. The most ambitious corporate campaigns try to pressure multiple companies to agree to the wholesale unionization of entire industries city or statewide. By using a corporate campaign it’s easier for a union to organize all the hotels in a city, a nationwide restaurant chain, a statewide consortium of hospitals, or the janitorial staff in a city’s downtown office buildings, far easier, that is, than by going door-to-door persuading workers at individual job sites to join the union.
During a corporate campaign the union often hides its own self-interest by having churches, civic groups, celebrities and politicians frame union organizing in terms of the common good or social justice. Attracting the media’s attention to a mass demonstration or a human interest story, corporate campaign organizers tailor their message to maximize public sympathy for the union’s cause.
In Food Lion, Inc. v. United Food and Commercial Workers Union, a 1997 case, the U.S. Court of Appeals for District of Columbia Circuit defined the term “corporate campaign” this way: it “encompasses a wide and indefinite range of legal and potentially illegal tactics used by unions to exert pressure on an employer. These tactics may include, but are not limited to, litigation, political appeals, and requests that regulatory agencies investigate and pursue employer violations of state or federal law, and negative publicity campaigns aimed at reducing the employer’s goodwill with employees, investors, or the general public.”
This could mean that a union might form an alliance with environmental groups to file a complaint accusing a company of polluting the environment. It could link up with civil rights groups to condemn an employer for racial or gender discrimination and human rights abuses. It could also organize the public appearance of celebrities and religious leaders who would voice their outrage over perceived wrongs done to the company’s employees.
The union might urge elected officials to denounce a company for failing to change its employment practices and methods of operation. With help from sympathetic politicians, the union could instigate regulatory actions miring a company’s building projects or merger plans in red tape and forcing it to spend time and money defending itself.
Some union organizers would rather see a company go bankrupt than remain union-free. Writing in the Labor Research Review (#18), a publication of Cornell University’s pro-union Institute of Labor Relations, former UFCW organizer Joe Crump boasted:
“After a three-year struggle, the battle with [the grocery chain] Family Foods is over. Do we represent the employees? No. The company went out of business. The good news is that some of the stores were purchased by companies already under a Local 951 contract. A couple stores are empty, but I am sure that many of their former patrons are now shopping in unionized stores. Perhaps even more important is the message that has been sent to nonunion competitors: There is no “free lunch” in our jurisdiction.”
SEIU’s Intimidation Manual
To fully grasp the extent of a corporate campaign one need only read the “Contract Campaign Manual” published by the Service Employees International Union (SEIU). The manual was disclosed in 2011 during the discovery process when the catering company Sodexo Inc. sued SEIU for racketeering and extortion. (An account of the SEIU/ Sodexo battle appears below.)
A seventy plus page chapter “Pressuring the Employer” recommends using a corporate campaign to “damage an employer’s public image and ties with community leaders and organizations.” The campaign’s aim is to jeopardize “relationships between the employer and lenders, investors, stockholders, customers, clients, patients, tenants, politicians, or others on whom the employer depends for funds.”
The manual even advises breaking the law: “Union members sometimes must act in the tradition of Dr. Martin Luther King and Mohatma [sic] Gandhi and disobey laws which are used to enforce injustice against working people.”
The union further suggests legal and regulatory pressures to “threaten the employer with costly action by government agencies or the courts.”
Not mincing words, SEIU states, “It may be a violation of blackmail and extortion laws to threaten management officials with release of ‘dirt’ about them if they don’t settle a contract. But there is no law against union members who are angry at their employer deciding to uncover and publicize factual information about individual managers.”
The “dirt” union members can publicize includes “racism, sexism, exploitation of immigrants or proposals that would take money out of the community for the benefits of distant stockholders.” SEIU also recommends “[l]eafleting outside meetings where [targeted managers] are speaking, their homes, or events sponsored by community organizations they are tied to are some ways to make sure their friends, neighbors, and associates are aware of the controversy.”
Card Check Coercion
Rough-up a corporation so that its management goes along with the union: this is the strategy underlying a corporate campaign. The union’s goal typically is to get management to sign a so-called “neutrality agreement,” which makes union organizing easy. The agreement requires the company to say nothing against the union’s organizing campaign. But it further specifies that the company will support the union’s request to deny workers access to a secret ballot election.
Under the National Labor Relations Act (NLRA), a union can organize workers in two ways: by winning a secret ballot election or by the procedure known as “card-check.” To petition for a secret ballot election a union must turn over to the National Labor Relations Board (NLRB) cards that authorize union representation by at least 30 percent of the employees at a worksite. However, if the union collects signed cards from a majority of these employees, then the union can ask the employer to bypass the election and simply recognize it as the employees’ representative.
In other words, if 50 percent plus one of the workers sign the card, then 100 percent of the workers lose their right to a secret ballot election. Card check invariably leads to worker harassment and intimidation because union organizers pressure and even deceive workers into signing the cards. Without an election, workers are deprived of time and privacy to reflect on whether they really want to authorize union representation.
Unions want card check because they know that in most cases workers may act impulsively and quickly sign the card because everyone else is signing. Workers may be reluctant to sign but will yield under the harsh gaze and threatening voice of a union organizer. When a majority of the employees are talked into signing the cards the unions will use that fact to pressure the employer to accept unionization without asking for a secret ballot election
Under current labor law, when a union obtains signed cards from a majority of employees, the employer still gets to decide whether to recognize the union or whether to request a secret ballot election. This employer discretion is why unions want Congress to pass the Employee Free Choice Act. EFCA ends the employer’s option to demand a secret ballot election.
Unions instigate corporate campaigns to pressure employers. They do not want the employer to simply be “neutral” on the question of whether employees should sign the cards but to side with the union on the question of whether to accept employee unionization without an election.
In congressional testimony former NLRB member Charles I. Cohen, a Clinton appointee, has admitted that “neutrality/ card check agreements are almost always the product of external leverage by unions, rather than an internal groundswell from unrepresented employees.”
Mr. Bego’s Neighborhood: An SEIU Corporate Campaign Gets Personal
In 2005, SEIU Local 3 launched a union organizing campaign against a Midwest-based commercial cleaning and facility maintenance company called Executive Management Services (EMS). SEIU officials asked for a meeting with EMS president David Bego to inform him that they were going to unionize his company’s janitorial employees, and to tell him that he must sign a Neutrality Agreement pledging to say nothing to the company’s employees about whether they should sign cards or vote to join SEIU.
Bego questioned the union’s demands and motives and asked why he should sign a Neutrality Agreement. Testifying last year before a House subcommittee on his experiences, Bego described the terms of SEIU’s Neutrality Agreement:
“The company is required to
(1) produce the names of all of its employees and their contact information,
(2) agree not to say anything negative about the union or otherwise interfere with their attempts to organize the company’s employees, and
(3) agree to accept the union as the representative of the company if they produce authorization cards for more than fifty percent (50%) of the class of employees”
In his testimony, Bego explained why he refused to sign the agreement:
“In short, in my attempt to do that which was in the best interest of the employees, I simply could not see how it would be to their benefit to risk subjecting them to undue pressure, and to unilaterally sacrifice their right to vote on whether to be represented by this labor union.”
Bego recalled SEIU organizer Dennis Dingow’s blunt response to his concerns: “Mr.Bego, we enjoy conversation but embrace confrontation. If you do not execute this Neutrality Agreement, we will begin to target you, your employees and your customers.”
What followed was a costly four year-long corporate campaign against EMS. Bego said he repeatedly urged SEIU officials to petition for a union election and promised to respect the will of his employees. But SEIU was unwilling to let EMS workers vote by secret ballot on their preferences.
Instead, SEIU launched a corporate campaign against EMS. It labeled EMS as “civil rights violators” and misinformed religious leaders about the company’s business practices, prompting some to stage hunger strikes, sit-ins and rallies to support the union. It pressed local politicians to urge firms to cancel EMS cleaning contracts and hire unionized companies. It filed baseless “unfair labor practice” allegations against EMS. In 2007-2008, SEIU filed thirty-six charges against EMS with the National Labor Relations Board. Not one charge was upheld.
SEIU went so far as to allege that EMS required its employees to dispose of human body parts, a smear that damaged EMS’s public image and worried its customers.
At a public protest SEIU even offered free lemonade to passers-by if they would telephone EMS corporate clients and ask that they cease doing business with the company.
On Halloween night in 2007, SEIU shamelessly organized children to trick-or-treat in David Bego’s neighborhood. The children were instructed to hand out fliers that claimed buildings cleaned by EMS were “Houses of Horror” where workers were maltreated and exploited.
These examples exemplify the “death by a thousand cuts” strategy proposed by the AFL-CIO’s Rich Trumka. However, in this instance, the SEIU corporate campaign failed. In 2007 Bego challenged SEIU to petition the NLRB for an election asking EMS employees to vote on whether they wanted a union. He bought an advertisement in the Indianapolis Star telling SEIU: “Fish or Cut Bait.”
The UAW and Southern Auto Plants
The United Auto Workers (UAW) is a prime example of a union in freefall. Its membership has plummeted from a high of 1.5 million in 1979 to less than 377,000 in 2010. Despite many attempts, the union has failed to organize workers in foreign-owned auto plants in southern right-to-work states.
Last year UAW president Bob King said organizing Nissan, VW, Hyundai and Toyota factories was the only way his union would survive: “If we don’t organize these transnationals, I don’t think there’s a long-term future for the UAW – I really don’t.”
King knows it’s unlikely that autoworkers in Tennessee, Alabama and other states unfriendly to unions will ever vote by secret ballot to have the UAW represent them, which is why he changed the UAW’s organizing strategy. Instead of persuading workers of the benefits in voting to join the UAW, he is targeting the corporate boardrooms of their employers.
UAW-led corporate campaigns seem misconceived and ineffective. King vows to “pound Toyota” until it capitulates. “Toyota is killing American jobs,” its brochures and banners read, adding just a splash of blood-like red paint to the design. But the union later called off its protests—which reportedly cost $642,000—fearing negative public reactions and producing not a single new union member.
The UAW has also sought out nonunion allies like Jesse Jackson and his Rainbow/PUSH coalition. In 2010 the UAW and Rainbow/Push announced a “Jobs, Justice, Peace” campaign. In a Detroit kickoff event, King declared: “We’re gonna be out there in the streets demanding social and economic justice for all working families, all workers, in this country and around the world.”
The following year the UAW unveiled its “Principles for Fair Union Elections.” Ironically, one of these is the importance of taking away the secret ballot and relying instead on card-check organizing procedures. UAW threatens any company rejecting the principles with a possible global campaign branding it “a human-rights violator.” King has targeted a one company in particular: “There are some real concerns we have with human rights and civil rights with Nissan,” he has said.
This year the UAW has been picketing 75 dealerships of a non-union car company, claiming that an employee of a South Korean subcontractor to a parts supplier (a firm not directly employed by the automaker) was let go after filing a sexual harassment claim. This seems to be grasping at straws to protest the treatment of a foreign worker who didn’t even directly work for the company and who was employed half a world away.
Most recently the UAW has tried to use an Alabama anti-immigration bill (H.B. 56) to leverage union influence over foreign automakers. In the Detroit News King wrote that the UAW is “marching for justice and calling on Alabama businesses and major foreign investors — such as Daimler, Hyundai and Honda — to support repeal of H.B. 56.”
King adds, “Failure to speak out against H.B. 56 is a failure of leadership and silent endorsement of racist policies that resulted in this legislation becoming law in the first place.”
A Dirty Campaign: SEIU and Sodexo
SEIU’s 2009 “Clean Up Sodexo” campaign can justly lay claim to being the one of the dirtiest, most vicious corporate campaign in recent memory.
To secure union representation for the food service company’s 120,000 workers SEIU organizers:
* put plastic cockroaches on food at a high-profile event catered by Sodexo,
* frightened hospital patients by claiming Sodexo’s food contained mold, rat droppings, and flies,
* choreographed civil disobedience to pressure administrators at George Mason University to terminate a Sodexo food service contract. “As long as it takes, whatever it takes, we’ll be in your face!” chanted protesters led by SEIU president Andy Stern and actor Danny Glover who were arrested in a show of “solidarity.”
Sodexo responded to the incessant and abusive attacks by filing a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit in 2011. The company claimed that in its attempt to represent its employees the union used “blackmail, vandalism, trespass, harassment and lobbying law violations designed to steer business away from Sodexo USA” SEIU eventually dropped its corporate campaign, fearing litigation and, more importantly, the “discovery” process which would reveal its intimidation manual. The case was settled out of court.
UNITE-HERE: A Uniformed Campaign of Pressure
UNITE-HERE was formed in 2005 after multiple mergers that joined together unions representing textile and “needle-trades” workers (including the famous International Ladies’ Garment Workers Union, America’s largest union in the 1920s) to unions representing hotel and restaurant workers. The union has a reputation for aggressively engaging in multi-year, multi-city and industry-wide corporate campaigns to organize workers, most notably in the hotel industry.
Two UNITE HERE corporate campaigns are currently ongoing: “Uniform Justice” and “Hotel Workers Rising.” Both campaigns continue despite multiple lawsuits challenging the legality of their tactics.
“Uniform Justice.” This campaign was launched in 2003 by a coalition of UNITE-HERE, the Teamsters union, and Change to Win, a new labor federation of unions that broke with the AFL-CIO. The campaign seeks to use card-check to organize companies that sell and rent work uniforms and apparel worn by factory workers and hospital, restaurant and hotel employees. When nonunion Cintas, the nation’s largest supplier of uniforms, refused to sign a Neutrality Agreement it became the target of a corporate campaign.
* The “Uniform Justice” campaign illegally accessed Cintas employees’ personal information so that union organizers could visit workers at their homes and pressure them into joining the union.
* The campaign tried to artificially depress the price of Cintas stock by spreading misinformation about the company’s finances in print and on the internet.
* The campaign even opposed a lawsuit filed by the Kentucky Speedway against NASCAR over the allocation of its races. Reason: the chairman of Cintas is a part-owner of the Kentucky Speedway, which sponsors major NASCAR events.
* The union-led coalition created three websites vilifying Cintas: cintasexposed.org targeting customers, uniformjustice.org targeting employees, and notonmytrack.info targeting NASCAR fans. Fans are urged to sign petitions and sent text messages supporting NASCAR’s position.
“Hotel Workers Rising.” This UNITE-HERE campaign, begun in 2006, calls for a multi-city boycott of nonunion hotels in the U.S. and Canada. Individual nonunion Hilton, Sheraton and Westin hotels are targeted but Hyatt hotels are the focus of the campaign. A website hotelworkersrising.org is careful to identify unionized Hyatt hotels “with current UNITE HERE collective bargaining agreements” not subject to boycott.
To leverage the boycott the union works with sympathetic allies:
* Advocacy groups like the NAACP canceled conferences and dinners at nonunion Hyatts and moved them to unionized hotels. The NFL Players Association protested Hyatt layoffs.
* Harvard University voted not to reinvest its endowment funds in a private equity firm owning nonunion hotel properties
* In 2008 House Speaker Nancy Pelosi pledged to boycott the Fisherman’s Wharf Hyatt in San Francisco. In the years since then other Democratic Party leaders have made similar pledges
* When celebrity “Iron Chef” Masaharu Morimoto recently announced plans to refurbish one of his Los Angeles restaurants, UNITE-HERE warned that it would not look kindly on his working with Hyatt. Food lovers are encouraged to send Morimoto a message: “Please come to L.A. but don’t get in bed with Hyatt!”
Hyatt’s L.A. general manager released a statement: “Unite Here’s boycotts and protests take money from the very people union leaders say they represent, and Local 11’s new campaign targeting Chef Morimoto harms their own members who work at Andaz West Hollywood. Unite Here continues to exploit its own members in order to further its national organizing agenda in non-union hotels.”
Once Unionized, Always Unionized?
If a union muscles its way into a company against the employees’ better judgment, why can’t the employees simply get rid of it? The procedure to do this is called “decertification,” but it’s usually very difficult, if not almost impossible, for employees to perform.
Once a union is recognized as the employees’ collective bargaining agent—either by secret ballot or by card check—it has up to a year before employees can begin to initiate decertification. This is called a “certification bar.”
Delaying decertification can be further extended if an employer ratifies a union contract, which typically lasts three years.
Once a contract is about to expire employees only have a 30-day window to file a decertification petition with the NLRB. The window must occur between 60 and 105 days prior to the end of the contract. This is called a “contract bar.”
Employees can file for decertification at any time after a contract expires or is more than three years old. However, if the employer and the union enter into a successor contract the “contract bar” resumes and employees need to wait another three years.
This is called obstruction.
What Can Be Done?
In the absence of libel, slander, extortion and blackmail, even the most obnoxious corporate campaign can’t be banned without running afoul of the First Amendment. But a corporate campaign can be curtailed by taking away its primary goal, which is unionizing employees through card check.
In 2010 voters in four states—Arizona, South Carolina, South Dakota, and Utah—overwhelmingly approved ballot measures to amend their state constitutions. The amendments will protect workers’ right to secret ballot elections.
Unfortunately, the NLRB has challenged these laws claiming the federal National Labor Relations Act preempts states from taking this action. It is suing Arizona to repeal the state’s secret ballot amendment. Arizona is fighting back with help from the state’s free-market-oriented think tank, the Goldwater Institute, which is defending the amendment in federal district court. (Note: One of this study’s authors provided expert testimony for Goldwater in its defense of the secret ballot.)
Clint Bolick, Goldwater’s lead attorney, sees weaknesses in the NLRB case. He predicts Arizona will win because, “First, states are free to give greater protection to individual rights than federal law. Second, the decision whether to join a particular group is protected by the freedom of association guaranteed by the First Amendment. Finally, courts will try their best not to find a conflict with federal law.”
On the federal level, members of Congress have introduced bills to ensure the secret ballot for workers throughout the country. In the 112th Congress Rep. David Roe [R-TX] and 65 cosponsors introduced H.R. 972 the Secret Ballot Protection Act. However perhaps a better option to protecting workers’ rights, combating corporate campaigns, and ending the NLRB’s overreach is H.R. 2810 , the Employee Rights Act (ERA), which was introduced by Rep. Tim Scott (R-SC) in the House. A companion Senate measure, S. 1507, was introduced by Sen. Orrin Hatch (R-Utah).
The ERA would allow workers to “re-elect” their union every three years, bypassing the difficulties of the decertification process. It also ensures that all workers have the right to a secret ballot in unionization elections. The re-election provision restores the secret ballot to workers who might have signed on to card check because a corporate campaign forced their employers to adopt a neutrality agreement.
A state or federal secret ballot protection act and the federal ERA are positive legislative fixes. But enacting them won’t be easy. In the meantime businesses must remain vigilant. They should resist corporate campaigns by filing RICO and extortion lawsuits against unions that try to strong-arm them.
The public also has a role to play. It must look more skeptically at allegations and negative publicity directed against companies. And it should check to see whether the groups making claims against a corporation have political or financial interests in destroying that corporation’s reputation.
Trey Kovacs is a Policy Analyst at the Competitive Enterprise Institute (CEI); Vincent Vernuccio is Labor Policy Counsel at CEI and provided expert testimony on behalf of the Goldwater Institute in their defense of Arizona’s Secret Ballot Protection Law, currently before a federal district court in Arizona